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CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

A financial institution is an organized body concern with the management of money. This to say that the institution is responsible for the lending and borrowing of money. In other word, it is the institution involved in financial intermediation where money is mobilized and is channeled from the public settings. Those who have surplus fund want to invest in productive activity. Some of this institution in Nigeria is the commercial bank, stock exchange market, merchant bank, CBN, insurance market and the development banks.

Mismanagement is defined by land man English dictionary version as control with private, public, or business affaire badly or unskillfully. Mismanagement is also defined by Oxford English dictionary as mismanaged, improper administration to manage wrongly. The financial mismanagement according to the above definition may be improper administration, wrong uses of money, and inadequate collateral security of granting loan.

Misappropriation of money or management of finances unskillfully. They are good in selling of security. They are sources of revenue to the government. They help the government extremely in the internal trade. They also provide a lot of advice to the government. To the public and private individual affairs. The bank grant loan on advance and make locally or outside Nigeria. In fact they performer a variety of function to safety the financial need of all the type of costumers form small personnel account holder to the big incorporated organization. That is by accepting of deposit, safe custody agency service etc.

The industry has gone beyond the optimistic of the period of years. The number of the expanded in five funds. The variety of the bank increase and promote the growth of industrial fraud due to the craze fore material wealth, inflating of contracts, God-fattherism, poor management and other bank matinee contribute extremely to the constant report of financial management in the financial institution. Even the marketer in this institution has been complaining that hunger and starvation have killed them due to the inability of the managers to pay their salaries. This has all happen due to misappropriation of fund meant for salaries. Reporting of riot, workers unrest or strike of worker which brig a lot impact on the economy not function effectively. Something costumer in those institution accused there accountant manager of embezzling their money 1.e in  lies in cooperative and commercial bank.

In this case, mismanagement result a great effect over many sectors of life of the above mentioned such as companies, individuals, workers and the economy as a whole. The tendency to embezzle and get rich quick mentality has continued down the line. “The service act of financial institution in Nigeria” Furthermore, mismanagement in the financial institution make then unable to tackle their problems and obligation like paying of task to the government, cash reserve rate, worker salaries giving out loan etc. After the overthrown of the last civilians government in the country. Much financial institution made a lot of staggering discovery to fund misappropriation through inflated contracts, bribery and kick back etc.since then, the Nigeria economy has become a big body up till today.

Mismanagement in this financial institution has contributed to a large extent to the various draw-backs that inhibits the infrastructures growth in financial and non-available of loan and to the payment of salaries. This has also created a lot of imbalance to the government in the revenue generation. Therefore it is necessary that a research like this be carried out to fix the problems of mismanagement of bank of fund in our financial institution. In Nigeria, financial institution is one of most important institution, which is responsible fore the countries economic growth. Without financial institution like banks, stock exchange market, insurance market, etc, Nigeria and other countries will find it very difficult to transact their business together.

Financial institution performs some duties to the country state and to the individuals. Due to this service rendered by these financial institutions, banking in Nigeria has gone through a very dramatic change within these decades. Some companies wound up till today. In fact, financial analyst put public fund misuse and those smuggled outside the country at several million of Naira. Finally, the various officer mostly the manager and cashier of those institutions are accused of the abnormal. The research went into dept in finding out the true situation. Managers contributed the majority of the respondent used. Useful interview were concluded with the important officers to finally commission help to get the root of the problems. 

STATEMENT OF THE PROBLEM

In this aspect, it well known facts that adequate management in the financial institution will enable them play their role as supposes and enable them archive their goal and objective. They are unable to perform their role in selling of security paying of tack, which is source of revenue for the government, help in the international trade etc. they thereby encounter some problem, which may be stated as follows;

They are finding themselves unable to meet the costumers demand.

There is persistence lose.

They are having poor turnover.

There is lack of trust by there customers in, as much they don’t invest in there firm anymore.

Unable to abide by the set out laws especially the financial ordinance.

Costumers withdraw much from them thereby reducing their deposit liability, which constitute the main source a bank loadable fund.

THE PURPOSE OF THE STUDY

Financial institution has been identifying as the catalyst for a meaningful economic transformation of the country.  There is no doubt that financial institution is a vital institution in the economy of Nigeria. Financial institution encounters a lot of financial mismanagement lending to capacity. This area of problem that associate with the interior operation i.e. the manager, accountant, cashier etc. I strongly believed that if the course of financial management in financial institution and its effect and the set of people it affect is identify, it will give way for easy and smooth evaluation in this institutions it affects such as bank, stock exchange market, capital market.

So as to archive its objective and aim in life, it will provide machinery for medium and long-term fund are mobilized and is made available to business, government and individuals. It provides a base for capital formation and industrialization. It is in view of this that I have taking up this course of study to examine thoroughly the course of this financial mismanagement as well as its effects, the people it affect and what are the effects on them.

Significance of the course of study

The whole essence of the study of the course of mismanagement of fund in the financial institution and the possible solution as noted is to improve the accounting and transactions in the banks. We also look at bribery and corruption as the main issue that affects the financial institution. Some of the thing that is coursing mismanagement in the financial institution is;

Perfect fraud in financial institution. These are fraud of employees or the junior worker, which involves theft, misappropriation of the companies fund usually in form of cash or other asset.

God-fatherism: in the financial institution, bribery and corruption is the order of the day. Some of the financial institution are no longer employing workers base on their profession or the certificate, they now base on the issue Gog-father ism

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