The two main problems facing commercial banks in the country of Nigeria are low investment and recession. The country is facing economic turbulence, as many countries are these days. In addition, the people of Nigeria simply don't place their money in commercial banks as much as consumers do in some other countries.
Low investment simply refers to the amount of money placed in a bank by consumers. In developing nations, a distrust of commercial banks is common. Some believe that this can be traced back to some of the very first banks in the world, which were often corrupt. People learned quickly that their money was safer at home. Despite vastly improved banking practices, these beliefs persist, and people still feel safer with their money in a home safe. Until a widespread shift occurs in the way banks are seen, this problem is unlikely to resolve itself anytime soon.
Economic turbulence is another reason for banking troubles in Nigeria. Like much of the world, the country is experiencing a downward trend in the economy. This makes people even more likely to distrust a banking institution. If the bank "goes under," people worry, what will happen to my money? For many, it's much more comfortable to keep money at home.
Keeping money at home is not the best practice. It can be stolen much more easily than it could be in a bank. Money kept at home does not earn interest, as money in a savings account can. However, for many people, these reasons are not enough to entrust their hard-earned money to a banking institution.
Well publicized accounts of the reliability and benefits of banks could serve Nigeria's banks well. If the citizens of this country began to see banks in a new light, it could cause a change in the way they use their money. However, this process can take years to produce any noticeable results.
Low investment simply refers to the amount of money placed in a bank by consumers. In developing nations, a distrust of commercial banks is common. Some believe that this can be traced back to some of the very first banks in the world, which were often corrupt. People learned quickly that their money was safer at home. Despite vastly improved banking practices, these beliefs persist, and people still feel safer with their money in a home safe. Until a widespread shift occurs in the way banks are seen, this problem is unlikely to resolve itself anytime soon.
Economic turbulence is another reason for banking troubles in Nigeria. Like much of the world, the country is experiencing a downward trend in the economy. This makes people even more likely to distrust a banking institution. If the bank "goes under," people worry, what will happen to my money? For many, it's much more comfortable to keep money at home.
Keeping money at home is not the best practice. It can be stolen much more easily than it could be in a bank. Money kept at home does not earn interest, as money in a savings account can. However, for many people, these reasons are not enough to entrust their hard-earned money to a banking institution.
Well publicized accounts of the reliability and benefits of banks could serve Nigeria's banks well. If the citizens of this country began to see banks in a new light, it could cause a change in the way they use their money. However, this process can take years to produce any noticeable results.
