THE ROLE OF FINANCIAL INSTITUTION IN A DEVELOPMENT ECONOMY

CHPATER ONE

1.1            INTRODUCTION

The idea of establishing indigenous development financial institutions was mooted after the establishment of the Central Bank of Nigeria (C.B.N) on first July, 1959 after the bank failure of the early 1950’s.

During this time, it became obvious that there was an urgent need for financial institution capable of providing medium and long term capital to full up serious gaps in the financial system/ struction of the economy.

As a result of this need arose to create special institutions for special purpose, the special purpose being development in the widest sense of the term. There was a need to create institution that could undertaken investment where the private investor might for the times being so reluctment to go and create atmosphere in a private investor where they will find the risk of investment considerably reduce if not wiped out entirely. The need is to stimulate the private sector of the economy and also with the promotion and finance of an enterprises by the provision of long term and medium term fiancé was accepted.

1.2     THE PURPOSE OF THE STUDY

          The idea of establishing indigenous financial institution was mooted soon after the establishment of the Central Bank of Nigeria on First July, 1959 after the Bank failures of the early 1950’s.

          This study tried to ascertain how much of the above listed objectives to the financial institutions have been able to achieve their standing relationship with the industry and commerce which they are meant to fund their standing relationship with the Nigerian public and the Central Bank of Nigeria  (C.B.N) which is their main source of funds.

1.3     SIGNIFIANCE OF THE STUDY

          The idea of establishing indigenous financial institution saddled with the responsibilities of financing, funding industrialists and other commercial enterprises for the economic emancipation of the country is unique in such a way that it tired to x-ray the role of financial institution where functions are to help in the bid to launch Nigeria into economic freedom and to enable her compete favourably with the international economy.

          This study reviewed the primary role of these institution which reviewed included among other numerous function ‘Providing equity capital and funds by way of loans to indigenous person. This study is equally significant  in that it has reviewed the activities of the Nigerian financial institutions in trying to close those gaps created by the operation of the earlier existing non-development financial institution and speed up economic development of Nigeria.

1.4     SCOPE AND DELIMITATION

          This research entitled ‘The role of financial institution in a developing economy” is  very verse but for the purpose of financial constraints. It has therefore, restricted or limited itself to some specific  development financial institution in Owerri Municipal. Some of these choosen indigenous financial institution  include Nigeria Bank for commerce and industry. Nigeria