Browsing by Author "ABDULKADIR, RIHANAT IDOWU"
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Item ECONOMIC DOWNTURN AND CREDIT RISK: EMPIRICAL EVIDENCE FROM THE NIGERIAN BANKING SECTOR(DEPARTMENT OF ECONOMICS, UMARU MUSA YAR'ADUA UNIVERSITY, KATSINA STATE, NIGERIA, 2018-06) ABDURRAHEEM, ABDULAZEEZ ADEWUYI; ABDULKADIR, RIHANAT IDOWU; ETUDAIYE-MUHTAR, OYEBOLA FATIMAThis paper investigates the impact of the economic downturn on the credit risk of the Nigerian banking sector using quarterly data for the period 2007-2016. The study employs ARDL (Autoregressive Distributed Lag) approach to cointegration. The study also conducted a causality test using the Modified Wald (MWALD) test proposed by Toda and Yamamoto (1995) to determine the direction of causality among the variables. The results provide empirical support for the existence of a long-run relationship between the credit risk of Nigerian banks and macroeconomic variables, namely GDP growth, interest rate, inflation and foreign exchange rate. Most importantly the study finds greater causality power of interest rate, inflation and foreign exchange rate over the credit risk of Nigerian banks during the study period. The findings of the study have important implications for the impacts of the macroeconomic factors on the quality of the risk assets of the banks. One practical implication for Nigerian banks; is the integration and assessment of the potential impacts of the macroeconomic environments into the evaluation and assessment mechanism of the quality of their risk asset portfolio. Similarly, in order to mitigate another round of banking crisis and therefore a financial system instability in the country, the government and the monetary authority should, therefore, work to harmonize the government’s fiscal policies and the monetary policies with a view to reducing the interest rate, inflation and exchange rates in order to reduce the negative impacts of volatile macroeconomic environment on the risk assets of the banking sector. JEL Classification Codes: E44, E51, G01, G21. Keywords: Economic downturn, Credit risk, ARDL Bounds testingItem EFFECT OF INTEREST-FREE FINANCING OF ISLAMIC BANKING ON INFORMATION ASYMMETRY AMONG ISLAMIC BANK CUSTOMERS: EVIDENCE FRON NIGERIA(DEPARTMENTS OF ACCOUNTING AND FINANCE & BUSINESS ADMINISTRATION, FOUNTAIN UNIVERSITY, OSOGBO, NIGERIA, 2020) ABDURRAHEEM, ABDULAZEEZ ADEWUYI; ABDULKADIR, RIHANAT IDOWU; ETUDAIYE-MUHTAR, OYEBOLA FATIMAPurpose: This study investigates whether interest-free financing contract of Islamic banking provides an incentive for entrepreneurs in Nigeria, to provide full information disclosure of their business performance and thus reduce the incidence of information asymmetry in respect of financing received from Islamic banks. Design/methodology/approach: Multivariate Logistic Regression Model was employed to estimate the binary categorical variables of the model. Findings: The result shows a positive and significant relationship between the incentive of interest-free financing contract and motivation to give voluntary information disclosure, thereby minimizing the incidence of asymmetric information in respect of the funding obtained from Islamic banks. It was also found that the religious belief of the entrepreneurs does not significantly impact their decisions to have a banking relationship with Islamic banks but are rather motivated by economic factors and business decisions. Practical implications: The policymakers in Nigeria can, therefore, leverage the positive attitude of entrepreneurs towards Islamic banking interest-free financing contract to promote financial inclusion and narrow down the widening funding gap faced by small and medium enterprises thereby promoting entrepreneurship and significantly reduce the unemployment level in the country. Social implications: Access to accommodative financing of Islamic banking can improve the general welfare of the citizenry, raise the national productivity and positively impact the national income. Originality/value: This study, unlike most previous studies on Islamic banking in Nigeria which were largely focused on the value proposition of Islamic banking, examines the effects of the incentive of interest-free financing contract on the behaviour of Islamic bank customers to volunteer greater information. The study further enriches the literature on the effects of the incentive of interest-free financing as a significant determinant of the attitude of entrepreneur bank customers towards full information disclosure thereby minimizing the incidence of information asymmetry in banking relationship with Islamic banks.Item FINANCIAL FLEXIBILITY AND DIVIDEND PAYOUT: EVIDENCE FROM NIGERIAN FINANCIAL SECTOR(DEPARTMENTS OF ACCOUNTING AND FINANCE & BUSINESS ADMINISTRATION, FOUNTAIN UNIVERSITY, OSOGBO, NIGERIA, 2017) ABDULKADIR, RIHANAT IDOWU; ABDURRAHEEM, ABDULAZEEZ ADEWUYI; SIYANBOLA, AKEEM ADETUNJIThe recent decline in the average payout ratios and suspected decline in financial flexibility of firms listed in the financial service sector of the Nigerian Stock Exchange stimulates the interest to conduct this study. The study examines whether dividend payment decisions can be explained by the financial flexibility of the sampled firms. To achieve this, the study obtained data from the published financial statements of the firms. Binomial logistic regression and panel linear regression was employed to investigate how financial flexibility explains “decision to pay or not to pay” and “amount of dividends paid” respectively. Findings indicate that financial flexibility (measured by cash flow) influences firms’ decision “to pay” or “not to pay” as well as the amount of dividends paid. Findings indicate further that profitability and size are also important determinants of the amount of dividend payout. The result of the study is in line with signalling theory which indicates that payment of dividend is a signal of the financial health of the firm. In line with findings, the study concludes that dividend payout of firms in the financial service sector of the Nigerian Stock Exchange is strictly guided by their financial health. Thus, the study recommends that regulatory authorities should adopt policy measures that will enhance a firm’s financial flexibility to strengthen their ability for the attainment of the overall objective of the firm (maximization of shareholders’ wealth).