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IMPROVING ORGANIZATIONS PROFITABILITY THROUGH EFFECTIVE ADVERTISING

IMPROVING ORGANIZATIONS PROFITABILITY THROUGH EFFECTIVE ADVERTISING.

(A SURVEY OF  SOME SELECTED HOTELS  IN ENUGU URBAN)

 

 

ABSTRACT

        This research work is a survey on the effectiveness of Advertising in the maximization  of organizational profit with survey of some selected hotels businesses in Enugu Urban.

Among the objectives of this study is to find out whether the advertisement on hotel services and  products actually lead to  profit increase.  This problem is necessary in view of the fact that some people do believe that hotel could go on  with their businesses with or without advertising .

Respondents were randomly selected from Enugu metropolis and the data they provided were analyzed with simple percentage and the chi- square statistics techniques.  The results obtained indicated that effective Advertising is a necessary stimulant of profit maximization in Hotel business.

It also shows that the awareness level of hotel advertising by the public is abysmally  low.

The study was able  to show that televisions remains the most potent medium of hotel advertising, closely following by Radio.

Finally, the results of the findings were analyzed with some recommendations proffered.  The conclusion was also drawn based on the result of the findings.

TABLE OF CONTENTS

CHAPTER ONE: BACK GROUND OF THE STUDY      1

1.1        INTRODUCTION                                         1

1.2        STATEMENT  OF PROBLEM                          5

1.3        OBJECTIVES OF STUDY                               7

1.4        RESEARCH QUESTIONS                               7

1.5        HYPOTHESIS FORMULATION                               8

1.6        SIGNIFICANCE OF STUDY                            9

1.7        SCOPE OF THE STUDY                                        9

CHAPTER TWO

REVIEW OF LITERATURE                                     11

RESEARCH  DESIGN &METHODOLOGY

SOURCES OF DATA                                             23

SAMPLE SIZE                                                     25

SAMPLE SELECTION TECHNIQUES                                27

DATA ANALYSIS TECHNIQUES                              29

LIMITATIONS  OF STUDY

CHAPTER FOUR

DATA PRESENTATION & ANALYSIS                       30

QUESTIONNAIRE DISTRIBUTION & COLLECTION   30

CHAPTER FIVE : SUMMARY, DISCUSSION, RECOMMENDATION & CONCLUSION                                                        49

APPENDIX                                                         50

REFERENCES                                                     54

BIBLIOGRAPHY                                                   57

 

                                     CHAPTER ONE

BACK GROUND OF STUDY

INTRODUCTION:

Prior to the era of industrial revolution, the pattern and method of salesmanship was both crude and cumbersome chiefly because the gap between the productive and consumption sectors of society was small and manageable.  However, with the present complication and sophistication among both the producers and consumers occasion by high level economic and technological developments, businesses are now reshaping, refocusing repositioning and redirecting their operations and marketing strategies in order to face the obvious challenges posed by modern day marketing.

Every business concern has a major objective for which it  was established but whatever may be the goal, the overriding force undoubtedly remains profit  maximization.

To accomplish the afforested, these businesses make conscious efforts of finding out what their customers want,  providing them, creating  the needed awareness on the availability of these goods and services  and offering them  at the right place, time and cost.  It is by so doing that such a business can assuredly claim greater percentage of the market share and at the center  of the these activities is the pivot, the stimulant , the propeller, the sole of business called advertising.

Advertising as one of the strongest promotional tool remains a strong force in the hands of business entities.  A popular saying has it that if you do not blow your trumpet, nobody is going to do that for only when you say, “here I am “, that people will actually know where you are.  Advertising does this  and more for organization especially the hotel business. It creates especially awareness, packages, the product, services etc and presents it to the intended consumer and assists him in making the right choices.

The following definitions and opinions by some authorities and schools of thought on the meaning and roles of  advertising will perhaps give more insight into the concept.

According to Stanton W.H

Advertising consists of all the activities in presenting to a group  of non-personal oral, or visual openly  sponsored message regularly regarding a product, services or idea.

Jones (1955:14) sees it this way:

Advertising was probably coined in England in the early  days of the print to turn  the attention of voters

The American Marketing  Association (AMA) defies it as:

A paid form of non-personal presentation and promotion of ideas and services by an identified sponsor. The Advertising Age (1932) (an Ad magazine) has a summary of the  views of some professionals

In the field thus:

Advertising is the printed, written, spoken or pictured representation of a person, product service or movement, openly sponsored by the advertiser and at his expense, for the purpose of influencing sales, use, vote or endorsement.

Finally Starch (1966:2) Succinctly defines as the paid form of mass communication designed to influence people to farvour   a product in order  to induce them to buy it.

From the foregoing definitions and views  we begin to see that advertising has the following more purpose for business, especially the hotel entities.

1)     To create  awareness  on the availability of a  product, user, vote, person, idea etc

2)     To  educate the target user on the constituents of what  is being advertised.

3)     To offer other services such as how to use the products, where to get  it, what  the cost is etc.

4)     To induces sale

5)     Ultimately, to increase and maximize  profit thereby  enhancing the revenue base of the business- hotel.  These (above) are only a tip of the  Ice –berg  on what advertising is capable of doing for hotel business.

 

STATEMENT OF PROBLEM

Hotel business market  their goods and services to both internal and external publics in order to reap profit for future  survival   and growth of the business.  Advertising as one of the variables of the marketing communication mix helps in actualizing not only marketing objectives  but  also the overall corporate objectives of the  organization.

It is however  sad to note that some hotels especially in Enugu urban hardly utilize or  avail themselves of the unique services offered by modern advertising .  in some cases,  it is hard to identify the location of these hotels, what  they offer, their modus operandi and  the likes.   To such (these hotels), the minimal revenue acuring  to the business is enough.  Therefore , to involve advertising is  to  in cure  unnecessary cost.  They ignorantly consider  advertising a cohessal waste of time and resources.  This indeed is a sad commentary!

The unavoidable consequence are:-

v These hotels remain perpetually hidden and unknown

v They end up  operating below their  capacities

v Business yields continually decrease over the year.

v Some end up paying the supreme  sacrifice of untimely demise and …………………………

It is therefore the  intention of this study to critically review the likely benefits hotel business will make in terms of profit maximization by availing themselves and using the  communication.

 

 

 

OBJECTIVES OF STUDY

The prime  objective of this study is to find out  the effectiveness of advertising  in profit  maximization  of hotel business in Enugu metropolis.

Additionally, the study will also aim at the following:

To determine the general impact of advertising  on consumers.

To determine the extent  of  consumer awareness of hotel advertising

To identify what consumer patronage of these hotels are as a result of advertising.

To make recommendations in line with our observations.

RESEARCH QUESTIONS

 

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THE ROLE OF RADIO IN DEMOCRATIC SOCIETY

THE ROLE OF RADIO IN DEMOCRATIC SOCIETY (A CASE STUDY OF ENUGU NORTH LOCAL GOVERNMENT AREA)

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ABSTRACT

After the nation has been envisaged and deliberately manipulated by the military government in recent time, it seem the mass media (Radio) has lost or shaker in the role expected of it in a democratic society.

          In recent to this development, this research work is aimed at investigating, finding and re iterating what is expected of the mass media (radio) in a democratic society. Using Enugu North as a case study and concentration was narrowed down to Radio   in order to achieve maximum and accurate research findings.

          Chapter one reflects the introduction of the research work, statement of problem, historical question, significant of the study, hypothesis, definition of terms, and limitation of the study.

          Chapter two, dwelt with the review of related life  nature, while that of chapter three treated  research design and methods of research.

          Chapter five contains the recommendation and conclusion as the last chapter and it is based on research findings of the researcher as evidence that a comprehensive data collection and analysis has been done.

 

TABLE OF CONTENT

CHAPTER ONE

1.0            INTRODUCTION                                                                   1

1.1            BACKGROUND OF STUDY                             1

1.2            STATEMENT OF RESEARCH PROBLEM                 3

1.3            PURPOSE OF THE STUDY                               6

1.4            SIGNIFICANCE OF THE STUDY                     6

1.5            RESEARCH QUESTION                                    7

1.6            RESEARCH HYPOTHESIS                                8

1.7            DEFINITION OF TERMS                                   9

1.8            ASSUMPTION                                                    9

1.9            LIMITATION OF THE STUDY                          10

REFERENCES                                                              13

CHAPTER TWO

2.0            REVIEW OF RELATED LITERATURE                      14

2.1            SOURCE OF LITERATURE                               14

2.2            THE REVIEW                                                     14

2.3            SUMMARY OF LITERATURE REVIEW          25

REFERENCES                                                    27

CHAPTER THREE

3.0            RESEARCH METHODOLOGY                                   29

3.1            RESEARCH METHOD                                       29

3.2            RESEARCH DESIGN                                         30

3.3            RESEARCH SAMPLE                                        31

3.4            MEASURING INSTRUMENT                                     31

3.5            DATA COLLECTION                                         32

3.6            DATA ANALYSIS                                              32

3.7            EXPECTED RESULT                                         33

CHAPTER FOUR

4.1 DATA ANALYSIS AND RESULT                         34

4.2 TESTING OF THE HYPOTHESIS                         40

4.3            DISCUSSION OF RESULT                                50

CHAPTER FIVE

5.0            SUMMARY AND CONCLUSION                                         52

5.1            SUMMARY                                                                  52

5.2            RECOMMENDATION                                                 53

5.3            CONCLUSION                                                              54

APPENDIX                                                                             56

BIBLIOGRAPHY                                                                   62

CHAPTER ONE

INTRODUCTION

1.1            BACKGROUND OF THE STUDY

This research work is carried out in a way that will investigate and find out in a clearly defined term the “Role of Radio is a Democratic Society” in order to bring to the consciousness of the media (Radio) what is expected from it by the society.

          Over the year, the nation or society has been envisaged by the “Dictatorialism” and “Authoritarianism” of the military government over all the media of communication.

          The traditional role of the media (Radio) is the transmission of programme intended for general public reception.

          As a result of the long silence in practicing its defined role under the military dictatorship, it appear that radio broadcasting not conscious of the fact that we are no longer under the shadow military restriction and dictatorship nascent democracy. And for this, democracy to survive it has to contribute its own quota through the roles expected from it. The members of the public also expect it from radio. Some basic functions or roles which it suppose to play in uplifting the plight in the society because the president of Nigeria, Chief Olusegun Obansojo said that “Radio has a greater influence and impact on the society in terms of wider coverage and accessibility”.

          Though we have other media of communication such as the television, Newspaper, etc but amidst these, the roles and the impact of radio are most imperative and inexhaustible in our society to be précised.

          There have been previous researchers concerning the role or impact of radio in out of investigate, find, and recommend on what should be the traditional role of radio in a democratic society and how can this role be effectively carried out without any form of reluctantly and complain.

          The researchers concentrate on the inhabitants of Enugu North Local Government for an effective research work and positive result

1.2            STATEMENT OF RESEARCH PROBLEM

Radio broadcast ting is a good medium of information distribution. There are lots of things occurring around us in our local areas, in our country and the world at large. People became aware of the important events when they tune heir radio to hear the news broadly cast. Radio makes life more pleasant event while we are working or resting. The government of Nigeria, EnuguState and Enugu North Local Government Area to be precise use radio to keep both the literate and illiterate populace well informed of its policies and other important events effecting the people’s welfare. The industrialists and businessmen make use of these communication patterns to advertise their trades and promote their business, marital and naming ceremonies, missing person etc.

          Radio medium is a medium of education and it helps in the integration of divergent views, ethnic cultural and religious differences in writing and integrating the Nigeria society.

          These are few of the primary roles which radio broadcasting is supposed to perform in the society, but over the years, it has been faced with problems that have hinder it from performing up to the required expectations of the society.

          In the course of the research, the researchers were able to find out what some of these problems are:

          Firstly, poor, dilapidated equipment, which have brought about low, inefficiency and ineffective transmission and dissemination of information in the society.

          Secondly, lack of involvement of professional ism in radio transmission and dissemination of information in the understanding of the local areas.

          Utility, is poor scheduling of programmes in duty broadcasting and

          Fourthly, ethnicism in the broadcasting of information in our local society to the detriment of societal unification and integration.

The researchers also found out during the process of the research that 1 out of 3 of every home of the area has radios, that is, radio has a great impact on the people, since a housewife has radio at her side to provide her with relevant information and vital government announcement.

          The questions that might then be asked or decree are (unsolved problems for the researcher)

1)    How far has radio been able to educate and promote the interest of the people in a democratic society?

2)    How has radio been able to promote cultural, religious and ethnic integration in the society?

3)    How many have benefited from radio programmes.

4)    What has been the attitude of the people towards radio programmes.

5)    What would have happened if there were no radio in the society.

1.3            PURPOSE OF THE STUDY

The main purpose for embarking on this research work is to clearly articulate and explicate the role and imperativeness of radio in influencing (positively) the life of the masses that make-up the society.

The fourth major role of radio in any society is to educate, entertain, inform and to socialize the people. The irresistible appeal of this medium has gone a long way in drawing the attention of the message even the very worse illiterate in the society can understand the messages or information of this medium.

1.4            SIGNIFICANCE OF THE STUDY

 

ROLE OF THE MEDIA IN MOBILIZING FOR WOMEN PARTICIPATION IN POLITICS

ROLE OF THE MEDIA IN MOBILIZING FOR WOMEN   PARTICIPATION IN POLITICS (TEST CASE OF NTA CHANEL 8 ENUGU)

ABSTRACT

Women emancipation, women liberation and women empowerment, coupled with women agenda, are all as the result of the role media played in seeing to the inclusion and allowance of women to participate   fully in politics which our men see solely as men’s affairs.

The social responsibility theory of the mass media as propounded by Siebert, Petersons and Schramn (1963) provided a functional model for the analysis of media role in political evaluation which women will be part of   and maintenance of a genuine democracy.

In order to make sure that women does not participate in governance, the male counterpart reaped them of economic strength such that they will continue depending on men for financial support in whatever they are   dig, but only if the man approve of it. Because the media critics temperately, making sure that women participates in politics and governance, in order to make sure that politics is not compromise in   any form or manner, knowing that in this cause, human rights should be protected and defended, through the media which minors what the society should be or look like.

This work is an indebt study into the role of the media in mobilizing women for participation in politics. In this five chapter work, chapter one is an introduction to the work, chapter two reviews related literature o the study which I was able to lay my hands on, where d three is concerned with the research methodology while chapter   four concern itself with data analysis and result. Chapter five gives   summary of the entire work   as well as recommendation for further studies.

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

in recent time women   have been complaining of marginalization and denial of rights by successive administrations the world over and, Nigeria in particular.

The beginning federation came as a result of perceived marginalization   and alienation of women throughout the world. The 19955 framework of action inter – alia states that; despite the wide spread movement towards democralization in most countries, women are largely under – represented at most levels of government and have made little progress in achieving the target   endorsed by the economic and social council of having 30% of women in positions of decision – making   level.

This declaration has come to be the globally acknowledged assessment of the status of women in the society and what must be done in the area of   empowerment. This empowerment has come to be the major sign post signifying the struggle for and level of emancipation of women in the society through political mobilization and sensitization.

Therefore , political participation of women is an important litmus test of the quality   of any democracy. Women play a significant reproductive role   and regeneration   of society without women, there will be no nation.

The importance of women in both the pre-colonial, colonial and post colonial Nigerian cannot be over – emphasized. Nigeria women had participate life of our society prior, during and after the advent of colonialism.

Role of the media in mobilization women for participation in politics already on and is giving grounds through multiple media approach towards mobilizing and sensitizing women for participation in Nigerians politics

Although the society and government of today are increasingly and vaporously pursuing gender sensitive policies in the academic business and public services circles providing mass women education are still significant employment of women,   there are area of   women participation and empowerment.

Therefore, looking at the past history of Nigeria, one must surely observe the concerted efforts of media (NTA) had made to install and maintain a lasting but genuine democracy which will accommodate women participation.

In many countries of the world, the trend towards democratization of political regimes has been forced upon he powers that be, they must taken account of it and adopt to its demand and jave problems. Third world countries especially Nigeria, have not been left out of this global democratic evolution ( rising) coming-up and engulfing the entire world. Instance abound for references purpose where men in politics have been for their unprential refusal to embrace women participation in politics .

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THE ROLE OF APCON IN PROMOTION OF ADVERTISING IN NIGERIA

THE ROLE OF APCON IN PROMOTION OF ADVERTISING IN NIGERIA

Preface

The project work is done to set a standard for non development in the profession of Mass Communication. In communication business and practice I choose to do the research work on the Role of APCON in promotion of advertising in Nigeria which has laid a landmark in the profession.

The project work has five chapters. The first chapter is the introduction, which is the total nameplate of the project work. The second is the research reviews, which involved related facts and comments made by intellectuals in the profession.

Chapter three is all about research methodology. This is the statistical technicalities employed to present the information. Chapter four explains the data analysis and results. These are the explanation and presentation of result made from the research methodology. In chapter five is the summary and recommendations. These are the summary of the project or research work, including conclusion or recommendation made by researchers.

In all the project work is a standard for more academic Education and professional development and growth in the profession of Mass Communication.

CHAPTER ONE

INTRODUCTION

          The study in question is the role of APCON in the promotion of advertising in Nigeria. APCON stands for Advertising Practition Councils of Nigeria.

Advertising gave birth to APCON, that is, to say, advertising is the foundation of APCON.

Advertising is a versatile business practice, it operate in every sector of the economy, be it political, socio-economical, scientific, or technological. Due to the invicacies involved with the practice of advertising, a need arose to set up a body to regulate the practice.

This need for legally and lawfully established body to control. The practice of advertising resulted in the establishment of APCON.

1.1     BACKGROUND OF THE STUDY

          Advertising started with the early man when he made some inscription on his care walls. From there, advertising spread to Babylon in 300BC on clay tablet which inscribes for ointment dealers scribes and shoemakers, from there advertising also was practiced in Egypt, Rome and Greeze.

Nigeria as a case study of this work, advertising started properly as early as before the advent of newspaper, then advertising was done by town crying. Town criers were used to disseminate information about wars, disasters, marriages, births and deaths. They also announced dates for important festivals, special visits by the government officials – missing goods and rewards to anyone who could find such goods. Gongs were used as an advertising signal, it draws attention of people.

However, modern advertising started in Nigeria in 1859 when the newspaper (TWE IROHIN) was published by Rev. Henry Townsends. This newspaper advertised births, wedding, marriages, church activities, vacancies for house boy and maids, shipping schedules and social events from here, newspaper sprang up and become the first major advertising medium.

Advertising refers to the printed, written, spoken or picture representation of a person, product, service or movement openly sponsored by the advertiser and at his expense, for the purpose of influencing sales, use, votes or endorsement. This definition is found in the book “The business of Advertising” by Nnayelugo Okoro, 1995.

The above definition was propounded in 1932 by the advertising judges. In this case, advertising information is non-personal. As advertising become an interesting and profitable practice, many media sprang up, such as bill board, radio, television, pamphlet, etc. These made advertising boom in Nigeria. Therefore was great “promo war” about goods and services. This raised the alarm for a body which would control the practices and business of advertising.

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THE ROLE OF MICROFINANCE BANKS IN THE ALLEVIATION OF POVERTY IN NIGERIA.

THE ROLE OF MICROFINANCE BANKS IN THE ALLEVIATION OF POVERTY IN NIGERIA.

( A Case Study of Oha Microfinance Bank Ogui Road Branch, Enugu State)

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ABSTRACT

This study explores the immense role of the microfinance banks in the alleviation of poverty in Nigeria. The researcher revealed that the rate at which rural dwellers deposit their money in their pillows rather than in microfinance banks is high. Data were collected through primary and secondary sources. As regarded to primary sources, questionnaires and interviewed were used. The chi-square (x²) method was used for testing of hypotheses. Responses to the questionnaires were analyzed using percentage method of analysis. Based on the findings of this study, an attempt on the role of microfinancing as stimulus to poverty alleviation in Nigeria may lack adequate knowledge of various financial transactions available and how the rural dwellers can access them. In conclusion, it hoped that the recommendation will help the microfinance banks to strengthen its weakness for better and effective services in order to achieve its sets of goals and socio-economic advancement for the alleviation of poverty in Nigeria.

 

TABLE OF CONTENT

CHAPTER ONE: INTRODUCTION

 

1.1   Background of the study————————————————————–1

 

1.2   Statement of problems—————————————————————-4

 

1.3   Objectives of the study—————————————————————-6

 

1.4   Research Hypothesis——————————————————————6

 

1.5   Research questions——————————————————————–7

 

1.6   Significance of the study————————————————————–7

 

1.7   Scope of the study———————————————————————8

 

1.8   Limitations of the study————————————————————–8

 

 

 

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CHAPTER TWO: LITERATURE REVIEW

 

2.1   Overview of microfinance activities in Nigeria———————————–10

 

2.2   Justification for the establishment of microfinance institutions————-16

 

2.3   Microfinance policies and goals—————————————————19

 

  • Contributions of government in alleviation of

 

poverty through establishment of microfinance banks———————–23

 

  • The rate at which rural dwellers are not able to repay

 

their loans—————————————————————————26

 

2.6   Supervision of microfinance banks—— —————————————-28

 

2.7   Roles and responsibilities of stakeholders————————————–30

 

 

 

 

CHAPTER THREE: RESEARCH METHODOLOGY

 

3.1   Research Design———————————————————————33

 

3.2   Sources of data collection———————————————————–33

 

3.3   Methods of data collection———————————————————34

 

3.3.1  Primary data————————————————————————-34

 

3.3.2  Secondary data———————————————————————-35

 

3.4   Determination of population size————————————————-35

 

3.5   Determination of sample size—————————————————–35

 

 

 

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3.6   Sample procedures—————————————————————36

 

3.7   Method of data analysis———————————————————-37

 

3.8   Decision rule———————————————————————–38

 

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

 

4.1   Data presentation—————————————————————–39

 

4.2   Summary of responses———————————————————–39

 

4.3   Test of hypothesis—————————————————————–48

CHAPTER   FIVE:   SUMMARY   OF   FINDINGS,   CONCLUSIONS   AND

RECOMMENDATIONS

5.1   Summary of Findings————————————————————–55

 

5.2   Conclusion————————————————————————–56

 

5.3   Recommendations—————————————————————–56

 

BIBILOGRAPHY——————————————————————-58

 

APPENDIX A———————————————————————–60

 

APPENDIX B—————————————————————————61

 

 

APPENDIX C—————————————————————————63

 

 

 

 

 

 

 

 

 

 

 

 

 

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CHAPTER ONE

 

 

INTRODUCTION

 

 

1.1:  BACKGROND OF THE STUDY

 

 

A robust economic growth cannot be achieved without putting in place well focused programme to reduce poverty through empowering the people by increasing their access to factors of production.

 

The latent capacity of the poor for entrepreneurship would be significantly enhanced through the provision of microfinance services to enable them engage in economic activities and be more self-reliant, increase employment opportunities, enhance household income and create wealth. Micro-financing has existed for years before the introduction of conventional banking in Nigeria and the later part of nineteenth century. (Ekot, 2008)

 

The traditional Nigerian society has a system of group savings and assistance to one another. The practice was that a group of people who had needs for some form of capital or lump sum to execute a particular project which they could not raise adequate savings on their own, usually come together to form a savings group. The group may be named after the leader who is usually the initiator of the venture. The traditional microfinance institutions provide

 

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access to credit for the rural and urban low-income earners. These are mainly the informal self-help groups such as Isusu,women association like one obtainable during popular August meetings,

 

Umuada progressive women association. Other providers of microfinance services include savings collectors and co-operatives.

 

(CBN brief, 2005)

 

 

The unwillingness and inability of the formal financial institutions is to provide financial services to the urban and rural poor, coupled with unsustainability of government sponsored development financial schemes, contributed to the increase in number of private sector led micro finance in Nigeria. Thus, before the emergence of microfinance institutions, informal microfinance activities flourished all over the country. The Central Bank of

 

Nigeria (CBN) as at end of December 2009 gave an approval to 840 microfinance banks to begin operation in the country. (CBN briefs, 2008-2009)

 

Microfinance banking is about providing financial services to the economically active poor and low income household, who are traditionally not served by the conventional financial institutions.

 

These services include credit savings, micro-leasing, micro-insurance and payment transfers to enable them engage in income generating activities. (Asemota, 2002)

 

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However, the microfinance policy launched on 15th December 2005 defined the framework for the delivery of these financial services on a sustainable basis to the micro, small and medium enterprises (MSMES) through privately owned microfinance banks.

 

The Non-governmental Organizations or Microfinance institutions

 

(NGO-MFIS) are also expected to transform to microfinance banks. (Dinye, 2006)

 

Existing Community banks and NGO-MFIS that want to convert and transform respectively to a microfinance bank but do not have the required minimum capital base can increase the share capital by capital injection, merger and acquisition. These would not only enhance monetary stability but also expand the financial infrastructural development of the country to meet the national financial system and provide stimulus for growth and development

 

(Benson, 1985). It would also harmonize operating standards and provide a strategic platform for the evolution of microfinance institution, promote appropriate regulation, supervision and adoption of best practices. The establishment of microfinance banks has become imperative to serve the following purposes:

 

Improve, diversified and create a dependable financial service to the active poor, low-income earners in a timely and competitive manner that would enable them to undertake and develop long-

 

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term, sustainable entrepreneurial activities, mobilize savings for intermediation, create employment opportunities and increase the productivity of active poor and income earners in the country. Thus increasing their individual household income and capacity standard of living, enhance organized and systematic but focused participation of the poor in the social-economic development and resource allocation process. It will also provide veritable avenues for the administration of the micro credit programme of government and high net worth individual on non-resource basis. This policy ensures that state government shall delegate an amount of not less than 10% of their annual budgets for on-lending activities of microfinance banks in favour of their residents and render payment services such as salaries, pension for various tiers of government (Luck,2011).

1.2:  STATEMENT OF PROBLEM

Nigeria consists of different classes of individuals, who are either enterprising or industrial low class that account for over half of the population who do not have access to formal banking services. Savings have continued to grow at a very low rate particularly in the rural areas of Nigeria. One of the problems brought to bear is the inability of rural dwellers to channel their savings into banks. Most rural people keep their resources under their pillows. This method of keeping savings is risky because it might be stolen, lost