CHAPTER
ONE

INTRODUCTION

1.1     
Background
of the study

Financial institutions are organizations which deal basically
in money.
`They constitute the financial framework of an economy.
Financial institutions help to pool savings and excess liquidity from millions
of individuals and firms within the country and make them available to those
who need them for various purposes.
Financial institutions include commercial bank
(Joint stock banks) discount houses, the central bank, saving banks,
development bank (BOI), insurance companies, hire purchase companies, the
national providence fund, the stock exchange building etc.
Before the introduction Nigeria export- import
bank (NEXIM) in Nigeria as at 1999 the commercial banks were generally referred
to retail bankers, while merchant banks were known as wholesale bankers.
However the two operate and offer almost the
same services that any line of demarcation is now rather fussy- one can only
say that the distinguishing factor between the two sectors of the banking
industry is that the commercial banks are members of the central bank of
Nigeria (CBN) clearing house, While the merchant bank are not members of the
Central Bank clearing house.
Another contentious factor is the licence
granted merchant banks to take companies to capital market which the Nigeria
stock exchange denied the commercial licensed them to do so, the introduction
of the universal banking system of divide effect. A trader could approach
either commercial or merchant bank for financing facility for his transactions.
They can provide both short and long term facilities and can design any product
which meets any requirements of customers.
The Nigeria export-import bank (NEXIM) was
established in 1988 but commenced operations in January 1991. The bank was
established to provide mainly short term financing for exporters who need
working capital to buy hair activities. Among the function of the banks is the
maintenance of a foreign exchange revolution fund which is to be made available
as loans to exporters who need to export machineries, raw materials and spare
parts to satisfy export orders. It can also consider loans involving domestic
trade which are likely to assist exports.

The
banking system has been integral part of the structural reforms and it has a
leading role in management of policy change. The role of financial institutions
in export financing is that of a cartelist and a committed broker. It ranges
from assisting company and individual on how to enter export market through
financing and handing shipping document and collect export proceedings.
Generally an export can meet his financing needs
in the following number of ways.
1. Advance payment from overseas buyers
2. Internal general funds
3. Credit from bank and other financing
institution.
4. Credit provided by the government in the
buyer country.

1.2
STATEMENTS OF PROBLEMS

It is regrettable that despite their various funding
mechanism and incentives put by financial institution s to stimulate the growth
of export in relative contribution to the economy is still very low because of
this low rectum, financial institution face the risk of non-payment of loan and
advance given to export.Firstly, the problems of policy stability it is
needless to formulate a beautiful policy on export only to be discontinued,
shortly, example the re-introduction of regulatory guideline in domilarily
account was discentives to the exporter. This was reverse later by central bank
of Nigeria (CBN) circulated in September. After much pressure recently Nigeria
export and import only provide fund and transfer the risk to other banks.
Another problem is that Nigeria exporters who ventures into foreign market do
not avail themselves with the information relating to import countries such as
culture, regulation and wealth this result in low returns those by increase the
risk being faced by the financial institution that finances them. The Nigeria
through the activities of some of its citizen has activities of some of its
citizen has developed a negative business image both at home and abroad the
poor included.Accommodation for a period of 3 days to 50 days, while long term
credit usually related to a period of more than 5 years. The exporters need pre-shipment
finance for security the raw material and other input required for the
execution of an export also ranging from the shipment of goods to foreign
countries the credit is therefore regards as a loan granted to finance goods on
the bases of

1.
Letter of credit open in favour of exporter by overseas. Imports bank.
2. Insurance of ware House Company. The duration of such credit provided by the
past does not usually exceed 12 days post shipment credit is a loan or advance
granted or any other type of credit, provided by the bank to an exporter of
goods from the date of export proceeds within today. The main types of advance
for post shipment are negotiated form of export bill drawn with confound export
contract will order.

The
Nigeria export and import bank (NEXIM) provides both long and short term credit
through commercial and merchant bank to support export from non oil product
a. Advance fee fund syndromes popularly called 419
b, Cheating
c. Supplying of poor quality product
d. Manipulation of words and document
The practice sign through illegal export of goods especially to neigbouring
west African Countries which cannot be over worked as a in habited factor.

1.3
OBJECTIVE OF THE STUDY

The
objective of this research work is as follows:
i. To study the modalities adopted by export
that need export assessing
ii. To determine the economy polices finance and
their effectiveness on the export business
iii To ascertain the problems encountered by the
financial institutions in export production finance.
iv. To examine the prospective of export
financing in Nigeria
v. To ascertain the extent to which oriented
industries benefited from export financing.

1.4 FORMULATION HYPOTHESIS
HO: Export financing does
not have prospect in Nigeria
HI: Export financing have prospect in Nigeria
HO: Modalities are not adopted by financial institution
is assessing goods for export.
H2: Modalities are adopted by financial institution in
assessing goods for export.
HO: Financial institutions in export financing in Nigeria
does not encounter Problems.
H3: Financial institutions in export financing in Nigeria
encounter problems.
HO: Export oriented financial institution has not
affected financial industries to an extent.
H4: Export oriented financial institution has affected
finance industries to an extent

1.5 SIGNIFICANCE OF
THE STUDY

 The research work on the role of financial Institutions in
export financing will be beneficial to the Nigeria economy in the following
ways.
1. GENERAL
ECONOMY: It will help the nation in devising the foreign exchange and
revenue of the nation as well as receiving pressure on the balance of payment

2. MANUFACTURERS:
With the introduction of the structural adjustment program (SAP) in 1986, many manufacturers
have been oriented into the system and hopefully manufactures export good with
the financial institutions incentives will improve the production potentials as
well as production producing large qualities of export purpose.
3. EXPORTERS:
The financing of export will go a large way in helping Nigeria exports to
compete favorably with the international world.
4. STUDENTS:
This research work will be valuable to the students who may carry out the
similar research work in related field for reference purposes.
5. FINANCIAL
INSTITUTIONS: The research work will work into the problems and the
prospect of institution the export finance and the recommended ways to improve
on it

1.6 SCOPE OF THE STUDY

The scope of the study is very wide it focuses on the roles
of financial institution in export financing in Nigeria. As a result of this,
the researcher has consulted with several reviews on the issues of the roles of
financial institution in export financing in Nigeria which are appreciated for
employees at a particular point in time. It also serves as a useful guide to
organizations. In their future decision making process on training related
issues, knowledge of private sectors.

1.7 LIMITATION OF THE
STUDY

 For the nature of the research work the researches
Intended to limit its work because of the time of this research work the
economics of the nation is also battered that the research cannot afford to
visit all the financial institution and has a limited time.
ii. TIME
FACTOR: The research has witnessed some months duration in season. However
the researcher was able to utilize the available period
iii. WORK
LOAD: The department worked load is numerous for the research work coupled
with the fact that the researcher must attend lectures there by prevent a
through and intensive work.

1.8 DEFINITION OF
TERMS

EXPORT ORIENTATION
GOODS: Goods produced with the sales
intention of exporting them to countries in order to generate foreign exchange.

2. FOREGIN EXCHANGE:
Currency of other countries reserved in a given country.

3. PRE-SHIPMENT AND
POST SHIPMENTS: This is a loan granted to any credit granted by the bank to
exporter of the date of extending the credit before and after shipment of goods
to the date off receipt of exporter proceeds within 60 days.

4. BALANCE OF PAYMENT:
The relationship between a countries payment is form of a statement of income
and a statement account on the international account

1.9
ORGANIZATION OF THE STUDY

This research work is
organized in five chapters, for easy understanding, as follows

Chapter
one is concern with the introduction, which consist of the (overview, of the
study), historical background, statement of problem, objectives of the study,
research hypotheses, significance of the study, scope and limitation of the
study, definition of terms and historical background of the study. Chapter two
highlights the theoretical framework on which the study is based, thus the
review of related literature. Chapter three deals on the research design and
methodology adopted in the study. Chapter four concentrate on the data
collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and
recommendations made of the study

---

Talk to us right now: (+234)906-451-7926 (Call/WhatsApp)

---

Share a Comment