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Capital Market In Nigeria Essay

1194 Words5 Pages

Chapter one
INTRODUCTION
Background of the study
The capital market is a network of financial institutions and infrastructure that help to mobilize and allocate long-term funds in the economy. The market affords business firms and governments the opportunity to sell stocks and bonds, to raise long-term funds from the savings of other economic agents. The capital market is a highly specific and organized financial market and in fact an essential agent of economic growth because of its ability to facilitate and mobilize saving and investment. Securities were first floated in Nigeria early as 1946, even though there was no orderly and organized capital market with all the attendant institution until the establishment of the Central Bank …show more content…

The business sector has depended mainly on short-term financing such as overdrafts to finance even long-term capital. Based on the maturity matching concept, such financing is risky. All such firms need to raise an proper mix of short- and long-term capital (Demirguc-Kunt& Levine 1996). The Nigeria economy has been seriously affected with a lot of socio-economic and political dissatisfaction to economic growth. Capital market serves as veritable channels to mobilize both domestic and foreign savings for the developmental purpose. But in spite of the fact achieved by the Nigeria capital market in the area of capital formation over the years, individuals, corporate bodies and government were yet to take full benefit of opportunities in the markets, because they experience lack of recovery fund. Most recent studies on the Nigeria capital market have recognized the fabulous performance, the market have achieved in recent times. Nevertheless, the vital role of the capital market in economic growth and development has not been empirically investigated properly, in this manner creating a research gap in this area. This study is undertaken to observe the contribution of the Nigerian capital market in the Nigerian economic growth and

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