ROLE OF INVESTMENT BANKING IN
DRIVING FINANCIAL INCLUSION IN
NIGERIA
, Abstract
Investment banks have played an integral part in the financial inclusion in Nigeria. For
this reason, various researchers have conducted studies to determine the role of the investment
banks in driving financial inclusion in Nigeria. Hence, the researcher of this study has utilized
the internet based-research method to obtain data for this study. Precisely, the researcher
analyzed the previous data from secondary sources. The researcher of this study aims to establish
the role of investment banks in driving financial inclusion in Nigeria. As a result, the researcher
developed six hypotheses for the study. The researcher accepted the alternate hypotheses for the
first two hypotheses. However, the researcher discovered that the dataset from previous scholarly
work proved the appropriateness of the other hypotheses. The test of the hypotheses helped the
researcher to derive findings and conclusions.
First, investment banks have strived to achieve financial inclusion to help strengthen the
economy in Nigeria. Second, the Nigerian government has formulated some policies to prompt
investment banks and other financial institutions to target the poor and vulnerable populations.
Third, investment banking activities has helped reform the financial system in Nigeria and made
it possible to connect with consumers from all parts of Nigeria. Fourth, investment banks have
helped to alleviate poverty and redistribute income. Fifth, the investment banks in Nigeria offer
stock market services that have helped encourage investment throughout the country. Sixth,
investment banks have supported and funded SMEs and as a result, created job opportunities and
increased the income of many families in the rural parts of Nigeria. Seventh, investment banks
have no other option but to use financial inclusion strategies as a tool of survival in the
competitive environment. Finally, investment bankers will undoubtedly encounter some
opportunities and challenges in the future. Overall, the researcher has formulated several
,recommendations that will help to ensure that investment banks play a significant role in the
achievement of financial inclusion in Nigeria.
Chapter 1: Introduction
1.1 Background
Investment banks have played an integral part in the world economy over the years.
Precisely, investment banks help firms to find investors for corporate bonds. Professionals in this
field examine financial statements in an organization and later advice the firm on the best
approach of putting securities on sale.
1.2 Statement of the Problem
An investment bank serves as an intermediary between investors and organizations
through initial public offerings (IPOs). For this reason, larger corporations in the world often
involve more than one investment bank in their IPOs. The modern revival of investment banking
started when the Central Bank of Nigeria’s governor issued a N25 billion capital directive in
2005 (Onu, 2013). The initiative helped most investment banks to instigate lucrative Merge and
Acquisition transactions. The government of Nigeria has since listed at least 178 investment
institutions publicly in the country. On the contrary, the Corporate Affairs Commission (CAC)
has registered at least 2.3 million investment firms that conduct financial operations in the
country (World Bank, 2016).
1.3 Purpose of the Study
Nevertheless, there is a need to investigate the role of investment banks in driving
financial inclusion in Nigeria. Indeed, EFInA researchers reported that many Nigerians lack
access to formal financial services because of some unavoidable reasons. According to the
, researchers, only 28.6 million adults in the country had access to banking services as of 2012. In
other words, most Nigerians use informal banking services, which undoubtedly hurt the
country’s economic growth and development. On the contrary, investment banks have played a
significant role in enhancing financial inclusion in the country. Precisely, the Central Bank of
Nigeria has introduced significant reforms that will help to compel various financial institutions
to support efforts of financial inclusion in the country. Overall, various scholars have conducted
studies to determine the effect of investment banking activities and how they can help to achieve
financial inclusion and the alleviation of poverty in Nigeria. For this reason, the researcher aims
to establish the role of the investment banks in driving financial inclusion in Nigeria.
1.4 Definition of Terms
Investment- An act of trading money for profit
Business- a commercial entity
Inclusivity- the act of including all people in a particular setting in a certain program and
procedure
Liquidity- a high extent of trading activity in an organization or market
Foreign direct Investment- the act of a foreign based organization controlling ownership of a
business in another country
1.5 Assumptions and Limitations
The researcher assumed that the government records about investment banking were true. On the
contrary, the researcher had a limitation in this study as he could not conduct a field study on the
subject. Indeed, the researcher relied on data from previous scholarly works. Furthermore, the
the Central Bank of Nigeria’s online database had the relevant data of up to the fiscal year 2012.
Chapter 2: Literature Review
DRIVING FINANCIAL INCLUSION IN
NIGERIA
, Abstract
Investment banks have played an integral part in the financial inclusion in Nigeria. For
this reason, various researchers have conducted studies to determine the role of the investment
banks in driving financial inclusion in Nigeria. Hence, the researcher of this study has utilized
the internet based-research method to obtain data for this study. Precisely, the researcher
analyzed the previous data from secondary sources. The researcher of this study aims to establish
the role of investment banks in driving financial inclusion in Nigeria. As a result, the researcher
developed six hypotheses for the study. The researcher accepted the alternate hypotheses for the
first two hypotheses. However, the researcher discovered that the dataset from previous scholarly
work proved the appropriateness of the other hypotheses. The test of the hypotheses helped the
researcher to derive findings and conclusions.
First, investment banks have strived to achieve financial inclusion to help strengthen the
economy in Nigeria. Second, the Nigerian government has formulated some policies to prompt
investment banks and other financial institutions to target the poor and vulnerable populations.
Third, investment banking activities has helped reform the financial system in Nigeria and made
it possible to connect with consumers from all parts of Nigeria. Fourth, investment banks have
helped to alleviate poverty and redistribute income. Fifth, the investment banks in Nigeria offer
stock market services that have helped encourage investment throughout the country. Sixth,
investment banks have supported and funded SMEs and as a result, created job opportunities and
increased the income of many families in the rural parts of Nigeria. Seventh, investment banks
have no other option but to use financial inclusion strategies as a tool of survival in the
competitive environment. Finally, investment bankers will undoubtedly encounter some
opportunities and challenges in the future. Overall, the researcher has formulated several
,recommendations that will help to ensure that investment banks play a significant role in the
achievement of financial inclusion in Nigeria.
Chapter 1: Introduction
1.1 Background
Investment banks have played an integral part in the world economy over the years.
Precisely, investment banks help firms to find investors for corporate bonds. Professionals in this
field examine financial statements in an organization and later advice the firm on the best
approach of putting securities on sale.
1.2 Statement of the Problem
An investment bank serves as an intermediary between investors and organizations
through initial public offerings (IPOs). For this reason, larger corporations in the world often
involve more than one investment bank in their IPOs. The modern revival of investment banking
started when the Central Bank of Nigeria’s governor issued a N25 billion capital directive in
2005 (Onu, 2013). The initiative helped most investment banks to instigate lucrative Merge and
Acquisition transactions. The government of Nigeria has since listed at least 178 investment
institutions publicly in the country. On the contrary, the Corporate Affairs Commission (CAC)
has registered at least 2.3 million investment firms that conduct financial operations in the
country (World Bank, 2016).
1.3 Purpose of the Study
Nevertheless, there is a need to investigate the role of investment banks in driving
financial inclusion in Nigeria. Indeed, EFInA researchers reported that many Nigerians lack
access to formal financial services because of some unavoidable reasons. According to the
, researchers, only 28.6 million adults in the country had access to banking services as of 2012. In
other words, most Nigerians use informal banking services, which undoubtedly hurt the
country’s economic growth and development. On the contrary, investment banks have played a
significant role in enhancing financial inclusion in the country. Precisely, the Central Bank of
Nigeria has introduced significant reforms that will help to compel various financial institutions
to support efforts of financial inclusion in the country. Overall, various scholars have conducted
studies to determine the effect of investment banking activities and how they can help to achieve
financial inclusion and the alleviation of poverty in Nigeria. For this reason, the researcher aims
to establish the role of the investment banks in driving financial inclusion in Nigeria.
1.4 Definition of Terms
Investment- An act of trading money for profit
Business- a commercial entity
Inclusivity- the act of including all people in a particular setting in a certain program and
procedure
Liquidity- a high extent of trading activity in an organization or market
Foreign direct Investment- the act of a foreign based organization controlling ownership of a
business in another country
1.5 Assumptions and Limitations
The researcher assumed that the government records about investment banking were true. On the
contrary, the researcher had a limitation in this study as he could not conduct a field study on the
subject. Indeed, the researcher relied on data from previous scholarly works. Furthermore, the
the Central Bank of Nigeria’s online database had the relevant data of up to the fiscal year 2012.
Chapter 2: Literature Review
