CRITICAL ANALYSIS OF CAUSES AND PROBLEM OF FINANCIAL DISTRESS IN NIGERIA BANKING SECTOR
Based on the presentation and analysis of data on the topic the following are the major findings.
Inefficient management has contributed significantly to the financial distress in Nigeria banking sector. This was approved statistically with the chi-square test techniques.
It was also discovered that fraudulent practices are a big causes of financial distress in Nigeria banking sector.
Based on the presentation of data and chi-square techniques conducted the researcher was right. Furthermore, it was observed that financial distress in Nigerian banking sector has an adverse effect on the economy of Nigeria as a whole.
Finally, it was equally observed that loan mistnaches contributed to the financial distress in Nigeria banking sector.
The importance of capital as a necessity though not sufficient condition for economic growth is recognized in development economy where it is believed that the position of adequate financial resources is a pre-requisite for industrial transformation.
Experiences in some countries notably Japan, India and Germany have shown that banks if sufficiently in their respective countries could serve as an engine of growth to greatly assist the promotion of rapid economic transformation of any nation. Banks all over the world occupy a strategic and lending position in financial sector. Many Nigerians see banks as places nobody can mess up. Hence, their accepting institutions as the safety place for depositing their money. It is equally because of the confidence they have in the industry as a whole that over the years, many of them imbedded this habit of savings, which in turn is very necessary of positive economic development of the nation.
Ekechi (1995) said that confidence is a pre-requisite for economic recovery and sustained growth, but confidence is not a gift. It must be earned through the adjustment effort or rather confidence is rented because it is never yours and because it can be taken away anytime. The adjustable effort has to go on each and everyday”.