- Business, Education, Research Methodology, Business Administration, Islam, Strategic Planning, and 21 moreStrategy, Accountability, Transparency, Islamic Jurisprudence, Interest, Survival, Discriminant Analysis, Usury, Local Governments, Bank failure, Corporate Failure, Business and Administration, Turnaround Strategies, Bank Distress, Nigerian Banking Industry, Distress resolution, Prediction Model, Univariate model, Ribah, Holding Actions, and ASSESSMENT OF THE CAUSES AND IMPACT OF FINANCIAL DISTRESS ON NIGERIA BANKedit
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is arguably the most important and crucial component in human capital development. It is considered indispensable to the building of a strong and viable economy. It is an important ingredient for national development.
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The paper assesses the relationship between banks' compliance with accounting standards and the impact of such on attributes of profitability, asset-base and number of branches.Eleven banks were sampled out of a population of 25 banks... more
The paper assesses the relationship between banks' compliance with accounting standards and the impact of such on attributes of profitability, asset-base and number of branches.Eleven banks were sampled out of a population of 25 banks existing in Nigeria as at end of December 2010.The paper examines the financial statements of the sampled banks between 2004 and 2008 in relation to the disclosure requirement of SAS 10, using linear regression. It was found that while profitability level and asset base are positively related to compliance with accounting standards, number of branches has no correlation. The paper recommends that, banks should pay more attention to the issue of compliance with accounting standards as it increases their profitability and asset base.
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Barriers to women's entrepreneurial pursuits are numerous, but the one that appears to be dominant is accessibility to growth capital in Nigeria, particularly Sokoto State considering its unassuming level of economic development. This... more
Barriers to women's entrepreneurial pursuits are numerous, but the one that appears to be dominant is accessibility to growth capital in Nigeria, particularly Sokoto State considering its unassuming level of economic development. This study examinesthe consequences of women entrepreneurs' inability to access capital on socioeconomic development.It is a survey research that collected data through a structured questionnaire from a sample of 804 women entrepreneurs drawn from identified clusters where women entrepreneurs are predominantly found. The data were analyzed and hypotheses tested usinglogistic regression. The results that emerged show unit contribution of marital status on combined element of access is-0.932, while purdah is-0.582 and the parameter estimate indicated a high level of significance at 1% meaning a significant relationship exist between socio-cultural constraints and inability of women entrepreneurs to access growth capital in Sokoto State.This study also revealed thatwomen entrepreneurs found it difficult to access capital via formal financing institutions due to strict compliance with collateral requirements by such institutions;and there is high preponderance ofsemi-illiteracy, which affected their ability to keep record. The study recommends that women entrepreneurs should form network and strong alliance to create linkages, which can lead to establishment of industrial parks, market linkages and financial intervention. Financial institutions such as banks should create personalized banking relationship so as to explore the niche and tap the opportunity therein. Finally, Sokoto state government should as a matter of urgency beef-up the capacity of indigenous women entrepreneurs on areas of record keeping and capital access strategies to enable them have access to capital for Enterprise growth.
The Nigerian banking industry has for over two decades suffered from turmoil of distress on one hand and wave of regulatory and supervisory activities to stem the tide on the other. These activities were aimed at strengthening the... more
The Nigerian banking industry has for over two decades suffered from turmoil of distress on one hand and wave of regulatory and supervisory activities to stem the tide on the other. These activities were aimed at strengthening the industry in order to enhance economic efficiency and effective resource allocation through service-driven competition and improvement in quality and spread of banking service. Consequently, many banks had to be liquidated in the process particularly when their net worth was in negative bringing untold hardships to depositors and other stakeholders. There is therefore the need for an early warning model for the industry with the hope that prompt but appropriate as well as effective strategies could be put in place in order to resolve crises in banks before they precipitate into failure. Data were collected for this purpose from thirty-two commercial banks using their 1996 and 1997 financial reports. The banks were divided into two groups: distressed and healthy. The study relied on a variety of accounting ratios in developing a discriminant model that distinguish distressed and healthy banks. The study shows that distressed banks differ significantly from healthy banks with respect to capader3, capader5, asequal1, and ownership performance variables. To study concludes that an early warning model developed in this study could be used by various stakeholders to monitor distress-proneness, direct attention to laggard areas for remedial action, and adjust their relationships where necessary.
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In Nigeria, the financial sector remained in a sorry state for over a decade – since late 1980s and the whole of 1990s (and quite recently as a result of global financial crisis). The sector has undergone a crisis of far reaching... more
In Nigeria, the financial sector remained in a sorry state for over a decade – since late 1980s and the whole of 1990s (and quite recently as a result of global financial crisis). The sector has undergone a crisis of far reaching magnitude comparable to the failures of the early fifties (50s). Between 1986 and 1994, the performance of licensed banks in the system has been sour. Realising the domino ripples effect of distress and the fact that the efficiency in the banking sector affects the wealth and confidence levels in the entire economy, the government implemented several failure resolution options through the regulatory authorities (CBN & NDIC) with a view to resolving the distress in the banking industry. This paper using empirical data attempts to critically examine the impact of some of these strategies. The paper concludes that the strategies failed largely due to internal weaknesses such as poor management and excessive risk taking as well as weaknesses inherent in the regulatory framework. The paper recommends among others prompt regulatory intervention and change in management. This is to avoid a situation where dishonest and fraudulent managers are retained and this will increase the chances bank managers behaving prudently.
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The paper provides a general discussion on strategic planning regarding the conceptual issues, the contextual background and practical application in Local Governments. It generally reviews literature for this purpose and in addition to... more
The paper provides a general discussion on strategic planning regarding the conceptual issues, the contextual background and practical application in Local Governments. It generally reviews literature for this purpose and in addition to the above, discusses the benefits of a good strategic plan and the characteristics it should satisfy to make it functional and practical. The paper recognises the need for Local Government administrators and other stakeholders to start thinking strategically as a panacea to some of the problems that have bedevilled this important tier of government. This paper believes that beyond the corporate bodies and other higher tiers of government, the Local governments considering their importance and being closer to the grassroots, should engage in proper planning with strategic focus.
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This paper examines the possibility of providing an early warning model for commercial banking sub-sector with the hope that appropriate as well as effective strategies could be adopted to resolve crises promptly before they precipitate... more
This paper examines the possibility of providing an early warning model for commercial banking sub-sector with the hope that appropriate as well as effective strategies could be adopted to resolve crises promptly before they precipitate into failure. Data were collected for this purpose from thirty-two commercial banks using their 1996 and 1997 Financial Reports. The banks are divided into two groups: distressed and healthy. The study relied on a variety of accounting ratios in developing univariate (independent t-test) model in order to explain the causes of distress and whether any difference exists between distressed and healthy banks. This analysis confirms that there is a significant difference between distress and healthy banks. The univariate model using independent t-test shows that distressed and healthy commercial banks are significantly different in respect of eight ratios at 1 percent and 5 percent levels of significance. To study concludes that an early warning model developed in this study could be used by various stakeholders to monitor distress-proneness, direct attention to laggard areas for remedial action, and adjust their relationships where necessary.
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This paper is a theoretical exposition into the causes of bank failure and different strategies to turn ailing banks around. It is quite timely considering the recent removal of five chief executives of banks followed by a N400 billion... more
This paper is a theoretical exposition into the causes of bank failure and different strategies to turn ailing banks around. It is quite timely considering the recent removal of five chief executives of banks followed by a N400 billion bailout by the Central Bank of Nigeria (CBN). Since the banking industry is the engine growth of any economy, failure in banks should not be allowed due to contagious nature of bank failures. Thus, this paper investigates into these causes and examines the different turnaround strategies that can be put in place to address such problems early enough for the purpose of taking remedial actions. This paper concludes that since turnaround strategy involves the reallocation of resources, the most commonly reallocated resource in the implementation of a turnaround strategy is management and therefore gives credence to the recent action of the CBN.
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This paper is a theoretical exposition into the causes and consequences of bank distress in the Nigerian banking industry. In the last two decades, the Nigerian banking industry similar to what happened in Asia and Europe faced a lot of... more
This paper is a theoretical exposition into the causes and consequences of bank distress in the Nigerian banking industry. In the last two decades, the Nigerian banking industry similar to what happened in Asia and Europe faced a lot of crises which lead to retardation of economic growth and development. The causes of bank distress are diverse and the consequences enormous. Thus, there is the need to address this issue in order to provide basis for minimising its occurrence in the future. This paper examines these major causes as well as consequences with a view to making contribution to the existing literature and to serve as a podium for sensitising all the stakeholders on the need to systematically monitor the affairs of their banks to stop them from going into the doldrums.