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Financial instability and performance of banking sector in Nigeria: an evaluation

Author

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  • Clementina Kanu
  • Anthony Chukwuma Nwali

Abstract

This study critically evaluates the financial instability and the performance of banks in Nigeria as regards to its causes and implications. This critical evaluation required the formulation of some testable hypotheses to confirm the effect of financial instability in the performance of banking sector. The results obtained confirmed that financial instability adversely affect the performance of the banking sector, has significant relationship with the level of unemployment in the banking sector; as it caused retrenchment of staff due to inability of banks to meet up with their obligations and as an the attempt to reduce operations costs. The study concludes that government as well as CBN should formulate policies that will enhance in flow of fund in the system, eliminate fraud and non-performing credits. We recommend that banks should diversify their lending activities to the agricultural sector and tourism, encourage export activities and involve in investment opportunities.

Suggested Citation

  • Clementina Kanu & Anthony Chukwuma Nwali, 2019. "Financial instability and performance of banking sector in Nigeria: an evaluation," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 6(3), pages 236-259.
    • Handle: RePEc:ids:ajaafi:v:6:y:2019:i:3:p:236-259
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