A CRITICAL EXAMINATION OP MEDIUM AND LONG TERM INDUSTRIAL FINANCING BY SOME SELECTED MERCHANT BANKS
A CRITICAL EXAMINATION OP MEDIUM AND LONG TERM INDUSTRIAL FINANCING BY SOME SELECTED MERCHANT BANKS
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Date
1987-09
Authors
LAWAN, BAKURA MOHAMMED
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Abstract
The changing s t r u c t u r e of the Nigerian economy towards
increased i n d u s t r i a l i z a t i o n r e q u i r e s the s e r v i c e s of merchant
banks, e s p e c i a l l y in the area of p r o v i s i o n of medium and long
term loans. The Federal Government through t h e Central Bank
of Nigeria, issues a y e a r l y c r e d i t and p o l i c y g u i d e l i n e s to
th«se merchant banks - specifying the s e c t o r a l a l l o c a t i o n of
t h e i r loans and advances and a l s o the percentages of t h e ir
loans and advances which should be of medium and long term
n a t u r e . Unfortunately, these banks never meet the requirements
of the g u i d e l i n e s e s p e c i a l l y with regards to the p r e f e r r ed
s e c t o r , whose loan needs are mostly of medium and long term
nature. This study found out the reasons for not meeting the
r e t i r e m e n t s of the g u i d e l i n e s and offered recommendation on
how to meet the guidelines and thereby a i d the Federal
government's e f f o r t s in the i n d u s t r i a l i z a t i o n of the country.
Furthermore, the need f o r merchant banks to i n c r e a se
t h e i r r o l e in the s p e c i a l i s e d a c t i v i t i e s such as equipment
l e a s i n g and corporate finance was h i g h l i g h t e d so as t o , not
only earn a s u b s t a n t i a l amount of t h e i r income from such a r e a s,
but a l s o to be seen as engaging in t h e i r proper merchant
banking r o l e s , as p r a c t i c e d by t h e i r c o u n t e r p a r t s in the
developed countries.
Chapter one, s t a r t e d with the i n t r o d u c t i o n b r i e f l y s t a t i ng
the growth of merchant "bank in Nigeria. The methodology and
objectives of the study were also stated and key terms.
were defined.
In chapter two, the evolution and growth of merchant
banking in Nigeria was dwelled on. Services provided by
merchant banks were also extensively stated.
Chapter three, dwelled on data analysis and findings were
made. The findings includes-
1) Short term nature of deposit l i a b i l i t i es
2) Poor incentives to keep equipment on lease
3) Dependence on i n t e r e s t income
4) Poor marketing of services
Chapter four, was on procedure for analysing Business
loan application.
Chapter five, was on loan syndication. This is not only
one of the specialized a c t i v i t i e s of merchant banks, but also
due to the fact that i t s importance has grown in recent times
especially with regards to arranging jumbo loans which are
mostly of medium and long term nature to industries in
Nigeria.
Lastly, chapter six concluded the whole exercise and
recommended solutions.
Description
Being a Project Submitted To The Post-Graduate School
Of The Ahmadu Bello University, Zaria, in Partial
Fulfilment Of The retirements For The Award Of The
Degree Of Master in Business Administration (M#B.A).
Department Of Business Administration
Ahmadu Bello University
Zaria
I SEPTEMBER, 1987
Keywords
CRITICAL,, EXAMINATION,, MEDIUM,, INDUSTRIAL,, FINANCING,, SELECTED MERCHANT BANKS