An Assessment of Contribution of Commercial Bank to the Economic Development of Nigeria

An Assessment of Contribution of Commercial Bank to the Economic Development of Nigeria


An Assessment of Contribution of Commercial Bank to the Economic Development of Nigeria


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Abstract on An Assessment of Contribution of Commercial Bank to the Economic Development of Nigeria

This study is conducted on an Assessment of Contribution of Commercial Banks in the Economic Development of Nigeria. The concept is also on eye opener to the society and business as well. The research was carried out by means of questionnaires and oral interview with the official/staff of the bank selected on which the following questions that need to be tested are based on the contribution of commercial bank to the economic development. In this research some relevant hypotheses have been formulated and their validity has been proven by the findings and analysis of relevant data obtained. It is hope that this study will give the readers, the societies and business world as a whole the need for effective understanding of the concept in order to achieve a sound atmosphere between the society and organization.




1.1   Background of the Study

1.2   Statement of the Problem       

1.3   Hypothesis/Research Questions

1.4   Objective of the Study             

1.5   Significance of the Study

1.6   Scope of the Study  

1.7   Limitation of the Study   

1.8   Historical Background of the Case Study


Literature Review

Conceptual Framework and Review of Related Literature

2.1   Introduction

2.2   Introduction to Banking Industry in Nigeria

2.3   Meaning of Commercial Bank 

2.4   Functions of Commercial Banks

2.5   Objectives of Commercial Banks

2.6   Problems of Commercial Banks      

2.7   Suggested Solution 

2.8   Recent Development in Commercial Banks in Nigeria

2.9   Definition of Term   



Research Methodology

3.1   Introduction    

3.2   Research Design

3.3   Population of the Study  

3.4   Sample and Sampling Techniques  

3.4.1        Method of Data Collection      

3.4.2 Primary Source

3.4.3 Secondary Source

3.5   Method of Data Analysis


Data Presentation and Analysis

4.0   Data Presentation   

4.1   Data Analysis  

4.2   Test of Hypothesis

4.3   Major Findings       


Summary, Recommendation and Conclusion

5.1   Summary

5.2   Conclusion

5.3   Recommendation    

5.4   Further Study



Chapter one on An Assessment of Contribution of Commercial Bank to the Economic Development of Nigeria



Nigeria as a nation is characterized by a developing economy due to the fact that the various sectors responsible for economic development are not optimally utilized as a result of which we have not being able to tap fully the natural resources that Nigeria is blessed with as it could increase our national earnings leading to an increase in per capital income instead. We have a reverse situation were there is low per capital income. Low standard of living increase in the level of insecurity etc. The first task every government put in its table of priority is economic development. Nigeria among other nations of the world is not excluded. In order to keep the development of the country in progress Bank plays a pivotal role especially the commercial banks. It is of importance to not that of this point the bedrock of every economy is the banking sector, of which the commercial bank is a leading pace. As a matter of fact, no country in the world in this present dispensation can boast of having developed or tested development without the adequate and timely contribution of commercial banks.

However, one of the major setbacks to economic development in countries today is the inadequate supply of capital. It is in this regard, the commercial banks serve as ling between those who need capital and those willing to save and make the money available to investors. They are expected to provide to an extent large credit facilities and divert voluntary savings into productive channels. In addition, they are to offer technical advice to industrialist by way of feasibility studies which ensure that investment are made in the right direction. Furthermore, there are numerous agencies/sectors involved in economic development, but of all the sector that stimulate growth and development into the economy of Nigeria is the commercial banks perhaps the commercial banks the most important role such as help to pool savings and excess liquidity from millionaires or rather millions of individuals and firms within the country making them available to those that require them for various purposes.

Economic development requires sustained improvement in social welfare that are pervasive through the society and modern economic growth that is confined to a small enclose within a developing society particularly if a non-indigenous people dominate that enclose, it is not economic development. Economic development requires that modern economic growth affect a broader segment of the total populace in a way that will enhance their welfare. It entails the provision of basic needs, acceleration of economic growth, reduction of inequality and unemployment, eradication of absolute poverty as well as changes in attitudes. Subsequent to the above provisions that stimulated the establishment of commercial banks in Nigeria is to meet the aspirations of the citizenry. This research work is aimed at identifying the contributions that commercial banks have made to the development of the Nigerian economy.


Countries over the world strive to articulate well meaning polices that would extinct them from obscurity. Nigeria as a nation is also on the queue alongside other countries that quest for economic prestige. That is why the country had established various commercial banks to salvage the economy. However, in spite the establishment of the commercial banks, Nigerians still decry of inadequate capital for investment, high level of unemployment. The reduction in the Gross Domestic Product (GDP) which were the care issues that the concept for the establishment commercial banks was conceived to address.


Hypothesis is the statement which shows the relationship between two variables. Consequently, for the purpose of this study, the hypothesis are as follows:

Ho: The establishment of commercial banks in Nigeria has contributed to economic upliftment of the country. Hi: The establishment of commercial banks in Nigeria has not contributed to economic upliftment of the country.

Ho: Increase in bank lending will reduce unemployment in the country.

Hi: Increase in banks lending will not reduce unemployment in the country.

Ho: Increase in banks lending will increase the country’s Gross Domestic Product (GDP)

Hi: Increase in banks lending will not increase the country’s Gross Domestic Product (GDP)


This study is primarily aimed at examining critically an assessment of contribution of commercial bank to the economic development of Nigeria. Specifically, the study aim to;

1. Evaluate the contribution of commercial bank to the economic growth of Nigeria.

2. Investigate the role of commercial bank in the development of the economy of Nigeria.

3. To make suggestions on how the activates of commercial bank could bring about investment

4. To appraise the extent to which commercial bank has been affected as a result of economic meld-down.

5. The study also aim at taking a critical look at the cause of the economic meltdown and how to manage it. 


The research project aim at critically looking into an assessment of contribution of commercial banks in the economic development of Nigeria with special reference to First Bank of Nigeria Plc. Nevertheless this study is significance in that it tries to analyze the assessment of commercial banking in relation to economic development. In addition this study will contribute to the existing literature and it will serve as a reference to any researcher or organization who may be conducting research in similar or related field in the future. To the institution, it shall be something to be referred to in years to come therefore. It shall be placed in the institution meaning other students of the institution involved in research work can benefit from the work. To the bank, particularly First Bank of Nigeria Plc, it will serve as an appraisal of their performance therefore they can make amendments where they are missing and serving as a means of encouragement where they are doing well.

Furthermore, the external users include prospective shareholders the government and the general public can use these project as a way of encouragement. To the shareholders, it can encourage them to invest especially if the bank is performing well. This is because they are sure that they will not run into loss at the end of the day or their investment in stock. To the government, it shall serve as a mirror to see the effect of directives in respect of bank lending and how it affects economic development of the country. And in addition to the government decision and policy it can use the bank as a means of channeling it’s capital project through the bank. To the general public especially customers of the bank due to the sound track record, recorded by the bank in term of service delivery and the safe keeping of customer money and valuables, these study is sure of increasing the level of confidence to the bank customers.


The main thrust of this study is essentially in assessing the contributions of commercial bank to the economic development of Nigeria. The study based its reference to First bank of Nigeria Plc, shall concentrate mainly on the lending of commercial bank and how it affects the economic development of Nigeria.


Besides time and resources constraint the researcher encountered some problems in the cause of gathering materials and analyzing data. The bank uses unwilling to release all the necessary data for the research work, probably for the fear of competitors. This passed a little problem for the researcher. Information that is vital to this study is considered secret and as such not released. The uncooperative attitude of some respondents which led to the non-return of some questionnaires was another setback to the researcher. The time given to the researcher to complete the research work was limited couple with daily lecture’s, the time allowed for this project is too short considering the academic activities all tied up with a short period of time.


First Bank of Nigeria Plc. For over a century has distinguished itself as a leading financial institution and a major contributor to the economic development and contribute to the advancement of Nigeria economy. The bank was incorporated as a limited liability company on march31, 1894 with head office in liver pool by Sir Alfred Jones, a shipping merchant. It started business in the office of Elder Demporate. A company in Lagos under the corporate name of the bank for British West Africa. (B.B.W.A) with a paid capital of 12,000 pounds stealing established earlier in 1892. In its early years of operation the bank recorded an impressive growth and worked closely with the colonial masters in their governance performing the traditional functions of a central bank such as issue of specie in the West Africa coverage, a branch was opened in Accra, Ghana in 1896 and another in fret won, Sieraleone in 1898. This marked the genesis of the banks international banks in Nigeria. Was in the old Calabar in 1900 and two years late services were extended to Northern Nigeria.

The bank had at various times embarked on restructuring initiatives. In 1957, it changes its name from Bank of British West Africa to Bank of West Africa. In 1969, the bank was incorporated locally as the standard bank of Nigeria Limited in line with the Company Decree of 1968. Changes in the name of the Bank introduced a decentralized structure with five regional administrations. To further enhance the Bank’s operational efficiency. This was reconfigured into sixteen area offices in 2003. In view of the foregoing, it was therefore a natural progression when in 2001, the Bank began in earnest gained momentum in 2003 and was launched on Tuesday, April 27, 2004 with the introduction of a new corporate identity. First Bank got listed on the Nigerian Stock Exchange (N.S.E) in March 1971 and has won several award like the 2008. Best bank, Nigerian Global Finance magazine, 2008. Best foreign exchange provider Nigeria, Global finance Magazine, 2008.

Financial institution Award petroleum Technology Association of Nigeria, 2008 Best Bank in Manufacturing financing. Nigerian Bankers Award, 2008. Super brands Nigerian Award, 2008. Diamond Award 2008. Youth and Gender Network 2008. While in 2007 External Award includes quoted company of the year. Nigeria Stock Exchange 2007. Winner, 31st Annual President’s merit Award. Nigeria Stock Exchange 2007. Annual Reports and Accounts merit Award. Nigeria Stock Exchange 2007. In addition, the Nigerian Stock Exchange president’s merit award was won by the bank of event time for the best financial report in the banking sector. In line with the banks mission statement, remain true to our name by providing the best financial services possible “and its brand essence “dependably dynamic” the bank will consistently transform itself as it forges ahead in its second century of qualitative banking to the nation.




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