Finance

The global financial crisis, brewing for a while, really started to show its effects in the middle of 2007 and into 2008. Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems. Indian economy began to slow down in 2007-08 (April-March) after reaching a GDP growth of 9.8 per cent in the last quarter of 2006-07. In fact, Indian economy grew at an annual average rate of 8.8 per cent during the five years ending 2007-08. In the first half of the financial year 2008-09, the growth rate dropped to 7.8 per cent. The global crisis has hit India through a “sudden stop” of capital inflows and a collapse of both external and domestic demand. The growth of the economy dropped to 6.7 per cent in 2008-09 from 9.0 per cent in the previous year and is slowly increased to 8% in 2009-10 and 8.5% for the financial year 2010-11. The present paper is an attempt to analyze the impact of global recession on Indian economy, how the Indian economy recovered and also analyze whether the global crisis still influencing the Indian economy

The economic and social benefits derived by women who join credit unions was measured in terms of the state of their businesses, income levels, monthly savings and the financial contribution of beneficiaries towards dependants’ education. The simple random sampling technique was used to select 50 women who had obtained business loans from the Credit Union within the time period of June 2009 to July 2010 financial year. The study showed a significant influence of loans on the socioeconomic status of the women beneficiaries of loans.

Corporate governance is leadership that has the rules, processes, or laws by which businesses are operated, regulated, and controlled, the internal factors are defined by the officers, stockholders or constitution of a corporation, as well as to external forces such as consumer groups, clients, and government regulations. A corporate governance perspective committed to ethical behaviours in business is very essential for business growth, the organization ethical operations and culture has been on the periphery of corporate governance and board leadership, linked mainly to corporate reputation. However, in today’s globalized and interconnected world, investors and other stakeholders have come to recognize that environmental, social, and governance based on the ethical responsibilities of a company as integral to its performance and long-term sustainability. Internal control procedures and policies implemented by an entity's board of directors must be in line with the values of the organization, audit committee, management, and other personnel to provide reasonable assurance of the entity in achieving its objectives related to reliable financial reporting, operating efficiency, and compliance with laws and regulations. Internal auditors in an organization should be able to test the design and implementation of the entity's internal control procedures and the reliability of its financial reporting. The global financial crisis has heightened the need for corporate boards of directors to provide well informed strategic direction and engage in oversight that stretches beyond short-term financial performance. Doing so prepares companies to more comprehensively address risks, by anticipating potentially adverse impacts on people and the environment and managing tangible and reputational risks. It can also generate wealth by creating shareholder value through an increase in business opportunities and broader access to markets. In recent years, corporate governance based on the ethical values has received increased attention because of high-profile scandals involving abuse of corporate power and, in some cases, alleged criminal activity by corporate officers. An integral part of an effective corporate governance regime includes provisions for civil or criminal prosecution of individuals who conduct unethical or illegal acts in the name of the enterprise.

The paper exposes some of the unethical practices that surrounds IMF stabilization polices. It specifically examines the functionality of the financial programming model of the IMF vis-à-vis its adoption and imposition on LDC’s. This is in turn juxtaposed with foundational Islamic norms. The author concludes with some remarks and recommendations.

The inefficaciousness and ethical deficiency of the current “Islamic” financial industry is well known. Taking a diachronic approach whilst resorting to scriptural reasoning, historical evidence and inductive rationale, the author suggests two prerequisites for Islamic financing. The paper is concluded with five scenarios that are in the author’s view, sine qua nons as far as Islamic financing is concerned.

External debt is one of the main sources of financing for some ECOWAS countries, which plays an important role in filling up the gap of scare resources as a result of low domestic savings and high current account deficit. The impact of external debt stock and debt servicing has become a significant area of study. The main focus of this thesis is to investigate the impact of external debt and debt servicing on some ECOWAS countries? economic growth over the period 1970 to 2008 by using annual times series data. The variables of the econometric model used in the study include the Gross Domestic Product as the dependent variable and external debt stock and debt servicing as the independent variables. Using annual time series data, ADF (Augmented Dickey- Fuller) and PP (Phillips-Perron) unit root tests are employed to test stationarity. Following the stationarity check of the time series data of some ECOWAS country, the cointegration test is applied to analyze the long-run relationship between the variables. Then the Error Correction Models are estimated, which provide a useful link between the long-run equilibrium and short-run disequilibrium dynamics.The results illustrate that the economic impact of external debt stock and its servicing varied for different countries among the ECOWAS countries. External debt contributes to economic growth in Benin and Niger while the impact of external debt stock adversely affect the economic growth of Burkina Faso, Cote d?Ivoire, Gambia, Guinea- Bissau, Nigeria, Sierra-Leone and Togo.

This study examined the effect of bank credit to the private sector on economic growth in Nigeria using data on Gross Domestic Product (GDP) and bank credit to private sector (BCPS). Inflation and interest rates were included in the study as control variables. All data were obtained from Central Bank of Nigeria (CBN) statistical bulletin and span across 1981 to 2010. Data stationarity were ensured using the Augmented Dickey Fuller (ADF) statistic, while the OLS were applied to ascertain the impact of bank credit to the private sector on economic growth. Results of the analysis showed that bank credit to private sectors has a statistical strong positive relationship with GDP and that as expected, bank credit to the private sector has statistically significant effect on economic growth. The paper recommends that the CBN should lower its minimum rediscount rate to a moderate level that will enable banks fix low interest rates on their loanable funds while adopting direct credit control to favour preferred sectors like Agriculture and manufacturing. Finally, monetary authorities should through monetary policy reduce legal reserves requirement for banks to enable the banking sector to create more credit for the economy. This will enhance investment, job and employment opportunities which on the other hand will boast economic growth in the country.

This study examines the causal relationship of selected bank financial ratios on lending to small and medium Enterprise (SMEs) in Nigeria. The data used for this study were gathered from Central Bank of Nigeria (CBN) statistical Bulletin for a period of 27 years (1983 – 2010). Granger causality and OLS were applied to a set of differenced bank financial ratios and it was found that a critical gap in bank intermediation still exists in the lending to SME sector in Nigeria. A positive relationship exists between ratio of Rural Loan to Deposit (RRLD) and aggregate liquidity ratio (LR) while the causal relationship flows from cash reserve ratio to liquidity ratio. The result suggests that the excess liquidity in the banking system between 1983 – 2010 did not improve the flow of credit to SMEs in Nigeria. Consequently, the banks have failed in their social role of financing the SMEs by restricting the spread of fiat money contrary to the expectations of the Keynes – Schumpeter model. There is also no evidence to show that the banks are dealing significantly with the problem of information asymmetries through improved relationship lending to the SMEs in Nigeria. Monetary Policy should therefore target critically bank variables (LR, CRR and LDR) while ensuring compliance with prudential standards and balancing aggregate portfolios between large and small businesses. Restoring the mandatory credit allocation regime could also help in improving SMEs lending.

In Nigeria credit has been recognized as an essential tool for promoting Small and Medium Enterprises since over 70 percent of the population are engaged in the informal sector. Thus, the government have recognized that for sustainable growth and development, the financial empowerment of the rural areas is vital being repository of SMEs. It is against this background that this paper seeks to examine the impact of commercial banks activities on SMEs in Nigeria Consistent with the objective, hypothesis was formulated. The population and the sample of the study were all the Commercial banks in Nigeria. The study utilized data from secondary source. Data were obtained from the Central Bank of Nigeria’s (CBN) Statistical bulletin. The time frame for the study is eighteen (18) years, covering the period of 1993 to 2010. The technique of analysis used in testing the data was Linear Regression Analysis. We concluded that even though commercial banks activities such as giving out loans and receiving deposits have positive impact on SMEs, there is room for the Commercial banks to gear more of its activities towards SMEs development in Nigeria. The study calls on appropriate authority such as the government to ensure the consistency of policies that will enhance SMEs development. Similarly, the Regulatory Authority and the Bankers Committee should encourage activities by Commercial banks to provide adequate funding to SMEs through SMEEIS.

The scourge of poverty and the rate at which the figure is growing has necessitated the establishment of many anti-poverty programmes by different administrations in Nigeria. As at 2010 the number of Nigerians living below poverty line stood at 72 million, this then means that nearly half of Nigeria Population of 160 million is living below poverty line with all the anti-poverty programmes put in place. This figure is still on the increase. Microfinance Banking is the most recent and the only anti-poverty programme that combines financial intermediation with provision of financial services to the poor in the society. This paper therefore examined the role of Microfinance Bank’s operations on poverty alleviation in Nigeria. Data for the study were generated via secondary sources. The study built a regression model in line with the hypotheses. SPSS package version 17.0 was used. We tested for and corrected Autocorrelation and Muiticoliinearity. Our findings were as follows: the operations of MFBs have played significant role in poverty reduction in Nigeria, loans and advances of MFBs have significant negative impact on poverty alleviation. Some of our of our findings were in agreement with the objectives of MFB, while those that were not in agreement reflect the peculiar circumstances of the operations of microfinance banking in Nigeria. Since the government of Nigeria is interested in alleviating poverty, this work will be of immense help. The government can support Microfinance development by promoting macroeconomic stability, and avoiding interest rate caps and high inflation, ensure that the benefits of Microfinance banking are targeted at the core poor.