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         The research was based on the topic “mobilizing Domestics savings for economic growth and development in the banking industry. (A case study of Union Bank of Nig PLC 1999 – 2000. In carrying out this research, I examined thoroughly. The various factors, which militates severely against the effective and efficient mobilization of domestic savings these factors were identified to range from the level of income earned of the saver. The interest rate that the bank pays on depots of customers, to the effect of bank distress syndrome in the banking industry.

         Efforts were geared towards recommending various measures the bank can use to improve greater mobilization of domestic resources in our bank. The various ways through which an increase in domestic savings mobilization can also effect on increase in economic growth and development were also identified. These include granting of loans and overdraft of to deficit customer, assisting in the provision of amenities to the host community generating employment and affirming of scholarship and promotional programmes. The research was accomplished through the use of questionnaires and secondary data. The testing and analysis of relevant data obtained were done through the use of chi – square statistical test techniques.














Title page                                                                   ii

Dedication                                                                  iii

Approval page                                                             iv

Acknowledgement                                                       v      

Abstract                                                                     vi

Table of Contents                                                        viii    


INTRODUCTION                                                       1      

1.1         Background of  study                                         1

1.2         Statement of Problem                                         4

1.3         Purpose / Objective of Study                               5

1.4         Research Questions                                            6

1.5          Research Hypothesis                                          7

1.6         Significance of the Study                                    9

1.7         Scope , Limitations and Delimitation                     10

1.8         Definitions of terms                                            11

Reference                                                                   13


Review of related literature                                           14

2.1         Domestic Financial Resource Mobilization

Efforts of the Nigeria Financial System                 15

2.2     Principal Sources of Savings                               17

2.3     Constraints to Effective Mobilization of

Savings for Economic Growth and Development   19

2.4         Effect of Bank Distress in Mobilization of Savings.        

2.5         Effects Of Income Earned To Savings Mobilization 25

2.6         Effect Of Interest Rate In Mobilization

Of Domestic Savings                                          29

2.7         Strategies for Improving Mobilization Or

Savings in Union Bank of Nigeria Plc                    31

Reference                                                                   37


Research Design and Methodology                                38

3.1     Research design                                                 38

3.2     Area of Study                                                    38

3.3     Population                                                         39

3.4     Sample and Sampling Techniques                         39

3.5     Instruments of data collection                              40              

3.6     Methods of Data Analysis                                    42     


Data Presentation and analysis                                      44

4.1     Data Presentation                                               44

4.2     Test of hypothesis                                              52


Findings Recommendations and conclusion                    63

5.1     Summary of Findings                                         63              

5.2     Conclusion                                                        65

5.3     Recommendation                                                66

Bibliography                                                       69

Appendix                                                                    71





         It is universally acknowledged that the banking including play a catalytic role in t he process of economic growth and development.  This acknowledgement is reinforced by contemporary conceptualism to the effect that banks are a veritable vehicle for mobilizing resources from su7plus units and tempting same to deficit unit. Banks constitute perhaps the most important segment of the financial market and played and a dominate vote in not mobilizing savings, but also allocating them for investment purposes.

         In Nigeria, domestic savings rate is relatively low compared to most other developing counties with the same for capital income level. In the past, investment rates were high and hence there was no problem for raising funds.

         Under the present economic dispensation, the companions or the drive for savings deposit has been stepped up by banks and non- bank financial institutions. It is Hoover not sufficient because the range and type of financial assets available are equally important. There is a wide range of saving instruments offered banks and non – bank financial institutions in Nigeria today.

         However, most of the voluntary and non – contractual financial savings consist of savings and time deposit. Although other types of deposit such as savings certificate, premium savings bonds play any a miner rate, banks and non – bank (Moncial Institutions are today competing strongly among them instruments including additional frame benefits  almost banks are now offering contractual forms of savings aimed at persuading depositors to invest in long term deposits.

         Another area some banks are foreseeing to mobilize funds today is the montage saving: because large number of Nigerians need accommodation of their own but fund it difficult with their meager income. Interest payment a demand deposits accounts has also some positive impact on the propensity to save. Bank have also been allowed by the government to open domaliary  account for Nigerian exporters in which proceed of experts can be paid or saved until when they are needed.  Transaction costs related to operating a new accounts and making deposits and withdrawals are now be coming relatively easier particularly for small savers. There is also the pension scheme which seeks to induce depositors to invest small sums of money over a specified period of time in the hope of receiving a stream of benefits upon reacting the age of retirement.

         Conversely the crisis of confidence in our banks is a great set bank for the banking system.  In the past the majority of those who patronized the banks did so in order to find safer place for their money. And for many years bank in the country were the character of currency store house. But because of the lack of confidence in banks today s sizeable amount of Nigerians keep their currency or cash at home and this marks of most of cash unpaired by the banks. According to withstanding et al (1996:133), this one depositors resulting to cash drains. In the broadcast sense a cash drain refers to any kind of cash loss suffered by a bank.

         This winders the financial intermediaries function of intermediation. Most of our industries depend on commercial bank assistance in form of overdraft short term and long loans for effective operation.



Income posses the greatest constraint to savings mobilization. The generally low level of income among the people in Nigeria is a limiting factor to savings mobilization. The inadequate banking facilities in the economy in general and the rural areas in particular also constitute on obstacle to wide savings mobilization.

         Growing frequency of incidences of found, insider abuses and malpractice which all combine in on unholy alliance to erode public confidence in financial institutions and do painful  damage to whatever level of banking habit has been developed.

         Another factor that may affect savings mobilization is the absence of affective a realistic interest rate policy that rewards savers with adequate return on their savings. It  is argued that in as mush as the rate of interested adjusted for inflation various negative. Savings are likely to remain low. Perhaps the greatest problem in this country is that we run a cash economy. The handers the financial intermediaries from performing their functions. The practice constrains banning systems ability to mobilize funds with the consequence that banks create small mount of  deposit in comparison to amount demanded as loan by the economy.



The aim of the study is to examine available ways of achieving greater mobilization of savings and its efficient and effective channeling for economic growth the research aims at .

  1. Recommending measures for improving greater mobilization of domestic resources in our bank.
  2. Identifying the means throughout which the mobilized funds can effectively which the channeled to the growth and development of economy.
  3. Identifying the effect of interest rate mobilization of domestic savings.                                               
  4. Identifying the effect of bank distress in deposit acquisition.

Determining the effects of income earned to savings mobilization.


(1)          Has there been an improvement measure towards achieving greater dogmatic resources in our bank?

(2)          Does the mobilization of domestic savings contribute in the economic growth of the economy?      

(3)          Does the interest rate charges on the mobilization of domestic savings positive? 

(4)          Does the bank distress syndrome have any significant effect to the deposit acquisition?

(5)          Does the propensity to save income earned have effect on the mobilized savings of the bank?



To determine the validity and volubility of the information gathered the following hypothesis were formulated.

(1)     H0:    There has been no improvement measure towards   achieving greater domestic resources in our bank

H1:    There has been improvement measures towards achieving greater domestic resources in our bank .

(2)     H0:    The mobilization of domestic saving and development of the economy.

         H1:    Mobilization of domestic savings does contribute in the growth and development of the economy. 

(3)     H0:    The interest rate has no positive effect to the mobilization of Domestic savings.

         H1:    The interest rate has a positive effect to the mobilization of domestic savings.

4.      H0:    The bank distress has no significant effect to the deposit acquisition. 

5.      H0:    There is no significant relationship between income earned of the people and the mobilization of domestic savings by the bank.      

         H1:    There is significant relationship between income earned of the people and the mobilization of domestic savings by the bank. 

         H1:    There is significant relationship between income earned of the people and the mobilization of domestic savings by the bank. 1:Hh


(Iii)    H0:    There is no significant relationship between the mobilization of domestic savings and economic development.

         H1:    There is a significant relationship between the mobilization of domestic savings and economic development.



This study intends to elicit body of knowledge and understanding of the problem of mobilizing domestic savings by banks. It is expected. That of the recommendations of this research are implemented it will help to change the banking habits of people. It will also help the managers and staff of banking industry in Nigeria to improve on their fund mobilization strategy.   

         Researchers / students, lectures and the generated public will also fund the findings and recommendations of their research of value various interest areas, especially those who may wish to carry out further study on the topic in any other relate filed.  




There study examines the mobilization of domestic savings for economic growth and development. The study covers on the need for mobilizing domestic savings, the strategies employed by banks in mobilizing these savings and the problems associated with the mobilization. It also takes a general view on the ways of improving greater mobilization of domestic resources by the bank which all in turn enhances economic growth.

         The researcher broadly examines the research topic as a whole and  then narrowed it down on the effort of the union bank of Nigeria PLC in mobilizing these domestic funds certain constraints were encounter by the researcher during this study they include :-

TIME: -       Time was a major constraint, bearing in mind that the work had to be handled done side other academic responsibilities of the researcher and coupled with the short time required to submit this work due to a very short semester. 

FINANCE  This was another factor as the researcher funds the cost of gathered and analyzing information (both primary and secondary, costs of typesetting, photocopying materials and binding and other expenses necessary for the effective completion of this  work to be too exorbitant.



SAVINGS: This is that part of income that is not consumed immediately but deferred for investment or future consumption.

DOMESTIC SAVINGS:  This consist savings from the citizens of the country and not from foreigners.

CBN:          Central Bank of Nigeria the apex financial institution in the country.

NIGERIAN BANKING INDUSTRY: This countries of the banking institutions in the country which include the commercial banks, Merchant banks, development banks etc. with the control Bank at the Apex. 

UNION BANK OF NIGERIA PLC: This is of the leading banks in the country both by deposit and assets wish 283 branches touching.

BANKER:  A banker could be send to be one who works in on institution licensed to carry on the business of banking.

DEPOSITORS:    These are bank customers who keep money  or value with the bank on contractual terms.

DISTRESS: A bank may  be classified distress when it is unable  to meet the bank examination rating system.

BOFID:      Banks  and other financial institutions Decree.

RURAL BANKING :     This involves the establishment of banks in rural areas to cultivate banking habit among the rural dovellers.       


Adewume, W. (1996)”  Mobilizing Domestic Resources for economic Development . The Role of control Bank of Nigeria and other financial Institution “ CBN Economic and Financial Review, vol 34 No 8 September P. 867.

Alab. M (1999) Mobilizing Domestic Savings for Economic growth Development fist bank .


 Sanusi (1997) Sanitizing Nigeria Banking Industry “ Daily time September 8 p . 29.