DISCOUNT HOUSES: THEIR RELEVANCE TO THE NIGERIAN FINANCIAL SYSTEM,
DISCOUNT HOUSES: THEIR RELEVANCE TO THE NIGERIAN FINANCIAL SYSTEM,
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Date
1992-12
Authors
AGANA, OKIEMITE EMMANUEL
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Abstract
Discount houses are a recent addition to the Nigerian financial system's matrix.
Discount houses are non-bank financial institutions which shift funds between
the Central Bank on one hand and licensed banks and other financial
institutions on the other hand, through the provision of discounting and
re-discounting of eligible short - term securities such as treasury bills and
certificates and commercial bills.
Discount houses are art Institutionalized mechanism for smoothing out the
surpluses and shortfalls in the supply of, or demand for liquid funds.
There is no gainsaying :hat discount houses are relevant to the Nigerian
financial system, but thd question really is "how feasible are they"? The answer
to this question was one of the main objectives of this study.
Several factors are militating against the successful introduction of discount
houses in Nigeria. Firstly, Nigerian banks do not respond adequately to the
issue of treasury instruments in-spite of the safety of the securities.
Secondly, the current inter-bank interest rate of 105% may not induce banks
to invest in treasury securities which yield only 17%. These days, banks and
other financial institutions seem more interested in investing in schemes which,
although might be more risky, would yield extra-ordinary profits within the
shortest possible time.
Thirdly, the usual administrative bottlenecks which have come to be known as
the "Nigerian factor" is frustrating their take off.
The Apex Bank has a major role to play if the dream of discount houses is to
get to fruition. This they Ce n do through improvements in their supervisory and
regulatory functions,
Description
A PROJECT SUBMITTED TO THE
POSTGRADUATE SCHOOL, AHMADU
BELLO UNIVERSITY ZARIA, IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD
OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION [M.B.A]
DEPARTMENT OF BUSINESS ADMINISTRATION
FACULTY OF ADMINISTRATION
AHMADU BELLO UNIVERSITY
ZARIA, NIGERIA
December, 1992
Keywords
DISCOUNT,, HOUSES,, RELEVANCE,, NIGERIAN,, FINANCIAL,, SYSTEM