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Business Financing through the Nigerian Capital Markets a Study of Nigeria Stock Exchange
Abstract
The role of the capital market in
business financing through the capital market cannot be over emphasized.
Finance is the livewire of every business organization because the success or
otherwise of all business entities are very much depended on its capital and
how the capital is raised. Business finance could be raised by either short
term or long term financing instrument. Business finance could also be obtained
internally or through external sources. Long term financing instrument such as
equity, bonds and derivatives are the major instruments traded on the floor of
exchange. The NSE performs a number of functions which include creating
opportunities for long term borrowing, registration and or quotation of
companies’ shares for trading on the floor of the exchange, regulating the
activities of operators on the floor of the exchange, promotion of increased
participation by the public in the private sector of the economy and the
provision of appropriate machinery to facilitate further offering of stocks,
shares and other securities to the public among others. The encouragement of
the public to raise funds for business enterprises is a function worthy of
mention. Surprisingly few companies have made use of the facilities provided by
the NSE. Most Nigerian business men are either ignorant of these facilities as
a source of long term financing or are avoiding the exchange because of the
perceived long bureaucracies involved. This has been identified as one of the
major bottleneck of business enterprises who are in dare need of more and
cheaper sources of funding to grow competitively in Nigeria. To effectively
analyze the role of NSE, a discussion on its belief history and examination of
its activities provided sufficient basis for a critical analysis of its role.
From this critical analysis of the NSE, it is discovered that its role in
business financing is a function of its operational problems and the lukewarm
attitude of Nigerian entrepreneurs towards its facilities. It was suggested
against this background for the NSE to further decentralize its operations,
review its requirement of quotation, introduce more robust method of trading,
clearing, delivery and settlement of transactions in line with global best
practices, improve its legislation to reflect current realities, embark on more
awareness campaign and check inimical activities of stock brokers among others.
Chapter One
1.1 Introduction and Background of the Study
Much has been written about the Nigerian
stock exchange (NSE) regarding its operations, functions, potentials and most
especially, its role in business financing. Surprisingly few companies have
made use of the facilities provided by the stock exchange in financing their business
operations. Most Nigerian businessmen are either ignorant or reluctant to tap
the enormous potentials offered by the stock exchange in providing the most
needed investment capital. It is against this background that a comprehensive
study that will critically analyze the role of the Nigerian stock exchange with
particular reference to business financing, which forms the subject matter of
this project. For convenience, this project has been divided into five
chapters. Chapter one consists of introduction which deals with an overview of
the subject matter, other parts of this chapter include the statement of the
problem, objectives and significance of the study, its scope and limitation as
well as definition of terms and the Research methodology used. Chapter two
review the literature on business finance. Chapter three treated the history
and the role of the Nigerian stock exchange while chapter four under takes the
critical analysis of the Nigerian stock exchange. Finally chapter five deals
with the summary of the findings, conclusion and suggestions.
NB: The Complete Thesis is well written and ready to use.
