DISTRESS IN THE NIGERIAN FINANCIAL SECTOR: A CASE STUDY OF HAPPY HOME SAVINGS & LOANS LTD.
DISTRESS IN THE NIGERIAN FINANCIAL SECTOR: A CASE STUDY OF HAPPY HOME SAVINGS & LOANS LTD.
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Date
2002-01
Authors
ABUBAKAR, USMAN
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Abstract
The financial sector is one of the most dominant sector in the economic growth and
development of any nation. The history of the financial sector in Nigeria dates
back to 1892 with the advent of commercial banking business during the colonial
period. It was not until the 1930s however, that indigenous involvement in banking
business started and that period witnessed the first incidence of financial distress in
Nigeria.
Distress in the financial sector in recent times, remain one of the greatest
challenges facing the industry particularly since 1990. It witnessed the collapsed of
banks and non-banks financial institutions. In the mortgage finance sub-sector, 97
out of the 286 licensed primary mortgage institutions (PMIs) had their licenses
withdrawn in 1997 due to insolvency, while only 54 are said to be stable and
sound. This situation is even worst with the community banks and finance houses.
This research has looked at the fundamental factors that led to the distress situation
in the financial industry with particular reference to the mortgage finance sub-sector
between 1992-1997. This includes:-
i. Poor capitalization
ii. Bad investment portfolio
iii. Political and economic instability
iv. Mobilization of short term funds and excessive interest rate payments
v. Inconsistent government policies
vi. Inadequate monitoring and control by the regulatory authorities
vii. Management/boardroom problems.
These findings are based on the empirical investigations and observation of the
situation in Happy Home Savings and Loans Ltd., the analysis and evaluation of
other PMIs. An evaluation of the regulatory framework and policies for PMIs
operations shows an inherent inconsistency and lack of adequate capacity to
monitor and regulate their activities by the supervising authorities
Description
A PROJECT SUBMITTED TO THE POSTGRADUATE
SCHOOL, AHMADU BELLO UNIVERSITY IN PARTIAL
FULFILLMENT FOR THE AWARD OF THE MASTER OF
BUSINESS ADMINISTRATION DEGREE
DEPARTMENT OF BUSINESS ADMINISTRATION
FACULTY OF ADMINISTRATION
AHMADU BELLO UNIVERSITY
ZARIA.
Keywords
DISTRESS,, NIGERIAN,, FINANCIAL,, SECTOR: