EVALUATION OF THE DYNAMIC EFFECTS OF IOLE CASH HOLDING IN A DEVELOPING ECONO0MY.

A CASH STUDY OF OGBETE MAIN MARKET

PROPOSAL

With the multifarious (many / various ) increase in the economic system money become the most acceptable means of transaction and payment of debt. The proportion of money which is not used in normal recurring transaction or is held in excess of the normal need is called “idle cash” The excess of the normal need is called “Idle cash” The continuos with drawl of money from the circular flow of income between the household individual s, firms and industries becenies so alarming and devastating; it deprive the users the great opportunity of making any meaningful and judicious use of idle cash.

In the area of research methodology primary and secondary source of data collecting will be adopted. The primary data source includes oral interview administration on questionnaire observation and literature review. While the secondary sources of data collection to be adopted are the use of text books, financial standards etc.

There are some constraint towards this project which I include money –which is inadequate time to combine my lectures, personal chores and project research work, protocols to be observed will surely delay this project. Inadequate libraries and materials to lay hands on.

The researcher therefore wish to embark on this work to remedy some of these problems and their effects on the economy. The project work intend to highlight the pros and cons of the negative use of idle cash , constant flow of money in circulation , light interest rate and poor cross Domestic product (GDP) the research work will not only be in document for the accounts department

ACKNOWLEGEMENT

With he heart full of joy and happiness I wish to express my sincere gratitude and deep appreciation to God Almighty who saw me through in the course of carrying out this research work.

My sincere appreciation goes to my project supervisor Dava Osuagwu who guided me in all this project work. . I equally indebted to the numerous libraries that I used in the course of work. I hereby putting on record the courteous assistance I received from the staffs of library.

My warm and sincere gratitude goes to my beloved darling Mr Ben Collins Nweke, My children favour and valentine Ben –Nweke, my parents brothers and sisters my in-laws.

It is impossible to mention by name all who have contributed to this research work but the researcher would specially mention Agwunedu Martina I. ,My head of department Mr Ani Wilson. U. and all my Friends and well wishes To the Almighty God the research gives the glory for any success recorded in this research work.

Ben –Nweke Ifeoma M.

Ac/H2003/ 069.

TABLE OF CONTENTS

Title page

Dedication

Approval page

Abstract

Proposal

Acknowledgement

Table of contents

CHAPTER ONE

INTERODUCTION

1.0 Background information of the study

1.1 Statement of the problem

1.2 Objective of study

1.3 Hypothesis

1.4 Significance of the study

1.5 Scope of the study

1.6 Limitations of the study

1.7 Definitions of term

REFERENCES

CHAPTER TWO

LITERATURE REVIEW

2.0 The role of money in a developing economy

2.1 Money and banks

2.2 Demand for money

2.3 Motives of demanding money

2.4 Banks functions and money creation

2.5 Limitations of money creation

2.6 Supply of money

2.7 Velocity of circulation

2.8 The concept of idle cash

2.9 Reason that led to a fall in idle cash

2.10 Effect of idle cash holding in a developing economy

CHAPTER THREE:

RESEARCH DESIGN / METHODOLOGY

3.0 Area of study

3.1 Source of data

3.2 Data collection methods

3.3 Questionnaire design.

3.4 Sample design

3.5 Method of data analysis

3.6 Method of testing hypothesis

CHAPTER FOUR

4.0 Data presentation and Analysis

4.1 Test of hypothesis

CHAPTER FIVE

SUMMARY OF FINDINGS RCOMMENDATION AND CONCLUSION

5.0 Summary of findings

5.1 Recommendation

5.2 Conclusion

BIBLIOGRAPHY

QUESTIONNAIRES

CHAPTER ONE

INTRODUCTION

1.0 BACKGROUND INFORMATION OF THE SUBJECT MATTER

In a developing economy like ours, a sizeable amount of money is held in excess of normal need. This excess money is held is idle, because it does not produce any income, The business communities, individuals, household etc are holding a great proportion of this idle money. The involvement in the evil of boarding cash has a very serious effect on the financial institutions. The banking system ability of creating deposit money is constrained or hampered. The banks can only create small amount of deposit money, which is not enough to satisfy the teeming population seeking for loan. As a result of this, the interest rate will increase proportionately. Prices will increase while on the other hand demand will reduce increase in unemployment rate and drastic fall in national income.

The industrial sector is also affected because they depend on commercial and merchant banks loan for effective production and expansion. The consequences of bank not wholly honoring loan realest has put these industries in a light corner by producing below capacity, low quality product and retrenchment as an available means of production cost cut measure or to bread even

Economic growth and development of any nation is a combination of many variable ie price, inflation deflation employment and interest rate. This variable. Money is the prime mover of economic development as a result of its relationship with economic activities. Increase in the volume of money supply in the economy will definitely bring a remarkable change in the interest rate.

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