The Savings-Investment Process in Nigeria: an Empirical Study of the Supply Side

"This study characterizes the major factors perceived by bankers as affecting the savings-investment process in Nigeria. In making lending decisions, the respondents tend to behave in accordance with the anticipated income theory of asset management, whether they were constrained by the realities of the Nigerian environment or not. This suggests that among Nigerian bankers professionalism is given pride of place. In addition, under changing financial control regimes, there is a shift in the importance attached to factors used in making lending decisions. In particular, there seems to be a close relationship between the rankings the respondents gave when they behaved purely as bankers and those that related to the era of liberalization. Neither do the respondents appear to be concerned by the sanctions imposed by the CBN for not meeting its stipulated credit policy guidelines. This suggests that Nigerian bankers tend to behave as profit maximizing investors irrespective of the sanctions imposed for not meeting government social responsibility objectives. The study also shows that in making portfolio management decisions the importance attached to meeting the demand deposit requirements of banks' customers was less important after liberalization, apparently because of liberalization policies such as the operation of the Nigerian Deposit Insurance Corporation. Another important finding is that productivity of investment, while a factor in making portfolio management decisions, was accorded higher priority after liberalization."