CHAPTER ONE
1.0
INTRODUCTION:
Nigerian financial institution are regarded as the
part of financial industries that deals with exploitation, exploration and
sourcing funds, investment and sharing of funds to individuals. However, the Nigerian financial system can be
said to consist of the following subsystems:
1.
The banking system
2.
The non-banking financial institution
3.
The regulatory financial institution
4.
The traditional financial institution.
In practice, the growth of most of these financial
institution has become that of “Survival of the fittest†due to the lukewarm
attitude of the Nigerian citizens in exposing their business interest to
organizations incorporated under this system.
This is very bad for the economy considering the
role non-banking financial institutions (NBFIS) play in supporting and
sustaining the welfare of the small scale business and thrifty motivation given
to low any high incomers in our present economy still developing.
1.1 PURPOSE OF THE STUDY:
The purpose of the study as concerned in this topic
is undertaken with the following objectives in mind.
(i)
To identify the types of non-banking financial
organization in Nigeria;
(ii)
To find out whether or not this various non-banking
institutions have any difference and similarities to the banking system.
(iii)
To also find out their various sources of fund and
respective functions.
(iv)
To find out if there is any principles and loss guiding
the firms and the parties that transact business with them.
1.2
SIGNIFICANCE OF THE STUDY:
The study is very important mostly now that our
economy is gradually developing with the current government policies on
corruption. We shall also see how
non-banking financial institution helps in the upliftment of national economy
thus:
(i)
They offer grant assistance in borrowing of funds for
the establishment of small and large-scale business enterprises.
(ii)
They provide intermediary services to facilitate prompt
and safer transaction.
(iii)
They reduce the risk that is being faced in attempting
to earn a return on their saving.
1.3
LIMITATION OF THE STUDY:
It is imperative that the study of this magnitude
will on call visits to almost the 36 States in the country to bring information
from numerous non-banking financial institutions. But this idea was not possible due to lack of
time and enough money resources. As a
result of these constraints, the study was limited to only five firms of
non-banking financial institution in Enugu and Anambra State with the hope that conclusions
gotten in the course of study world averagely apply to other States and
non-banking financial sectors.
1.4
DEFINITION OF TERMS:
NBFI:
Non-Banking Financial Institution. They are those financial institutions that
are by law not permitted to operate banking services but usually play active
roles in financial intermediation.
FINANCIAL SYSTEM:
This refers to the institutional or other
arrangements that transfer savings from those who generate them to those who
ultimately use them for consumption or for investment purposes.
FINANCIAL INTERMEDIATION:
This refers to the activities of institutions which
borrow money from individuals and other institutions in order to make loans or
other investments.
FINANCIAL INSTITUTION:
This is an organized body concerned with the
management of money.
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