7 research outputs found
Assessment of Microfinance Institutions as Poverty Reduction Mechanism in Nigeria
Microfinance Institutions are intended to bridge the financial gap usually created by the dearth of capital created by the inability of the conventional banks to support the Small and Medium Scale Enterprises in the country. This has however provided the compelling reasons why issues relating to Microfinance Institutions have to be taken more seriously in Nigeria than ever before.This paper therefore focused on the identification of the causes of poverty in Nigeria and the extent to which microfinance institutions have helped in reducing poverty in the Nigerian economic development.. The researcher used Chi- square, Analysis of Variance (ANOVA) and the method of regression analysis for investigating the contribution made by the microfinance institutions to poverty reduction in the Nigerian context. The study revealed that exclusion of the poor from the financial system seriously contributed to their inability to participate in the development process. Equally with no access to funding therefore, the household finds in extremely difficult to take advantage of economic opportunities to improve their lots and their children and protect them against financial imbalances, thereby making them to be permanently within the vicious circle of poverty. The analysis revealed that increase microcredit finances drastically reduced poverty level in Nigeria and also the poverty index. The study also revealed that microfinance institutions contributes most considerably to the empowerment of the masses, majority of whom were women, rural dwellers and this has translated in business and financial development in Nigeria. Keywords: Microfinance, Financial empowerment, Entrepreneurial functions, Development Finance Institutions(DFIs), Poverty
Effects of Public Debt on Economic Growth in Nigeria (1970-2011)
This study attempted in examine the effect of public debt on economic growth in Nigeria between 1970 and 2011. Nigeria had her external demand to the major creditors amounted to 36.2 billion US dollars in the year 2011 at the exchange rate N135 to a US dollar and the total domestic was estimated as 23.9billion US dollars in 2011. The effect of this on the economy called for investigation. Time series data were sought on CBN Statistical Bulletin, 2011 Edition, and World Development Indicators (WDI). The statistical properties of the time series data were properly investigated using appropriate econometric techniques. The results of the cointegration analysis from both Eagle-Granger and Johansen methods of cointegration test, reveal that there exist no long-run relationship between public debt and economic growth in Nigeria. The results from disaggregated public debt showed that there exist a positive but non-significant relationship between per capital domestic public debt and economic growth ((=0.414001; P<0.05) while a negative and not significant relationship was found to exist between per capita external public debt and economic growth (((=0.57431; P<0.050. Also the overall public debt-growth model was not significant ((F=0.182265; P<0.05). The result of the aggregated public debt showed that, there exist a negative and non-significant relationship between per capital debt and economic growth (=0.048849; P<0.05). Also the overall public debt growth model was not significant (F=0.002386; P<0.05). The study further employs the ECM to find out if there is evidence of any dynamic relationship between public debt and economic growth during the period under investigation, the result of the ECM estimated provides no evidence in support of the existence of dynamic relationship between public debt (aggregated and disaggregated) and economic growth. Also, from the disaggregated approach, only 11.1 percent of the variation in economic growth is explained by the model while the percentage of the variation in economic growth explained by the new model increases to 44.4 percent when aggregated approach was used. This results show that debt finance is not employed as a feasible fiscal option to foster economic growth in Nigeria during the period under investigation. It is apparent with this result that debt finance does not produce the desired growth-effect in Nigeria. Government needs to be more transparent and committed to the course of the masses by putting borrowed money into highly productive sectors that will improve the productive capacity of the economy
External Debt, Debt Servicing and Poverty Reduction in Nigeria: An Empirical Analysis
This study utilizes co integration and regression analysis to investigate into the impact of external debt and debt servicing on poverty reduction in Nigeria using data for the period 1980 to 2010. Specifically, three analysis were undertaken, first, the time series properties of the concerned variables were ascertained with the help of the Augmented Dickey-Fuller (ADF) unit root procedures. Second, the long-run relationship among poverty reduction, debt –Income ratio, debt-service degree of openness, growth of agricultural value added, per capital income, inflation rate and investment-income ratio was examined in the context of the Johansen and Juselius (1990) framework. Thirdly, a multiple regression analysis was employed to examine the impact of external debt and debt servicing on poverty reduction. The overall results indicate that both the external debt and debt servicing cause poverty in Nigeria. This finding suggests that government needs to mobilize domestic saving to replace external debt. Key words: External Debt, Debt Servicing , Poverty Reduction
Effect of Macroeconomic Variables on the Financial Performance of Deposit Money Banks in Nigeria
The study investigated the effect of macro-economic variables on the financial performance of Deposit Money Banks (DMBs) in Nigeria. The specific objectives of the study are; to examine the effects of interest rate on the financial performance of deposit money banks, to evaluate the effects of inflation on the financial performance of deposit money banks and to ascertain the effects of exchange rate on the financial performance of deposit money banks. The study utilised ex-post facto research design in its time series using multiple linear regression analysis. The data sources for the study were from the annual financial reports of the selected banks in Nigeria, international monetary fund and World Bank from 2005 to 2019. The major findings of the study showed that exchange rate and interest rate were statistically significant to financial performance of deposit money banks, while inflation rate is statistically insignificant to the financial performance of deposit money banks. The study adopted Return on Equity (ROE) as proxy for financial performance while exchange rate, inflation rate and interest rate were macro-economic indicators for financial performance of deposit money banks. The study concluded that a significant relationship exists between macro-economic variables and banks’ financial performance. The study therefore recommended that, banks should always take cognizance of macro-economic factor fluctuations; as its instability has the tendency to affect the financial performance of banks which consequently affects Return on Equity (ROE)
Effect of Macroeconomic Variables on the Financial Performance of Deposit Money Banks in Nigeria
The study investigated the effect of macro-economic variables on the financial performance of Deposit Money Banks (DMBs) in Nigeria. The specific objectives of the study are; to examine the effects of interest rate on the financial performance of deposit money banks, to evaluate the effects of inflation on the financial performance of deposit money banks and to ascertain the effects of exchange rate on the financial performance of deposit money banks. The study utilised ex-post facto research design in its time series using multiple linear regression analysis. The data sources for the study were from the annual financial reports of the selected banks in Nigeria, international monetary fund and World Bank from 2005 to 2019. The major findings of the study showed that exchange rate and interest rate were statistically significant to financial performance of deposit money banks, while inflation rate is statistically insignificant to the financial performance of deposit money banks. The study adopted Return on Equity (ROE) as proxy for financial performance while exchange rate, inflation rate and interest rate were macro-economic indicators for financial performance of deposit money banks. The study concluded that a significant relationship exists between macro-economic variables and banks’ financial performance. The study therefore recommended that, banks should always take cognizance of macro-economic factor fluctuations; as its instability has the tendency to affect the financial performance of banks which consequently affects Return on Equity (ROE)
Liquidity Management and the Performance of Commercial Banks in Nigeria
The study focused on liquidity management and its effect on the performance of commercial banks in Nigeria. The study adopted correlational research design. The scope of the study was between 2008 to 2018, a period of 10 years. The study data were collected from the annual report of CBN and NDIC. The data were analysed with the aid of OLS. The study used Non-performing loan ratio, cash reserve requirement, Loan to deposit ratio and liquidity ratio as the components of liquidity management while financial performance was measured as return on equity of Nigerian commercial banks. The study revealed that cash reserve requirement, loan to deposit ratio and liquidity positively and significantly impact the financial performance in Nigerian commercial banks while non-performing loan ratio exhibits a negative but significant relationship with the performance of strategies to reduce non-performing loans. In addition, the managers should revise the loan approval process of their banks so as to reduce the level of nonperforming loans in their banks. Also, that Central Bank of Nigeria which is the nation’s apex bank should supervise and formulate policies that will encourage banks to improve on their international functions
Liquidity Management and the Performance of Commercial Banks in Nigeria
The study focused on liquidity management and its effect on the performance of commercial banks in Nigeria. The study adopted correlational research design. The scope of the study was between 2008 to 2018, a period of 10 years. The study data were collected from the annual report of CBN and NDIC. The data were analysed with the aid of OLS. The study used Non-performing loan ratio, cash reserve requirement, Loan to deposit ratio and liquidity ratio as the components of liquidity management while financial performance was measured as return on equity of Nigerian commercial banks. The study revealed that cash reserve requirement, loan to deposit ratio and liquidity positively and significantly impact the financial performance in Nigerian commercial banks while non-performing loan ratio exhibits a negative but significant relationship with the performance of strategies to reduce non-performing loans. In addition, the managers should revise the loan approval process of their banks so as to reduce the level of nonperforming loans in their banks. Also, that Central Bank of Nigeria which is the nation’s apex bank should supervise and formulate policies that will encourage banks to improve on their international functions