CAUSES AND EFFECTS OF MISMANAGEMENT IN FINANCIAL INSTITUTIONS. A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
A financial institution is an organized body concerned with the management of money. This is to say that the institution is responsible for the leading and borrowing of money in other words, it is an institution involved in financial intermediation where money is mobilized and channeled from the public sailing (those who have surplus funds want to save to those who want to invest in productive activities. Some of the institution in Nigeria are commercial banks, stock exchange market, merchant bank, CBN insurance companies, development banker.
Mismanagement is defined by land-man English dictionary as controlled or deal with private, public or business affairs badly, unskillfully etc. The mismanagement is also defined by Oxford English Dictionary, Version, it states that mismanagement –mismanage, bad improper administrations to manager-badly or wrongly. Then financial mismanagement according to the above definitions may be improper administration, bad or wrongly used of money, inadequate collateral security or granting loan. Misappropriation of money or management of finance unskillfully. They are good in selling of securities. They are sources of revenue to the government. They also provide a lot of advice to the government. They help the government extremely in international trade etc.
To the public and private individual, bank provide drastic support to public and individual affairs. The bank grant loans advances, make payment locally or outside Nigeria. Infact, they perform variety functions to satisfy the financial needs of all types of customers from small personal account holder to the big incorporates and public organization. That is by accepting of deposits, safe custodying agency services etc.
Furthermore, mismanagement in financial institutions make them unable to tackle their problem and obligations like paying of taxes to the government, cash-reserve, reserve rates, workers salaries going out loans etc.
After the overthrown of the last civilian administration in the country, many financial institution made a lot of staggering discoveries to funds misappropriate through inflated contracts, bribery and kick backs etc. Since then Nigerian economy has become a sick body up till today. Infact financial analyst’s puts public fund misused and those smuggled outside the country at several millions of naira.
Finally, the various officers mostly the managers and cashiers of those institutions are accused of the abnormal of mismanagement in financial institutions.
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