This project is considered with the significance of cash management in the financial sector.

Cash management is important in the financial sector of any economy.

This research work looks into the effects of cash management in the financial institution.

In this research work, primary and secondary data were utilized while chi – square was used to analysed the data collected.

It was found out that management of banking operation have not be able to formulate profit cash requirement.

The conclusion is that financial institution in Nigeria have liquidity and capitalization problems, the liquidity problems cover both cash shortage and occasion surplus cash.

It is my hope that this research will help the bank financial institution on how to run effective and efficient cash management system.




Title                                                                                               Pages






Table of Contents

CHAPTER ONE:        

1.1     Background to the Study

1.2     State of the Problem

1.3     Objectives of the Study

1.4     Significance of the Study

1.5     Research Questions/ Hypotheses

1.5.1. Research Questions

1.5.2  Research Hypothesis

1.6     Research Methodology

1.7    Scope and limitations of the study

1.8     Definition of Terms

1.9     Organization of the Study


  •    Literature Review

2.1     Historical Background of Ecobank International Plc

2.2     Conceptual Explanations

2.2.1  Cash Management

  • Cash Planning
  • Managing the Cash Flow
  • Optimum Cash Balance 17
  • Investing idle Cash 17

2.3     Demand for Money or Cash

2.3.1  Factors that Affect the Demand for Money

2.3.2  Reason for Holding Cash

2.4     Cash Management Service Generally Offered

2.4.1  Account Reconcilement Service

2.4.2  Advance Web Services

2.4.3  Armored Car Services

2.4.4  Automated Clearing House

2.4.5  Balancing Reporting Service

2.4.6  Lockbox Retail Services

2.4.7  Lockbox – Positive Pay

2.4.8  Positive Pay

2.4.9  Sweep Accounts

2.4.10         Wire Transfer

2.4.11         Controlled Disbursement

2.5     Ecobank International Plc. Cash Management

2.5.1  Account Management

2.5.2  Payable Management

2.5.3  Receivable Management

2.5.4  Liquidity Management

2.6     Problem of Cash Management

2.6.1  Cash Flow Problem

2.6.2  Inflation

2.6.3  Growth

2.6.4  Change in Interest Rates

2.6.5  Level of Cash Reserves

2.7     Method of Solving Cash Flow Problems

2.7.1. Cash Budgeting

2.7.2  Working Capital the Control of Cash

2.8.    Source of Finance

2.9     Over Capitalization


3.0     Research Methodology

3.1     Research Focus

3.2     Research Instrument

3.3     Restatement of Research Question/Hypothesis

3.4     Population and Sampling of the Study

3.5     Sources of Data Collection

3.5.1  Primary Data

3.5.2  Secondary Data

3..6    Description of Questionnaire

3.7     Method of Data Analysis and Description of Tools of Analysis.


4.0     Data Analysis, Interpretation and Discussion of Findings

4.1     Interpretation of Items

4.2     Analysis of Data

4.3     Analysis of Table

4.3.1  Table 1: Department of the Staff

4.3.2  Table 2: Working Experience of the Respondents

4.3.3  Table 3: Academic Qualification

4.4     Test of Hypothesis


  • Summary, Conclusion, Recommendation and Suggestion for

Further Studies

  • Summary
  • Conclusion
  • Recommendations
  • Suggestion for Further Studies


Appendix A:




Cash is essential and very important for the operation of any business. It is needed to carry out normal day to day activities of a business. It also the ultimate output expected to be realized in exchange for services rendered to customers.

Cash is the money which a firm can disburse immensely without any restriction. Doing business takes cash and profitability produces cash. As business grows much cash is required to keep the business on a going concern. Money is required at the right time and in right amount.

This forms the basis part of cash management system that will be discussed in this project.

Cash management is significant in financial sector of Nigeria Economy because cash constitute the smallest portion of the total current asset yet managements considerable time is devoted in managing it.

Cash management is concerned with managing of:

  1. Cash flows in and out of the financial institutions.
  2. Cash balanced held by an organization at a point in time by financial deficit or investing surplus cash.

Cash management is a broad term that refers to collation, concentration and disbursement of cash. It encompasses a company’s level of liquidity, its management of cash balances and its shorten investment strategies. Efficient cash management means more than just preventing bankruptcy. It improves the profitability and reduces the risk to which the firms exposed Brokinton (1987)

Cash management assumed more important than other current asset because cash is more significant and the least productive asset than an organization hold. It is significant because it is used to pay firms obligations. However cash is unproductive unlike fixed assets or inventories, it does not produce goods for sales.

Bruker (1961), explained that the management of cash is important because it is difficult to predict cash flows accurately, particularly the inflows and there is no perfect confidence between the inflows and outflow of cash. During some periods, cash outflows will exceed cash inflows because of payment of Trades, Dividends or seasonal inventory built up. At other times, cash inflows and outflows will be more than cash payment because there are may be a large cash sales and debtors may be realized in large sums promptly.

Cash management system will depend on the services rendered, organizational structure of the financial institution concerned, competitions, culture, government polices and options available. The task is complex and decision taken can affect important areas of banking operations.

The Nigeria financial institution is mad up Banking and non-Bank financial institutions that plays the intermediary role between the ultimate savers and borrowers. The Bank financial institution is made up of CBN Central Bank of Nigeria, commercial Bank merchant Bank, peoples Bank and Development Banks. The Nigeria financial sector also comprises of the regulatory and supervisory authorities of the Bank and non-bank financial institution. The Apex of the body is Central Bank of Nigeria CBN. Oloyede (2000)

The aim of cash management is to maintain adequate controls over cash position to keep a company sufficiently liquid and to use excess cash in some profitable way.

This study will research into how significant cash management is to financial institutions (Commercial Bank especially in Ecobank International plc.

Commercial Banking business in Nigeria is progressively expanding its scope of operation. Its goal is to satisfy the ever increasing needs of the Nigerian populace with the development of different innovative products tailored at giving the customers real value for money.


The need to examine the significance of effective cash management cannot be over emphasized in that, it is most important of all current asset of a business probably because of its special features thus, this research work will look into effects of effective cash management in Ecobank International Plc.

The research problems are:

  1. Lack of adequate controls over debtors in Bank financial institutions.
  2. Cash shortage and surplus in Bank Financial Institution
  • Lack of necessary information for proper cash management for banking operation.
  1. Problem of holding and management of cash in Bank Financial Institution
  2. In adequacy of capital for managing banking operations.
  3. Potential managers have not been able to formulate the proper cash management system for their Bank Operations.

The major objectives is to look into the significance or cash management in the financial sector in Nigeria economy. Other objectives are to:

  • find out and importance of cash management in financial sector of Nigerian economy.
  • look into the roles of financial house in the present economy in Nigeria and their contribution toward it.
  • ascertain whether the present system of cash management in the bank financial institution will be different for running bank operation.
  • find out the constraints and possible problems that financial institution may face in its attempt to raise funds.
  • look into the reason for holding cash. Why individuals and bank hold cash.
  • highlight the demand for cash or money recommendation based on the findings for improvement. It will also suggest the introduction of new system where possible


Cash management in any organization is very continuous and essential. Cash is needed in order to carryout the normal day-to-day activities of bank operations. This cash should always be made sufficiently available. Thus, it is important to look into the significance of effective cash management because;

There are experience investors who will like to make right decisions pertaining cash management  in banks.

The financial managers and accountant of business can also gain from this project work to help them in attaining a sound cash position for their bank

Undergraduate, student of Accounting will no doubt become familiar with cash management after going through this research work.

Financial analysis will no doubt gain from this research work also.






What are the importance of effective cash management in financial sector of the Nigerian economy?

What are the criteria used by financial institutions in selecting cash management system?

What can be done to avert cash shortage and surplus, can it cause loss of profit?

Does effective cash management have any significance in financial institution?

What are the controls that can be establish over cash, that is movement of cash inflows and outflows within the banking industry in Nigeria economy?



Ho:     Effective case management does not have significant in financial


Hi:     Effective cash management have significance in financial institutions


Ho:     It is not possible to establish cash management control in banking industries.

Hi:     It is possible to establish cash management control in banking industries


Ho:     Cash shortage and surplus cannot cause loss of profit

Hi :    Cash shortage and surplus can cause loss of profit


This study aimed at the significance of effective cash management in the financial sector of Nigeria economy using Ecobank International plc as the case study.

The research focus of this study will be centered on Ecobank International plc, it is a financial institution that carries out activities in financial nature.

The population is centered on the financial controller questionnaires will be given to staffs at the middle level about {10} ten of them.


For this project, the resource sample size or sample will be based on Ecobank International plc, Ado-Ekiti. The procedure is that questionnaires consist of standardized and structured questions would be used as research instrument in measuring the variables or the data from the sample.

The data collection instrument will also be  base on questionnaires that will be used to collect information from the population .Data will also be gathered from journals, Ecobank Yearly magazines, annual reports and newspapers.



This research work is based on financial institution{commercial Bank} in the Nigeria economy. The study will emphasis on the source of cash for effective operations in commercial Banks and problem encountered in the process or looking for financial means. This enables the researcher to be able to appraise the causes of financial problems facing Banks in Nigeria and suggested solution to them.


This scope of this study is limited by the following factors;

Time-The need to complete the study with in the academic session which is in itself was circumscribed by some environmental factor has compelled the researcher to limit the sample to just a number of Nigeria notable financial institution around.

Finance-Even with the used of just a bank as a case study,  researcher have to struggle to make both ends means; expansion of the scope then not possible without adequate findings.


Cash: Money which a firm can disburse immediately without any restriction. It includes coin, currency and cheque held by organizations and balances in its account. Sometimes near cash items such as marketable securities or bank time deposits  also included in cash. Generally, when a firm has excess cash it invest it in marketable securities

Bank  :The bill of exchange Act of 1882 in U.K described “a bank to include a body of persons whether incorporated or not, who carries on the business of banking: Luce 1985. The 1969 Banking Act and the Banking{Amendment}Decree 3 of 1970 defined  banking business as: The Business of receiving money from outside sources as deposits irrespective of the payment of interest, and the grading of money loans and acceptance of credits or the purchase of bills  and cheques or the purchase of sale of securities for the account of other or the incurring of the obligation acquire claims in respect of loans.

Customers:  These are individual or person which the bank transact business with. The business transaction may be inform of goods or services.

Financial Institution: financial institution comprises of Bank financial institutions and non-Bank financial institutions.

Bank Financial Institutions: Consist of deposit taking institution whose claim can readily be spent as money and directly influence the supply of money in the system through money creation. Example of Bank financial

institution are :commercial Banks, specialized Banks and merchant Banks.

Non Bank Financial Institution: Are  similar to these bank financial institution in many respect with the exception that their liabilities are not spend able. That is, cannot be used as money and cannot directly increase the supply of credit through money creation. Examples are :Development bank, mortgage bank, financial house, insurance company, money and capital market etc

Fund: These are money or sum of money provided for a special purpose.

 Disburse: These are money pay out from a fund.

Dividend: A sum of money pays out to a company shareholders out of its profits. It can also be referred to as shareholder benefits.

Organization: These are organized group of people with a particular purpose, objective and vision. e.g. a business

Management: These are group of people with an organization who are primarily concerned with the management of the activities of that organization.

Going Concern: The assumption is that the business unit will operate in perpetuity that is the business is not expected to be liquidated in the foreseeable future. A business is considered a going concern if it is capable of caring a reasonable net income and there is no intention or treat from any source to curtail significantly its lines of business in the foreseeable future

Fixed Asset: These are asset whose useful economic life exceeds one year. e.g. furniture and motor vehicles.

Current Asset: These are asset whose economic useful life does not exceed one year. They exit only for a short time before they are transferred into another type of assets.

Assets: These are resource owned and used by a business organization for the purpose of generating income. An asset yield future economy benefit to the business.


To achieve the pre – determine objectives, the study is divided into five chapter.

Chapter one cover generally the introduction aspect of the study. Chapter two focus on the review of relevant literature .Chapter three addresses the methodology framework of the study which spells out the source of data, estimation techniques model specialization, evaluation method. Chapter four is concerned with the presentation and interpretation of data and chapter five deals with summary, policy recommendations and conclusions




You may like these posts

Post a Comment