Browsing by Author "ABDURRAHEEM, ABDULAZEEZ ADEWUYI"
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Item Assessing Good Governance Practices and Development Nexus: An Application of Structural Invariance Analysis(2018-08) ABDURRAHEEM, ABDULAZEEZ ADEWUYI; OLADAPO, Ibrahim Abiodun; OMAR, Normah; AB RAHMAN, Asmak; ARSHAD, Roshayani; HAMOUDAH, Manal MohammedThe paper aims to assess good governance and development nexus based on the Theory of Maqāsid al Sharī’ah (TMS). The central hypothesis is that good governance; with a specific focus on human rights and social justice has a significant relationship with human development including factors like education, health, and income all emerging from the essentials of Sharī’ah. The paper employed a survey questionnaire to collect data from 384 respondents comprising Muslims in South-western Nigeria. The stratified random sampling technique was used. The findings showed that TMS is effective in predicting the direction of relationship between good governance and human development. The findings further showed that the model is invariant across gender groups. This paper highlights the applicability of the constructs of the TMS model into human development research. It also recommends strategic policy direction for policymakers. Keywords: Deprivation, gender invariance, well-being, Maqāsid al Sharī’ahItem ASSESSMENT OF THE FINANCIAL SOUNDNESS OF NIGERIAN BANKS: ALTMAN’S Z-SCORE AND BANKOMETER MODELS APPROACH.(DEPARTMENT OF FINANCE,UNIVERSITY OF ILORIN, NIGERIA, 2020) ABDURRAHEEM, ABDULAZEEZ ADEWUYIIn the past years, the unstable macroeconomic environment continued to exert pressure on the financial soundness of the Nigerian banking sector. The study, therefore, investigates the financial soundness of the listed Nigerian deposit money banks for the period between 2016 and 2019, to predict the susceptibility of any of the banks to potential bankruptcy. The study employs Altman's Z-Score models, a multivariate discriminant analysis (MDA) statistical tool and the Bankometer S-Score model to predict potential bankruptcy in the banking sector. The results from Altman’s Z-Score show that six out of the twelve banks, were in a grey zone while the remaining ones were in a potential bankruptcy zone. Bankometer, on the other hand, classifies all the banks except one, to be in the safety zone. The study, therefore, concludes that because Altman’s Z-Score analysis could not find any of the banks in the safety zone, in contrast to the Bankometer S-Score results, the financial soundness of the banking sector in the country could be fragile. The two methods, therefore, complement each other in evaluating the financial soundness of the banks.Item DETERMINANTS OF LENDING PORTFOLIO CONSTRUCTION AMONG NIGERIAN COMMERCIAL BANKS.(FACULTY OF MANAGEMENT SCIENCES UNIVERSITY OF ILORIN, 2014-06) ABDURRAHEEM, ABDULAZEEZ ADEWUYIEffective lending portfolio construction is one of the most complex problems which the management of financial institutions across the globe has to tackle on a continuous basis. This study investigates the determinants of commercial banks portfolio construction in Nigeria covering a period of 35 years (1977- 2012). Ordinary Least Square (OLS) technique is used to confirm the appropriate relationship between commercial banks' loans and advances (dependent variable) and lending portfolio determinants proxies by volume of commercial banks deposits, loan to deposits, liquidity ratio, lending rate, investment portfolio, inflation and cash reserve ratio. (Independent variables). From the result, the study finds that five variables are significant while commercial banks deposits have the greatest impacts on commercial bank lending construction in Nigeria. However, two of the independent variables including inflation and liquidity ratio are not significant. The study among others recommends that, the Central Bank of Nigeria (CBN) should moderate the Monetary Policy Rate (MPR), promote low lending rate, favourable cash reserves, and liquidity of the banks, so as to facilitate investment and price stability in the economy. This is expected to promote credit expansion and invariably returns, and profitability of the deposit money banks in Nigeria. Keywords: Lending, Deposits, Investment, Portfolio, Liquidity, SolvencyItem 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).Item THE LINEAR EFFECT OF BANK LIQUIDITY ON PROFITABILITY IN SELECTED AFRICAN ECONOMIES(FACULTY OF THE SOCIAL AND MANAGEMENT SCIENCES, OLABISI ONABANJO UNIVERSITY, AGO-IWOYE., 2018) ABDURRAHEEM, ABDULAZEEZ ADEWUYI; ETUDAIYE-MUHTAR, OYEBOLA FATIMA; BAMIGBADE, DAYO; FAGBEMI, TEMITOPE O.Given the importance attached to sound liquidity management in the banking industry, this paper investigates the effect of bank liquidity on profitability. The study employs the bankruptcy cost and risk-return hypotheses to examine the linear effect of bank liquidity on bank profit. Annual bank-specific data from commercial banks in Kenya, Nigeria, and South Africa, for the period 2000-2014, are used in the study. The two-step system generalised method of moment's technique of analysis, an instrumental variable technique that addresses issues such as endogeneity, reverse causality and auto-correlation, is used for the investigation. The results revealed a statistically significant and positive relationship between liquidity and bank profit indicating the applicability of the bankruptcy hypothesis. This implies that banks in the study benefit from reduced financial distress and funding costs thereby increasing profits. The study thus recommends that commercial banks in the selected countries hold higher levels of liquidity to mitigate the risk of failure and increase profit. Keywords: bankruptcyItem MACRO-ECONOMIC ENVORNMENT AND CREDT RIS OF ISLAMIC BANIKING IN A DUAL BANKING SYSTEM; EVIDENCE FROM MALAYSIA AND INDONESIA(INDERSCIENCE PUBLISHERS, 2019) ABDURRAHEEM, ABDULAZEEZ ADEWUYIUnderstanding the effects of the macro-economic environment's dynamics on the credit risk of Islamic banking in a dual banking system could help the Islamic banking industry. This article empirically investigates this issue based on Malaysian and Indonesian data from 2007 to 2017 by using the Dynamic Ordinary Least Squares (DOLS) cointegration modelling approach. The study finds a significant long-term relationship between the Islamic banking credit risk and macroeconomic factors such as GDP, conventional interest rates and exchange rate movements. The findings of this study will further enrich our understanding of the impact of the economic environment, particularly the movement of conventional interest rates on the operations and credit risk profile of Islamic banks in a dual banking environment. The findings of this study are expected to benefit not only Islamic bank personnel but also regulatory authorities and policymakers operating in dual banking environments.Item THE NEXUS BETWEEN RATES OF RETURN ON DEPOSITS OF ISLAMIC BANKS AND INTEREST RATES ON DEPOSITS OF CONVENTIONAL BANKS IN A DUAL BANKING SYSTEM: A CROSS COUNTRY STUDY(EJ ECONJOURNALS, 2016-08) ABDURRAHEEM, ABDULAZEEZ ADEWUYI; NAIM, Asmadi MohamedThe paper investigates the existence of a long-run relationship between conventional interest rates and rates of return on deposit of Islamic banks in the contemporary dual banking systems on a cross-country basis. The study employs ARDL (Autoregressive Distributed Lag) modeling approach to cointegration analysis. The study finds the existence of the long run relationship between rates of return on deposits of Islamic banks and interest rates on deposits of conventional banks during the period 2007 – 2015. The study also finds a bidirectional causal relationship running between rates of return on deposits of Islamic banks and conventional interest rates. The study statistically provides empirical insight into the relationship between the rate of return on deposits of Islamic banks and the conventional interest rate on a cross-country basis using an ARDL model. Keywords: Dual banking, Co-integration, ARDL, Malaysia, Indonesia, Bahrain JEL Classification: G2Item The Relationship between Audit Committee Effectiveness and Corporate Governance Practices among Nigerian Banks(Department of Management and Accounting, Faaculty of Adminiistration, Obafemi Awolowo University, Ile-Ife, Nigeria, 2014-07) ABDURRAHEEM, ABDULAZEEZ ADEWUYI; OLANIYI, TAIWO AZEEZcompanies still fail despite a clean auditor's report and this has called to question the impact of the audit committee (AC), (auditor's supervisory body) effectiveness and corporate governance practices among Nigerian banks. This objective was investigated using ten (10) selected money deposit banks using a Panel data model covering a period between 2001 and 2010 while the analysis was dichotomized into a short run and long run condition using Arellano and Bover dynamic and Fixed effect models while Hausman's test of significance was conducted to verify the significance of the independent variables. Our findings revealed that the selection process and financial literacy have negative and positive significant impacts respectively on AC; effectiveness in ensuring corporate governance practices in Nigerian banks. Also, estimates obtained from the long-run situation indicated that board size, management ownership and legal environment exert insignificant impact on AC while character and independence of AC members are unrelated to their effectiveness. It is the reform suggested that an appropriate selection process that will ensure adequate financial literacy of AC members be put in place while an environment of rule of law with compliance monitoring is recommended as tools for improving audit committee's effectiveness in enhancing corporate governance practices among Nigerian banks.Item SUB-SAHARA AFRICA'S INFRASTRUCTURE FUNDING GAP: POTENTIALS FROM SUKUK FINANCING (PROCEEDINGS OF THE 2ND UUM INTERNATIONAL ISLAMIC BUSINESS MANAGEMENT CONFERENCE 2018 - IBMC 2018(PUSAT PENGAJIAN PERNIAGAAN ISLAM UNIVERSITI UTARA MALAYSIA SINTOK, KEDAH MALAYSIA, 2018) ABDURRAHEEM, ABDULAZEEZ ADEWUYI; NAIM, Asmadi MohamedEffective lending portfolio construction is one of the most complex problems which the management of financial institutions across the globe has to tackle on a continuous basis. This study investigates the determinants of commercial banks portfolio construction in Nigeria covering a period of 35 years (1977- 2012). The Ordinary Least Square (OLS) technique is used to confirm the appropriate relationship between commercial banks' loans and advances (dependent variable) and lending portfolio determinants proxies by volume of commercial banks deposits, loan to deposits, liquidity ratio, lending rate, investment portfolio, inflation and cash reserve ratio. (independent variables). From the result, the study finds that five variables are significant while commercial banks deposits have the greatest impacts on commercial bank lending construction in Nigeria. However, two of the independent variables including inflation and liquidity ratio are not significant. The study among others recommends that, the Central Bank of Nigeria (CBN) should moderate the Monetary Policy Rate (MPR), promote low lending rate, favourable cash reserves, and liquidity of the banks, so as to facilitate investment and price stability in the economy. This is expected to promote credit expansion and invariably returns and profitability of the deposit money banks in Nigeria.Item Sub-Sahara Africa’s Infrastructure Funding Gap: Potentials from Sukuk Financing(OMJP Alpha Publishing, 2018) ABDURRAHEEM, ABDULAZEEZ ADEWUYI; NAIM, Asmadi MohamedSub-Sahara African (SSA) region as a large part of the African continent suffers huge infrastructure deficit mainly as a result of the vast funding gap. The negative impact of the infrastructure deficiency continues to constrain socio-economic development and the general well-being of the people of the region. Heavy reliance on the traditional sources of funding by many of the countries in the region has failed to meet ever-growing demands for infrastructural development of the region. Potentials presented by Islamic finance are yet to be exploited by a large number of countries in the region. This study evaluates the depth of utilisation of Islamic capital market using Sukuk instruments as another source of funding to fill the observed funding gap for infrastructure development. This study finds that the use of Sukuk as a long-term financing instrument is still at its infancy stage in the region. The paper, therefore, suggests that the SSA countries can undertake rapid and massive infrastructure developments in the region through the use of Sukuk instruments, thereby eliminating increasing sovereign debt over-hang from the conventional debt market. This study also recommends that policy makers in the region put in place required laws and regulations that will provide enabling environments for effective utilisation of Sukuk instruments for infrastructural development. Similarly, strong political will on the part of the region’s political leaders is essential in nurturing strong institutions that can engender policy continuity to ensure effective and efficient management of infrastructure projects funded by Sukuk instruments. Keywords: Sub-Sahara Africa, Infrastructure deficit, Sukuk