A money market can be simply defined as a market consisting of financial institutions and other dealers in short term money and credit who either want to lend or borrow money .As a group , these financial organization and deders facilitates the borrowing and lending of short –term money by bringing together those institutions with surplus funds which they wish to lend on a short- term basis and those wished to borrow.

The Nigeria money market could be said to love started with the commencement of commercial banking in 1894. However , due to various military factors ,the development of the money market was not possible until the establishment of the Nigeria central bank and the introduction of the money instruments . it is important to note that the money market in Nigeria is not located in any fixed or particular place or building where money is bought and sold . it is merely a term , which embraces all the institutions that handle the purchases , sales and transfer of short term money and credit instruments . The market operates by means of the telephone or personal contacts between the participants. It is only when a deal is struck that most transactions are finally concluded at the central bank were credit and debit are raised. This is the way money market developed economics also operates ( ie mainly by telephone and personal contacts ) but does not mean that the market is never a designated place.

Money market activities can be carried out at specific area, street , as in the case of well street in new York or lomba street in London . The later being almost synonymous with the London money market, is the central of bank head offices and discount houses.

The money market provides the central bank of Nigeria with a very important financial environment to implement monetary policy operating through the market , it raises or lowers bank reverse through open market purchase and sales of securities.

STATEMENT OF THE PROBLEM:

A part from performing traditional function of the money market , are of the main reasons for establishment of Nigerianzation of the credit basis . A money market was therefore necessary in the achievement of this objective by providing outlets in term of local money assets for the investment of surplus funds in the country as well as funds repatriated from abroad . it was also necessary to provide for government a source for short- term financing which among other things can release for capital expenditure some of the fund which at that time government deployed as work capital.

The study is to assess the role of the operation of the Nigeria money market in indigenising the credit base of the Nigeria economy.

OBJECTIVE OF THE STUDY:

The objective of the study is to assess the role of the Nigeria money market in indigenising the credit base of the economy by assessing particularly:

A) The availability, adequacy and defects if any of money market instruments in Nigerian money market.

B) The level of achievement of the objectives for which it was establishment

C) The effect of money market operations on the level of external borrowing by Nigeria.

D) To make appropriate recommendations for up grading the effectiveness and efficiency of the Nigerian money market in achieving its major objectives.

E) The principal suppliers to and borrowers of fund from the Nigerian money market. What factors are responsible for this?

F) How can the defective factors identified be removed or corrected?

SIGNIFICANCE OF THE STUDY

The mobilization of money is an essential and important factor developing economics like Nigerian. The money market plays a significant role in the process discharges important functions to the economy by ensuring that no loose funds lie idle and by promoting efficient allocation and utilization of the resources in the economy effective performance of these and other related functions will promote the indigenization. Of the credit base of the country ‘s economy which the one of the main reason for which the money market was established.

This study will access how effectively the role of indigenization of the credit base has been played and elicit any defects in the operation of the market, the corrections of which will assist in achieving greater heights in the objective for which the Nigerian money market was established.

SCODE AND LIMITATIONS OF THE STUDY

The study covered the major objectives for which the Nigeria money market was established with particular reference to the achievement of the policy indigenising the credit base of the Nigerian economy. The availability, adequacy and attractiveness of money market instruments were covered .A great majority of Nigerian banks both indigenous and mixed were involved in the study. Ample literature on the subjects was easily accessible.

The study was limited in the sense that it was not possible to visit various headquarters of the bank for oral interviews to supplement and expatiate the responses to the questionnaire. This was due to lack of funds and time as the headquarters are as far spread as Lagos, kaduna, uyo, illorin, owerri, port Hacourt, jos, Maiduguri Benin , kano and calabar etc .

DEFINITION OF KEY TERMS

1. INDIGENIZATION OF THE CREDIT BASE:-

Ensuring that it’s available within the country from internal sources for lending to businessmen, nascent industrialists and givernent

2. LOCAL MONETARY /ASSETS:

Such Nigerian money market instrument as treasury bill, treasury certificate, call money , commercial bill etc as opposed to foreign counterparts.

3 SHORT TERM FINANCING /LOANS:

Loans obtained or granted whose maturing period is less than 3years.

4 MOBILIZATION OF FUNDS

The process where by surplus loose and idle money circulating outside the banking system is bought within the financial system of the nation.

5 OPEN MARKET OPERATION (O.M.O)-:

The buying and selling of securities in the money and capital market by the C B N with the purpose of increasing or restrict bank lending.