THE ROLE OF FINANCIAL INSTITUTION IN THE MANAGEMENT OF LOAN SYNDICATION IN NIGERIA ECONOMY. A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
The role of financial institution is to transfer savings from surplus economic unit to deficit economic unit who will utilize the savings in generating investment. The savings surplus economic unit would in the process have earned income in the form of interest on those funds that wouild have been lying idle, while the saving deficit economic unit would have been in the process of earn profit from the investment attempts. Attempt would now be made in briefly tigate some financial institutions.
In terminology, the difference and relationship among four basis concepts which will be used frequently in the discussion must first be explained. These are the financial system, financial system,financial market, financial instrument, rules, conventions and norms that facilitate and regulate the flow of fund s through the macro-economy. The system is controlled by the government through agency of the central bank of which supervise the activities of financial intermediaries and monitors adherence to the government monitory and ficial- policies the major types of financial intermediarie are commercial banks, merchant bank, Development financial institution insurance companies, credit and saving institution, investment trust and mortgage institution.
Financial market on the others hand, are simply the various facilities provided by the financial system for the creation of custodianship and distribution of financial assets and liabilities and the market is divided into two major segment, we have the money market and capital market.
Financial institution occupy a vital position and play a land role in the economy of the nation. Their major purposes are proper mobilization of fund as well as provision of capital for industrial development which is aimed at enhancing economic- growth and development in the early year off banking operation in Nigeria, bank performed their intermediary functious by giving loan mainly on individual basic (ie separately) but as the country entered the threshold of development and more investment opportunities opened up, industrialist started demanding large sum of money which is provide by bank on medium or long term basis.