EVALUATION OF THE DYNAMIC EFFECTS OF IOLE CASH HOLDING IN A DEVELOPING ECONO0MY. A CASH STUDY OF OGBETE MAIN MARKET
With the multifarious (many / various )
increase in the economic system money become the most acceptable means of
transaction and payment of debt. The proportion of money which is not used in
normal recurring transaction or is held in excess of the normal need is called
“idle cash” The excess of the normal need is called “Idle cash” The continuos
with drawl of money from the circular flow of income between the household
individual s, firms and industries becenies so alarming and devastating; it
deprive the users the great opportunity
of making any meaningful and judicious use of idle cash.
In the area of research methodology primary
and secondary source of data collecting
will be adopted. The primary data source
includes oral interview administration on questionnaire observation and
literature review. While the secondary sources of data collection to be adopted
are the use of text books, financial standards etc.
There are some constraint towards this
project which I include money –which
is inadequate time to combine my lectures, personal chores and project research
work, protocols to be observed will surely delay this project. Inadequate
libraries and materials to lay hands on.
The researcher therefore wish to embark on
this work to remedy some of these problems and their effects on the economy.
The project work intend to highlight the pros and cons of the negative use of
idle cash , constant flow of money in circulation , light interest rate and
poor cross Domestic product (GDP) the research work will not only be in
document for the accounts department
With he heart full of joy and happiness I
wish to express my sincere gratitude and
deep appreciation to God Almighty who saw me through in the course of carrying out this research work.
My sincere appreciation goes to my project
supervisor Dava Osuagwu who guided me in all this project work. . I equally
indebted to the numerous libraries that I used in the course of work. I hereby putting on
record the courteous assistance I received from the staffs of library.
My warm and sincere gratitude goes to my
beloved darling Mr Ben Collins Nweke, My
children favour and valentine Ben –Nweke, my parents brothers and sisters my
It is impossible to mention by name all who
have contributed to this research work but the researcher would specially
mention Agwunedu Martina I. ,My head of department Mr Ani Wilson. U. and all my
Friends and well wishes To the Almighty God the research gives the glory for
any success recorded in this research work.
Ben –Nweke Ifeoma M.
TABLE OF CONTENTS
Table of contents
Background information of the study
Statement of the problem
Objective of study
Significance of the study
Scope of the study
1.6 Limitations of the study
Definitions of term
The role of money in a developing economy
Money and banks
Demand for money
Motives of demanding money
Banks functions and money creation
Limitations of money creation
Supply of money
Velocity of circulation
The concept of idle cash
Reason that led to a fall in idle cash
Effect of idle cash holding in a developing economy
RESEARCH DESIGN / METHODOLOGY
Area of study
Source of data
Data collection methods
3.4 Sample design
Method of data analysis
Method of testing hypothesis
Data presentation and Analysis
Test of hypothesis
SUMMARY OF FINDINGS RCOMMENDATION AND
Summary of findings
BACKGROUND INFORMATION OF THE SUBJECT MATTER
In a developing economy like ours, a sizeable
amount of money is held in excess of
normal need. This excess money is
held is idle, because it does not produce any income, The business communities,
individuals, household etc are holding a great proportion of this idle money.
The involvement in the evil of boarding cash has a very serious effect on the
financial institutions. The banking system ability of creating deposit money is
constrained or hampered. The banks can only create small amount of deposit
money, which is not enough to satisfy the teeming population seeking for loan.
As a result of this, the interest rate will increase proportionately. Prices
will increase while on the other hand demand will reduce increase in
unemployment rate and drastic fall in national income.
The industrial sector is also affected
because they depend on commercial and merchant banks loan for effective
production and expansion. The consequences of bank not wholly honoring loan
realest has put these industries in a light corner by producing below capacity,
low quality product and retrenchment as an available means of production cost
cut measure or to bread even
Economic growth and development of any nation
is a combination of many variable ie price, inflation deflation employment and
interest rate. This variable. Money is the prime mover of economic development
as a result of its relationship with economic activities. Increase in the
volume of money supply in the economy will definitely bring a remarkable change
in the interest rate.