MOBILIZATION AND UTILIZATION OF FUNDS IN THE FINANCIAL SYSTEM
CHAPTER ONE
INTRODUCTION
It is generally accepted among the financial expert and economist that a necessary condition for rapid economic growth and the development is rested on adequate financial planning. However, the financial system of Nigeria is still underdeveloped. This fact can be educated by the pivoted role provided by the financial institution in the economy which is principally connecting the surplus and deficit sector in the economy. Thus, banks, insurance companies providence funds and other financial houses mobilize funds, which are channeled to productive sector of the economy. In general, these mobilize funds can be transmitted to the deficit unit three principal ways these are
i. Another is through private placement in which the firm more or less dispenses with the financial market.
ii. Through financial market, which are organized where the suppliers of funds or lenders and demanders of funds or lender and demanders of funds borrowers carryout their transactions.
However, this study is about the method by commercial banks and insurance companies to mobilize funds and how the funds mobilized are utilized for the development of the economy.
Moreso, the need also arises for commercial banks and insurance companies in Nigeria to know how they have both faired in their roles as financial intermediaries.
1.1 PURPOSE OF THE STUDY
The licensing of any financial institution is to provide for the financial needs of the economy whether short, medium or long-term finances. It is pertinent therefore that the role of financial intermediaries cannot be dispensed within the development of real sectors of most significantly a capitalist oriented economy. As an economy develops, there will also be growth in the financial assets to the growth in the income, structural changes occur in the financial system itself. This positive relationship between the financial system and the real sector development is very true of a capitalist economy where the market forces of supply and demand operate freely to determine the allocation of the scarce resources in the economy. However, if the financial institution are repressed by direct control of both market force by the monetary authority.
