THE IMPACT OF CAPITALIZATION ON THE BANKING INDUSTRY AND THE NIGERIAN ECONOMY (AN EVALUATION)

ABSTRACT
The CBN in its search for a more robust, stronger and stable banking system, reeled out a 13 point reform agenda in July 6, 2004 direct among other things, that operators in the banking sub-sector should raise their capital base to N25 billion with full compliance by December 31, 2005. Although the minimum capitalization segment of the bank consolidation exercise has since been achieved, In the light of the above, the study aimed at evaluating the impact of capitalization on the banking industry and the Nigeria economy. However, the objective of the study include: Examining the extent to which Banking industry capitalization has boosted the Nigerian economy, whether the capitalization of banking industry sector enhanced the banks lending ability, How the capitalization had contributed towards the growth and development of the Nigerian economy and to proffer recommendations, to ascertain this, banking industry capitalization was used to correlate with industrial sector Gross domestic product (GDP). The study covered a period of Eight years. Being an Expo Factor research design, Regression Analysis was used to test the hypotheses using the following variables: Banks lending rates; Banking industry capitalization, manufacturing sector utilization rates, industrial sector Gross (GDP) of the economy. The study found that, the capitalization of banking industry had no significant positive impact on the growth and development in the Nigeria economy as in a bid to survive in the highly competitive banking industry. On the other hand, it was found out that, the capitalization enhanced banks lending ability within the period. However, this was as a result from the test model, although, the capitalization of banking industry cannot enhanced banks lending, if capitalization of Banking industry had no significant positive impact on the growth and development in Nigerian economy.
TABLE OF CONTENTS
pages
Title page i
Certification ii
Dedication iii
Acknowledgements iv
Abstract v
Table of contents vi
List of Tables xi
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of Problem 4
1.3 Objectives of the Study 5
1.4 Research Questions 5
1.5 Research Hypotheses 6
1.6 The Significance of the Study 6
1.7 The Scope of the Study 8
1.8 Operational Definition of Terms 8
References
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Origin of Banking (An Overview) 10
2.2 Banking in Nigeria (A Historical perspective) 11
2.2.1 Origin 11
2.2.2 Other Developments 13
2.3 Bank capital (conceptual issues) 15
2.3.1 The Functions of bank capital 16
2.2.3 Development of indigenous banks 18
2.2.4 The ordinance of 1952 and its effect 20
2.4 The Origin of bank capital legislation in Nigeria 22
2.5 Bank Distress/failure in Nigeria 29
2.5 Banking Regulation in Nigeria 30
2.5.1 The Need for Regulation 30
2.5.2 The Effects of banking regulation in Nigeria 32
2.6 The Issues in Bank Recapitalization in Nigeria 35
2.6.1 Reasons for Consolidation 36
2.7 Bank consolidation: The Nigeria experience 37
2.7.2 Effects of Consolidation 39
References
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Research Design 44
3.2 Nature and Sources of Data 44
3.3 Population of the Study/size of sample 45
3.4 Model for Analysis 46
3.5 Method of Data Analysis 46
3.6 Limitations of the Study 47
References
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Data Presentation 50
4.2 Test of Hypotheses 66
4.3 Implications of results 70
CHAPTER FIVE: SUMMARY OF FINDINGS,
RECOMMENDATION AND CONCLUSION
5.1 Summary of Findings 72
5.2 Recommendations 73
5.3 Conclusion 74
References
Bibliography