Project Abstract

Project Overview

<p> </p><p><b>INTRODUCTION</b></p><p><b>1.1 &nbsp; &nbsp; <br></b><b>Background<br>of the study</b></p><p>Financial institutions are organizations which deal basically<br>in money.<br>`They constitute the financial framework of an economy.<br>Financial institutions help to pool savings and excess liquidity from millions<br>of individuals and firms within the country and make them available to those<br>who need them for various purposes.<br>Financial institutions include commercial bank<br>(Joint stock banks) discount houses, the central bank, saving banks,<br>development bank (BOI), insurance companies, hire purchase companies, the<br>national providence fund, the stock exchange building etc.<br>Before the introduction Nigeria export- import<br>bank (NEXIM) in Nigeria as at 1999 the commercial banks were generally referred<br>to retail bankers, while merchant banks were known as wholesale bankers.<br>However the two operate and offer almost the<br>same services that any line of demarcation is now rather fussy- one can only<br>say that the distinguishing factor between the two sectors of the banking<br>industry is that the commercial banks are members of the central bank of<br>Nigeria (CBN) clearing house, While the merchant bank are not members of the<br>Central Bank clearing house.<br>Another contentious factor is the licence<br>granted merchant banks to take companies to capital market which the Nigeria<br>stock exchange denied the commercial licensed them to do so, the introduction<br>of the universal banking system of divide effect. A trader could approach<br>either commercial or merchant bank for financing facility for his transactions.<br>They can provide both short and long term facilities and can design any product<br>which meets any requirements of customers.<br>The Nigeria export-import bank (NEXIM) was<br>established in 1988 but commenced operations in January 1991. The bank was<br>established to provide mainly short term financing for exporters who need<br>working capital to buy hair activities. Among the function of the banks is the<br>maintenance of a foreign exchange revolution fund which is to be made available<br>as loans to exporters who need to export machineries, raw materials and spare<br>parts to satisfy export orders. It can also consider loans involving domestic<br>trade which are likely to assist exports.</p><p>The<br>banking system has been integral part of the structural reforms and it has a<br>leading role in management of policy change. The role of financial institutions<br>in export financing is that of a cartelist and a committed broker. It ranges<br>from assisting company and individual on how to enter export market through<br>financing and handing shipping document and collect export proceedings.<br>Generally an export can meet his financing needs<br>in the following number of ways.<br>1. Advance payment from overseas buyers<br>2. Internal general funds<br>3. Credit from bank and other financing<br>institution.<br>4. Credit provided by the government in the<br>buyer country.</p><p><b>1.2<br>STATEMENTS OF PROBLEMS</b></p><p>It is regrettable that despite their various funding<br>mechanism and incentives put by financial institution s to stimulate the growth<br>of export in relative contribution to the economy is still very low because of<br>this low rectum, financial institution face the risk of non-payment of loan and<br>advance given to export.Firstly, the problems of policy stability it is<br>needless to formulate a beautiful policy on export only to be discontinued,<br>shortly, example the re-introduction of regulatory guideline in domilarily<br>account was discentives to the exporter. This was reverse later by central bank<br>of Nigeria (CBN) circulated in September. After much pressure recently Nigeria<br>export and import only provide fund and transfer the risk to other banks.<br>Another problem is that Nigeria exporters who ventures into foreign market do<br>not avail themselves with the information relating to import countries such as<br>culture, regulation and wealth this result in low returns those by increase the<br>risk being faced by the financial institution that finances them. The Nigeria<br>through the activities of some of its citizen has activities of some of its<br>citizen has developed a negative business image both at home and abroad the<br>poor included.Accommodation for a period of 3 days to 50 days, while long term<br>credit usually related to a period of more than 5 years. The exporters need pre-shipment<br>finance for security the raw material and other input required for the<br>execution of an export also ranging from the shipment of goods to foreign<br>countries the credit is therefore regards as a loan granted to finance goods on<br>the bases of</p><p>1.<br>Letter of credit open in favour of exporter by overseas. Imports bank.<br>2. Insurance of ware House Company. The duration of such credit provided by the<br>past does not usually exceed 12 days post shipment credit is a loan or advance<br>granted or any other type of credit, provided by the bank to an exporter of<br>goods from the date of export proceeds within today. The main types of advance<br>for post shipment are negotiated form of export bill drawn with confound export<br>contract will order.</p><p>The<br>Nigeria export and import bank (NEXIM) provides both long and short term credit<br>through commercial and merchant bank to support export from non oil product<br>a. Advance fee fund syndromes popularly called 419<br>b, Cheating<br>c. Supplying of poor quality product<br>d. Manipulation of words and document<br>The practice sign through illegal export of goods especially to neigbouring<br>west African Countries which cannot be over worked as a in habited factor.</p><p><b>1.3<br>OBJECTIVE OF THE STUDY</b></p><p>The<br>objective of this research work is as follows:<br>i. To study the modalities adopted by export<br>that need export assessing<br>ii. To determine the economy polices finance and<br>their effectiveness on the export business<br>iii To ascertain the problems encountered by the<br>financial institutions in export production finance.<br>iv. To examine the prospective of export<br>financing in Nigeria<br>v. To ascertain the extent to which oriented<br>industries benefited from export financing.</p><p><b>1.4 FORMULATION HYPOTHESIS</b><br><b>HO:</b>&nbsp;Export financing does<br>not have prospect in Nigeria<br><b>HI:</b>&nbsp;Export financing have prospect in Nigeria<br><b>HO:</b>&nbsp;Modalities are not adopted by financial institution<br>is assessing goods for export.<br><b>H2:</b>&nbsp;Modalities are adopted by financial institution in<br>assessing goods for export.<br><b>HO:</b>&nbsp;Financial institutions in export financing in Nigeria<br>does not encounter Problems.<br><b>H3:</b>&nbsp;Financial institutions in export financing in Nigeria<br>encounter problems.<br><b>HO:</b>&nbsp;Export oriented financial institution has not<br>affected financial industries to an extent.<br><b>H4:</b>&nbsp;Export oriented financial institution has affected<br>finance industries to an extent</p><p><b>1.5 SIGNIFICANCE OF<br>THE STUDY</b></p><p>&nbsp;The research work on the role of financial Institutions in<br>export financing will be beneficial to the Nigeria economy in the following<br>ways.<br>1. <b>GENERAL<br>ECONOMY:</b>&nbsp;It will help the nation in devising the foreign exchange and<br>revenue of the nation as well as receiving pressure on the balance of payment</p><p>2. <b>MANUFACTURERS</b>:<br>With the introduction of the structural adjustment program (SAP) in 1986, many manufacturers<br>have been oriented into the system and hopefully manufactures export good with<br>the financial institutions incentives will improve the production potentials as<br>well as production producing large qualities of export purpose.<br>3. <b>EXPORTERS:</b><br>The financing of export will go a large way in helping Nigeria exports to<br>compete favorably with the international world.<br>4. <b>STUDENTS</b>:<br>This research work will be valuable to the students who may carry out the<br>similar research work in related field for reference purposes.<br>5. <b>FINANCIAL<br>INSTITUTIONS</b>: The research work will work into the problems and the<br>prospect of institution the export finance and the recommended ways to improve<br>on it</p><p><b>1.6 SCOPE OF THE STUDY</b></p><p>The scope of the study is very wide it focuses on the roles<br>of financial institution in export financing in Nigeria. As a result of this,<br>the researcher has consulted with several reviews on the issues of the roles of<br>financial institution in export financing in Nigeria which are appreciated for<br>employees at a particular point in time. It also serves as a useful guide to<br>organizations. In their future decision making process on training related<br>issues, knowledge of private sectors.</p><p><b>1.7 LIMITATION OF THE<br>STUDY</b></p><p>&nbsp;For the nature of the research work the researches<br>Intended to limit its work because of the time of this research work the<br>economics of the nation is also battered that the research cannot afford to<br>visit all the financial institution and has a limited time.<br>ii. <b>TIME<br>FACTOR</b>: The research has witnessed some months duration in season. However<br>the researcher was able to utilize the available period<br>iii. <b>WORK<br>LOAD</b>: The department worked load is numerous for the research work coupled<br>with the fact that the researcher must attend lectures there by prevent a<br>through and intensive work.</p><p><b>1.8 DEFINITION OF<br>TERMS</b></p><p><b>EXPORT ORIENTATION<br>GOODS</b>: Goods produced with the sales<br>intention of exporting them to countries in order to generate foreign exchange.</p><p>2. <b>FOREGIN EXCHANGE</b>:<br>Currency of other countries reserved in a given country.</p><p>3. <b>PRE-SHIPMENT AND<br>POST SHIPMENTS</b>: This is a loan granted to any credit granted by the bank to<br>exporter of the date of extending the credit before and after shipment of goods<br>to the date off receipt of exporter proceeds within 60 days.</p><p>4. <b>BALANCE OF PAYMENT</b>:<br>The relationship between a countries payment is form of a statement of income<br>and a statement account on the international account</p><p><b>1.9<br>ORGANIZATION OF THE STUDY</b></p><p>This research work is<br>organized in five chapters, for easy understanding, as follows</p><p>Chapter<br>one is concern with the introduction, which consist of the (overview, of the<br>study), historical background, statement of problem, objectives of the study,<br>research hypotheses, significance of the study, scope and limitation of the<br>study, definition of terms and historical background of the study. Chapter two<br>highlights the theoretical framework on which the study is based, thus the<br>review of related literature. Chapter three deals on the research design and<br>methodology adopted in the study. Chapter four concentrate on the data<br>collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and<br>recommendations made of the study</p> <br><p></p>