THE IMPACT OF FINANCES LEASE ON THE PERFORMANCE OF NIGERIAN BANKS

1.1            Background to the Study

One of the most prominent issues in the corporate and financial world today is the issue of leasing (Abashiya, 2005). In the developed countries, it is almost an integral part of the overall financial system and often advocated as the least expensive and most advantageous form of funding (Afzal, 2003). As (Olusoga, 2003) indicates, the most generally accepted method of financing capital investment throughout the world is equipment lease financing option.

In Nigeria, although lease volume remains relatively insignificant in terms of world rankings, the concept is fast gaining recognition and has been influencing some major decisions in the various sectors of the economy. With the paucity of capital in the continent, many African countries such as South Africa, Zimbabwe, Ghana, Nigeria and recently Egypt have used leasing as a major anchor of their economic development policy with considerable success. In these countries, lessors are fully involved in investments in the extractives industries, transport, agriculture, construction and telecommunications (Olakunle, 2002).