Merchant Banks And Economic Development

The language of business is money, and money is the business offinancial institutions - key participants of the financial system. The mostdeveloped segment of the Nigerian financial systeem is the banking industry.Thus, it is quite noticeable that despite the depressed economy, there hasbeen a continuous increase in the number of banks day in day out.For many years, most especially since the Structural AdjustmentProgramme (SAP) came into being, the fad-banks did more than keepingpeoples money safe. The banks turned into traders, dealers in foreign exchangeand in the process rocking millions of naira as profit.Despite SAP, the banking industry become a goldmine. Everything theydabbled turned into money. The speed and manner with which same becomeapparently profitable raised brawls and for the fact that the deeper you dig, the moreyou find. One is therefore tempted to investigte the role of merchant banks in thedevelopment of the Nigerian economy, since they are one of the vital instruments fortransforming the economy into a viable, productive and profitable one.The sudden upsurge in merchant banks should not come as a surprise with thestructure of Nigerian economy changing so rapidly, and with the pace ofindustrialization gathering breath and taking momentum there is the inevitable needfor wholesale banking; venture capital tax financing, equipment leasing, and formedium and long term financing activities that are outside the traditional domain ofcommercial banks.

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