THE IMPACT OF E-DIVIDEND PAYMENT ON BANKING INDUSTRY

1

THE IMPACT OF E-DIVIDEND PAYMENT ON

BANKING INDUSTRY EQUITY HOLDERS: A STUDY OF FIN BANK PLC AND UBA PLC

BY

NWORIE, UCHECHUKWU MERCY

PG/MBA/07/46704

DEPARTMENT OF BANKING AND FINANCE FACULTY OF BUSINESS ADMINISTRATION UNIVERSITY OF NIGERIA ENUGU CAMPUS

JUNE, 2012.

TITLE PAGE

THE IMPACT OF E-DIVIDEND PAYMENT ON BANKING INDUSTRY EQUITY HOLDERS

(A STUDY OF FIN BANK PLC AND UBA PLC).

BY

2

NWORIE UCHECHUKWU MERCY

PG/MBA/07/46704

A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE

AWARD OF MASTERS IN BUSINESS ADMINISTRATION DEGREE IN BANKING AND

FINANCE

DEPARTMENT OF BANKING AND FINANCE FACULTY OF BUSINESS ADMINISTRATION UNIVERSITY OF NIGERIA ENUGU CAMPUS

JUNE, 2012.

APPROVAL PAGE

It is certified that this project work was done by Nworie,

Uchechukwu Mercy with the registration number

(2007/2008/46704) in the Department of Banking and Finance

under the supervision of Dr. J. U. J. Onwumere in the partial

fulfilment of the requirements for the award of degree of Master

3

of Business Administration in Banking and Finance (MBA), of

the University of Nigeria.

----------------------- ----------------------- Dr. J. U. J. Onwumere Dr. J. U. J. Onwumere (Supervisor) (Head of Department) --------------------------- ---------------------------- Date Date

DEDICATION

This work is dedicated to God Almighty, the reason for my

living. He is the one who made this work possible. To him be all

the Glory now and forever, Amen.

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ACKNOWLEDGEMENTS

I wish to express my special thanks to my supervisor, Dr. J.U.J.

Onwumere for his encouragement, guidance and supervision at

every state of this work.

My special thanks also go to my lecturers in the department of

management science who impacted knowledge to me

throughout my stay in school. I respect and admire Dr. Mrs

Modeme who from the grass root direct and encouraged me.

Moreover, my thanks go to my course mates in the department

of Banking and Finance. Also I will like to say big thank to my

parents Mr. and Mrs. A. Nworie and my siblings, for their

immeasurable support throughout my stay in school.

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ABSTRACT

The purpose of this study is to determine the effect of e-dividend payment on banking industry equity holders in Enugu state (a study of Fin Bank Plc and UBA Plc). Data were collected from both primary and secondary sources. The major data collection instrument is the questionnaire. The data were presented in tables as frequency distribution. In the analysis, the techniques of percentage and frequency were used. In testing the hypothesis, the Z test was applied. The following are the major finding of the study: (I) that e-dividend payment in the bank has helped in speeding up services to equity holders in the banking industry. From the findings it is clear that computer in Nigeria banks has enhanced prompt calculation and payment of e-dividend to equity holders. (II) That e-dividend payment in Nigeria banks has generally reduced the stress and problems encountered by equity holders in Nigeria banking industry. (III) From the findings it is clear that Government should provide necessary infrastructural facilities (e.g. electricity supply situation should be improved) necessary for the support of the industry and ensure healthy competition in the banking system. The researcher recommended Improvement in service delivery by the telecommunication industry in the country from its current epileptic condition. (IV) Internal Business Environment should be made favourable to the adoption and payment of e-dividend system, that is, the top management should be supportive and receptive to new idea: business facilities should be able to support the innovation or bank should update and equip them with necessary trainings and facilities to enable them handle the challenge.

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TABLE OF CONTENTS

Cover Page - - - - - - - - i

Title Page - - - - - - - - ii

Approval Page - - - - - - - - iii

Dedication - - - - - - - - iv

Acknowledgements - - - - - - - v

Abstract - - - - - - - - - vi

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study - - - - - 1

1.2 Statement of the Study - - - - - 5

1.3 Objectives of the Study- - - - - - 6

1.4 Research Questions - - - - - - 7

1.5 Hypotheses of the Study- - - - - - 7

1.6 Scope of the Study - - - - - - 8

1.7 Significance of the Study - - - - - 9

1.8 Operational Definition of terms - - - - 10

References - - - - - - - 12

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CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1 Conceptual Framework - - - - - 10

2.2 Reasons for not Paying Dividends as at when due - 13

2.3 Problems of Unclaimed Dividend in Banking Industry

and Capital market - - - - - - 19

2.4 Reasons for Unclaimed Dividend - - - - 23

2.5 The Possibility of e-dividend Mechanism in the

Nigerian Economy - - - - - - 21

2.6 Positive Impact of e-dividend Payment - - - 27

2.7 Prospect of Introducing E-Dividend Payment to

Equity Shareholders - - - - - - 30

2.8 The Challenges Facing E-Dividend Payment - - 32

2.9 Other Issue on E-dividend in Banking Industry

and in Nigeria Capital Market - - - - 34

References - - - - - - - 39

CHAPTER THREE: RESEARCH MEDTHODLOGY

3.1 Research Design - - - - - - 40

3.2 Source of Data - - - - - - - 41

3.3 Population of the Study - - - - - 42

3.4 Sample Size and Sampling Technique - - - 42

3.5 Method of Data Collection - - - - - 43

3.6 Method of Data Presentation and Analysis - - 44

3.7 Validity of the Instrument - - - - 46

References - - - - - - - 48

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CHAPTER FOUR: ANALYSIS

4.1 Presentation and Interpretation of Data - - - 49

4.2 Test of Hypotheses - - - - - - 54

4.3 Implications of Result - - - - - - 65

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS 5.1 Summary of Findings - - - - - - 67

5.2 Conclusion - - - - - - - - 69

5.3 Recommendation - - - - - - 70

Questionnaire- - - - - - - - 73

Bibliography - - - - - - - 76

Appendix 1 - - - - - - - 78

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CHAPTER ONE INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The electronic method of payment or e-payment (e-

commerce) has taken a centre stage in economic activities of

countries of the world. In its bid to catch up with this trend in the

world, Nigeria has adopted e-commerce.

Investment in recent time, in the Nigeria capital market

and in the banking industry appears to be taking its shape,

especially when considered along the new lease of life. The

Securities and Exchange Commission (SEC) seems to be

injecting into the operation of the market and even the

recapitalization exercise that was carried out in the banking

industry.

The market before now was regarded as a place where only the

elites in the society call the shot, but it is now being used as a

variable factor in measuring the growth and development of

nation around the globe. (www.business.com 2008)

http://www.business.com/

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Operation I the Nigerian Capital market have witnessed a

lot of transformation, both in human and infrastructural

development. The Nigerian Stock Exchange (NSE) being a self

regulatory organization, in a space of time has eroded the elite

cliché associated with the market and made it all corners

affairs. Notwithstanding the Nigeria Stock Exchange goals and

objectives of ensuring that every Nigerian has bile of the

goodies in terms of returns on investment that flow from having

a stake in the market, some structured guidelines in the affairs

of the market as it relates to investors appears as if the

investors were being done a favour for approaching the market

for investment. With the recent security exchange

commission directives that all registrars of Companies in the

country should no longer hold brief for their parent company or

any organization, they have close affinity with and coupled with

the E-dividend option recently launched, investor‟s prayer of a

virile and transparent market operations may have finally come

to be. (Best stock news. www.wordpress.com). It will be

http://www.wordpress.com/

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recalling that as at September 2007, though with the alleged

connivance of registrars, a sum of N19billion unclaimed

dividend was still variously being held in the coffers of both

quoted and unquoted companies and that the money was being

ploughed back into the owner‟s account as profit.

(www.business.com 2007), attempts has been made in

the pat by SEC to float a trust fund to help manage the huge

unclaimed dividend but this was vehemently oppoed by the

investors in the market.

The Security and Exchange Commission‟s decision to launch

the e-dividend at this time in the history of the country is a move

towards attaining its vision of being among the 20 most

developed economics in the world by 2020 and it serves a

positive tonic to both local and international investors to now

have a rethink on the workability of corporate governance policy

in the country. (See e-dividend – option news of 17/03/2005).

E-dividend as an option is a means where by an

investor‟s account is credited electronically whenever a


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transaction is carried out for him/her in the market. E-payment

system is applicable to the banking industry which means

paying directly into the account of the beneficiary. Other

advantages as it is obtained in other jurisdiction where e-

dividend option and e-payment system have been adopted are

that it will enhance the capital market liquidity; shareholders will

have their money to reinvest on time; payment is being affected

immediately; it reduces delay; enhances good cooperate

governance; eradicates the era of quoted companies declaring

dividend when in the actual fact they do not have cash on

ground to pay.

According to the ministry of finance, on his open speech

says „with the introduction of the e-dividend, the commission

has further shown serious commitment in removing some

constraints in dividend payment in the areas of eliminating

unclaimed dividend. Warrants delay in depositing dividend

warrants into current or saving account, dividend warrants lost

due to change of address, incomplete address, poor and

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inefficient dispatch procedures and delay in receipt of dividend

warrants.

1.2 STATEMENT OF THE PROBLEM

Dividend which is the main stay of the Nigerian investors

on investment, prior to the discovery of Nigeria Stock Exchange

has been in jeopardy (www.business.com 2007).

Despite the concerted efforts by successive Nigerian

government that is Nigeria Stock Exchange (NSE) and Security

and Exchange Commission (SEC), the situation has not

changed much. Dividend continues to contribute les than what

it is expected of it in lifting dividend policies from its deplorable

is yet to yield the desired results.

Below are some of the problems that justify the researcher in

embarking on the impact of e-dividend payment to equity

holders of the Nigeria banking industry

The issue of unclaimed dividend is ramped.


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The issue of unclaimed dividend is also the main stay

back on investors.

An average Nigeria investor has small holding and

various needs and problems

There is also the issue of clearance on the declaration

of the said dividend.

Operations of the Nigeria Stock Exchange are confined

to well known locations, persons, companies and

therefore do not extend to wide geographical areas, all

these have resulted in problems to this sector

1.3 OBJECTIVES OF THE STUDY

The study seeks to achieve the following set objectives.

1) To evaluate the impact of E-dividend payment system to

investors or equity holders.

2) To identify constraints that militates against efficient and

effective declaration of dividend

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3) To suggest possible ways of enhancing the effective and

efficient ways of enforcing good dividend policies.

1.4 RESEARCH QUESTIONS

The study seeks to answer the following questions.

1) What are the expected impacts of electronic dividend

payment to equity holders?

2) What are the problems associated with e-dividend

payment?

3) What is the importance of electronic dividend payment to

equity holders in banking industry?

1.5 SCOPE OF THE STUDY

This study is geared towards evaluating the impact of e-

dividend payment to equity holders of Nigeria banking industry;

it is also within the scope of the study to investigate the roles of

NSE and Sec in the development of e-dividend payment. It will

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also examine the policies on the e-dividend and also view

whether it meets the prescribed minimum or not.

1.6 HYPOTHESES OF THE STUDY

(I) The impact of E-dividend to the equity holder is not

encouraging.

(II) E-dividend payment does not reduce the issue of

unclaimed dividends.

(III) E-dividend payment does not enhance the

effectiveness and efficiency of dividend payment to

equity shareholders.

1.7 SIGNIFICANCE OF THE STUDY

Research as the process of arriving at dependable

solution to problems through the planned and systematic

collection, analysis and interpretation of data, this would enable

the researcher to fish out the unknown as regards to the issue

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of the impact of e-dividend payment to equity holders of Nigeria

banking industry, and in so doing more would be known about

this particular issue.

It also serves as a source of information especially to

research students who may wish to undergo more research on

the said topic. Through this study, the researcher would be able

to arrive at dependable solution and conclusion to this problem

and make recommendation of meaningful contribution towards

the equity holders, Nigeria Stock Exchange (NSE), Security and

Exchange Commission (SEC), Banks and even to the general

public.

1.8 OPERATIONAL DEFINITION OF TERMS

Bank: - Banks are financial institutions responsible for mobbing

out excess fund

and giving it out to customers

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Capital Market: - This is a market that deals on long-term

financing.

Equity Holders: - These are the owners of a company‟s shares

or properties.

E-Dividend: - This is a means where an investor‟s account is

credited electronically whenever a transaction is carried

out for him/her in the market

Unclaimed Dividend: - This is part of the dividend that has not

been declared or claimed

Registrar: - This is a person who provides the an enabling

electronics platform to ensure that all shareholders are

able to update their bank account detail from time to time.

NSE (Nigerian Stock Exchange): - This is the Nigerian trading

floor for stock.

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SEC (Security and Exchange Commission): - This is the

body that regulates the activities of the market and ensure fair

dealing in securities and protection of investors.

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REFERENCES

ONWUMERE J. U. J. (2005), Business & Economic Research Method Don Vinton Ltd, Ikorodu Road, Lagos http://www.smartinvestorafrica.com, E-dividend Answer to Unclaimed dividend

http://www.offshore-servicesbiz/corporatetraining-tools-templates from wikipedia the free encyclopedia

http://www.offshore-servicesbiz/corporatetraining-tools-templates


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CHAPTER TWO REVIEW OF RELATED LITERATURE

2.1 CONCEPTUAL FRAMEWORK

A dividend is the distribution of profits to a company‟s

shareholders.

The primary purpose of any business is to create profit for

its owners and the dividend is the most important way the

business fulfills this mission. When a company earns a profit

some of this money is typically reinvested in the business and

called retained earnings, and some of it can be paid to its

shareholders as a dividend, paying dividend reduces the

amount of cash available to the business, but the distribution of

profit to the owners is after all, the purpose of the business.

Some companies pay “stock dividends” rather than cash

dividends, n which case shareholders receive additional stock

share.

The amount of the dividend is determined by every year at the

company‟s annual general meeting and declared as either a

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cash amount or a percentage of the company‟s profit. The

dividend is the same for all share of a given class that is

preferred shares or common stock shares, once declared a

dividend becomes a liability of the firm.

When a share is sold shortly before the dividend is to be

paid, the seller rather than the buyer is entitled to the dividend.

At the point at which the buyer is not entitled to the dividend if

the share is sold, the share is said to go ex-dividend. This is

usually two business day before the dividend is said to be paid,

pending on the rules of the stock exchange, when a share goes

ex-dividend, the price will generally fall by the amount of the

dividend.

The dividend is calculated mainly on the basis of the

company‟s un-appropriated profit and its business prospects for

the coming year. It is then proposed by the Executive Board

and the Supervisory Board to the annual general meeting. At

most companies, however, the amount of the dividend remains

the constant. This helps to reassure investors, especially during

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phases when earnings are low and sends the message that

the company is optimistic with respect to its future performance.

Some companies have dividend reinvestment plan, these

plans allow shareholders to use dividends to systematically buy

small amounts of stock often at no commission. Dividend is not

yet paid in gold certificates, although this idea has been

discussed by mining companies such as Goldcorp.

2.2 REASONS FOR NOT PAYING DIVIDEND AS AT WHEN DUE

Company Management and the board believe that it is

important for the company to take advantage of opportunities

before it, and reinvest its recent profits in order to grow, which

will ultimately benefit investors more than a dividend payout at

present.

When a dividend are paid, shareholders in many

countries, including the United States suffer from double

taxation of those dividends, the company pays income tax to

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the government when it earns any income and then when the

dividend is paid, the dividend is paid, the individual shareholder

pays income tax to the government on the dividend payment.

This is often used as justification for retaining earning or for

performing a stock buyback, in which the company buys back

stock, thereby increasing the value of the stock left outstanding.

The shareholders pay no income tax on this transaction.

The Security and Exchange Commission (SEC), the apex

regulatory body of the Nigerian Capital Market, introduced

electronic-dividend payment system which will enable

shareholders get paid within 24 hours of dividend payment as a

way of improving efficiency and enhancing investor‟s

confidence.

We believe the e-dividend payment system which is

already catching up will minimize cases of unclaimed dividend,

eliminate dividend loss in transit and enhance the ability of the

shareholder to immediate access and utilize proceeds of their

investment. The director general of the Security and Exchange

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Commission (SEC) Musa Alifaki said at the launching

ceremony. The Director General spoke through the director

Security and Investment Service department of the commission

Deisy Ekimeh, SEC had earlier this year disclosed there existed

about 14billion Naira of unclaimed dividends.

E-dividend is the payment of dividends due to

shareholders through a direct credit into a nominated bank

account rather than issuance of cheque or dividend warrant.

Some of the draw back of the old dividend payment

according to capital market operators included poor logistic

management, inadequate update of shareholders personal

data, inability of investors to maintain regular signature to

collect dividends and multiple applications during public

offering.

Financial expert at the occasion said the e-dividend

payment will eliminate existing shortcomings as it is convenient

and secure on-line means of payment of dividends.

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The new system equally has its own challenges of

reaching out to a large number of people who do not fall in the

elite bracket. To care of those in this category, the Exchange

said it would embark on translating the e-dividend information

into three main Nigerian languages.

It is the best and cheapest way of paying shareholders,

what is just for shareholders to submit their bank account

information details and dividend will be paid into it.

Paul Lawal, Managing Director Nigerian inter-bank

settlement system explained that the organization had started

setting dividend through the e- dividend system, starting with

the shareholders of Oando Nigeria Plc and Nigeria Breweries

Plc, stressing that more companies will also follow. In order to

ensure the success of the new system the commission has

issued letters to respective shareholders to meet their

implementation modalities. Issuers are to meet payment

obligation immediately after declaring of dividends at the annual

general meeting. This will help e- dividend to lift the face of

27

business and in Lagos, shareholders whose account will now

be credited 24hour after declaration of dividend will now be able

to utilize their dividends whenever they wish.

2.3 PROBLEMS OF UNCLAIMED DIVIDEND IN BANKING INDUSTRY AND CAPITAL MARKET

Unclaimed dividends means all outstanding monies

remaining on individual account six months after the payment

date of the latest declared dividend (Company and Allied Matter

Act of 1990)

The issue of unclaimed or unremitted dividends is soon to

be over with the launch, in the week of e- dividend by the

Securities and Exchange Commission. Dividend payment had

been a major headache for both companies registrars and the

investing public companies complain of not getting adequate

information from investors to facilitate dividend payment,

information such as proper postal address for individual warrant

28

postage, lack of an identifiable next of kin when the investor I

no more and others.

But investors/ companies sometimes take advantage of them

when they lack liquidity to pay dividends.

A lot of problems are associated with unclaimed dividend and

they include: -

1) Large amount of unclaimed dividend is a bad omen to

foreign investors, since one of the factors to be

considered by foreign investors before deciding on

whether or not to invest in a country is the ability to

recover dividend.

2) The continued retention of dividend by companies

distorts the true financial picture of the companies

thereby misleading investors, government and the

members of the general public.

3) Non-payment of dividends discourages investments in

the stock market and encourages investors to look out for

alternative investment such as real estate and money

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market. The effect out this is that companies often derive

their source of fund for investment.

4) The continuous existence of the unclaimed dividend

phenomenon encourages companies to exploit the

inadequacies of CAMA by declaring dividends only to

pay out a small portion mainly to institutional investors

(mostly on the majority) to their fate. Whereas, CAMA

does not allow declaration of dividend where a

company‟s profit does not translate its liquid cash, some

companies resort to borrowing to pay off their dividend to

their investors.

5) Renewal of payee signature as a requirement for lodging

dividend warrant into bank account.

6) The long-term measures was the proposal unclaimed

dividend trust fund which has just failed to sail through

the national assembly. The proposal has fix the

promulgation of a law, which mandated companies to

pool unclaimed dividend after (15) fifteen months into the

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dedicated account to be managed by the proposed

stakeholders themselves.

All that, hopefully would be in the past with the

introduction of e-dividends or electronic dividend payment

where dividend are paid directly into the investor‟s bank

account. Among other things the new system is meant to

eradicate incidences of warrant loss or theft, delay in payment

and unclaimed warrants.

Director General, Security and Exchange Commission

(SEC), Musa Al-Faki said e-dividend would reduce the

incidences of unclaimed dividends and enhance the ability of

the shareholders or their heirs to immediately access and utilize

the proceeds of their investment. This innovation will be

beneficial to investors, the companies and the Nigerian

economy as a whole.

Echeng Al-Faki, minister of state for finance, Remi

Babalola, said e-payment is pivotal to the development,

31

strengthening and deepening of the country‟s capital market,

making it more competitive for local and foreign investors.

For its success, it is essential that investors have functional ban

accounts, with the account information submitted to the

respective registrars to facilitate their dividend payments.

This is one giant step forward for the market and the economy

and it is incumbent on investors, especially to make it work.

2.4 REASONS FOR UNCLAIMED DIVIDEND

The issue of unclaimed dividend is dealt with in section

382 of the Company and Allied Matter Act 1990 and it states

“where dividends are returned to the company unclaimed, the

company shall send a lot of the names of the person entitled

with the notice of the next annual general meeting to the

member” it states further that after the expiration of three

months mentioned in sub-section (1) of this section, the

company may invest the unclaimed dividend for its own benefit

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in an investment outside the company and no interest shall

accrue the dividend against the company.

The following are reasons for unclaimed dividend in the

banking industry and Nigeria stock exchange.

Lack of awareness by some investors in the intricacies

of stock market operation.

Multiple applications by some shareholders, especially

during indigenization exercise of the federal

government. At this time there were evidences that

investors made multiple application and were unable to

reproduce the various signature when it was time to

collect dividends.

Inefficiency of some registrar in the capital market.

Death without a will or (in estate) and lack of next of kin.

Change of address without prior notification to the

registrar.

Wrong or incomplete addresses of the shareholder(s)

kept by registrar.

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Inefficiency of the postal system in Nigeria

The distance between the company and the

shareholders also contributed most problem of these

unclaimed dividend issue.

Poor information communication network

2.5 THE POSSIBILITY OF E-DIVIDEND MECHANISM IN THE NIGERIAN ECONOMY

E-dividend payment started its operation fully in Nigeria

on the 28 of February 2008. it is a joint arrangement between

the Securities and Exchange Commission (SEC), the Central

Bank of Nigeria (CBN), the Central Securities Clearing System

(CSCS)etc

The shareholders would henceforth have to supply their

stock brokers with information regarding the bank account in

which they wish to receive and pay individual or make such

information available to the relevant companies registrars

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where shareholders does not have a stock broking from

managed securities account.

Akifki: (2008) advised the registrars to insist on full cash

banking from company for all dividends declared before they

are posted into shareholders account.

The era of piecemeal according to loan is over as he advised

shareholders to immediately report cases of late payment of

dividends into their banks account to Security and Exchange

Commission (SEC).

The ministry of finance has also ask SEC to publish the

list of registrars for each publicly quoted company to enable the

investing public commence the process of updating their

records and that shareholders as well as issuing house must

ensure that all subscription and all bank account information

are closely monitored by the commission.

To show that it will work out in Nigeria Capital Market, the

ministry of finance has advised all corporate institution to make

35

E-dividend payment a corporate public to instill confidence and

enhance accountability and transparency in the system.

2.6 POSITIVE IMPACT OF E-DIVIDEND PAYMENT

The minister for finance Mr. Remi Babalola who et the ball

rolling at the inauguration of the electronic dividend in Abuja,

recently said that e-dividend platform, would bring about the

transparency required in the payment of dividends in the

operation of the market.

He emphasized that payment of dividend is an important

element in the growth of an economy. This launch is therefore

expected to make an era of drastic dividend in Nigeria, which

stood at N19billion as at the end of 2007. This confidence

booster is paramount for the development, strengthening and

depending of the Nigeria Capital Market, making it more

competitive for both domestic and foreign investors. It is

important that we all continue to work harmoniously to achieve

this task.

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Laying credence to the e-dividend as an option, the

director general of SEC Mr. Musa Al-Faki said that in the past,

various measures were proposed towards reduction or total

elimination of the increasing incidence of unclaimed dividend

menace, but all these measures failed. At a time, there was a

mandatory publication of all the list of investors whose

dividends has remained unclaimed in the annual report of the

quoted companies as well as bill recommending the setting up

of an unclaimed dividends trust fund (UDTF).

The UDTF was expected to administer unclaimed dividend by

going extra mile to look for the owners.

Al-faki, also mentioned that evidence abounds on how

some companies use this unclaimed dividend to manipulate

their result adding that these prompted the commission to set

up UDTF, but that unfortunately, the bill for the setting up of the

fund was rejected by the national assembly. “it is in the light of

this back ground among others that SEC finds it difficult in

introducing e-dividend”.

37

Babalola said that, with the introduction of e-dividend, the

commission has further shown some serious commitment in the

removal of constraints in dividend payment, such areas

includes the elimination of unclaimed warrants, delay in

depositing dividend warrants into current or savings accounts,

dividend warrant lost due to changing of address, incomplete

address, poor and inefficient dispatch procedures and the delay

encountered in the receipt of dividend warrants.

The Chairman, Senate Committee on Capital Market,

Senator Ganiyu Solomon described the e-dividend option as an

innovation by SEC o arrive at eradicating the long wait in

accessing share dividend by investors. He said the investors

marinade would further be boosted considering the fact that

with e- dividend, shareholders can access their dividend in the

market out of which they can plough back whenever the case

arises.

38

To make this option work effectively, shareholders must

all have bank account and update same with their respective

registrars.

Babalola explained that the registrars must provide an enabling

electronic platform to ensure that all shareholders are able to

update their bank account details from time to time.

2.7 PROSPECT OF INTRODUCNG E-DIVIDEND PAYMENT TO EQUITY SHAREHOLDERS

Electronic dividend, which is IT driven is newly introduced

as a method of dividend payment which started working fully in

Nigeria banking industry on 28th February 2008. The prospects

of the introduction are as follows: -

I. It will enhance the development of the Nigeria banking

industry and capital market, E- dividend will help the

growth and development of capital market through

ensuring a good standard of dividend payment.

39

II. It enhances fast payment of E- dividend; E- dividend

encourages fast payment of dividends to shareholder

which also help the economic development of Nigeria.

III. It enhances globalization, E- dividend and Nigeria capital

Market to grow globally through it‟s electronically method

of payment.

IV. It helps to build reputation of Nigeria capital market and

create more confidence for further economic activities I

the banking industry.

V. It brings innovation in the Nigerian banking industry and

capital market; since E- dividend is newly established

arrangement in the banking industry, these would bring

changes which will improve the standard of the

shareholders.

VI. E-dividend payment will help in the protection of fraud in

the Nigeria capital market and in banking industry, the

payment is made to the appropriate owners hence there

is no more diversion of fund.

40

VII. The introduction of e- dividend payment to the Nigeria

capital market and banking industry will also help to

ensure efficiency in the industry.

VIII. It will boost the confidence of the investors through the

information and technology involved, the investors have

the confidence that they cannot be cheated in their

business and financial commitment.

2.8 THE CHALLENGES FACING E-DIVIDEND PAYMENT

A lot of challenges are facing the operation of E-dividend

payment in Nigeria, some of these challenges include: -

I. Fraud: - This is a situation where an individual use any

fraudulent means or device to obtain benefits, fraud may

occur during the process of trying to manipulate the

electronics used in the payment of dividend. But it is

properly monitored, it can eliminate fraud.

II. Poor Management: - Another challenge facing E-dividend

payment is poor management, if the management of the

41

e- dividend payment is such that are inexperienced, it

would affect the development of the e- dividend payment.

III. Challenge in Government: - This is another challenges

facing e- dividend payment in the banking industry and in

the capital market, because hence there is a change in

government, the new government may not buy the idea of

e- dividend payment and this might hinder the

development of e-dividend payment in the industry.

IV. Security of the E-Dividend Payment- If there is no security

in the e-dividend payment; these would affect the

efficiency and effectiveness of its operation. It should also

be prevented from all sources of manipulation and fraud.

V. System supervision: - this is another challenge facing e-

dividend payment option, because the system used in

paying should be checked at all times, and it must also be

monitored, if not so it would cause disaster in the banking

industry, but if properly supervised it will enhance

transparency and accountability.

42

2.9 OTHER ISSUE ON E-DIVIDEND IN BANKING INDUSTRY AND IN NIGERIA CAPITAL MARKET

The Nigeria Inter-Bank Settlement System (NBSS) which

facilitates the processing of the dividend payment has assured

that everything had been put in place to ensure a smooth and

efficient payment system.

The managing director of NBSS Plc Mr. Paul Lawal said

that following the company‟s appreciation of the importance of

e- dividend payment, that it has help to secure the hardware,

software and telecommunication infrastructure to ensure safe

and efficient electronic payment of dividend in Nigeria.

Lawal added that “NBSS, the bankers committee payment

company has been involved in safe and secure electronic inter-

bank payment since 1994. The installed security on NBSS as

well as additional initiatives agreed by stakeholders as

approved by SEC will eliminate all case of fraud and diversion

in the administration of dividend in Nigeria”.

43

However, shareholders of various groups who were also

present at the launching made their contribution. Sir Sonny

Nwosu, National coordinator of the Independent Shareholders

Association of Nigeria (ISAN) commended SEC and urged the

commission to create awareness for shareholders to go and

claim their dividend and also go extra mile in publishing the list

of registrars attached to the company where to go.

Dr. Farouk Umar, another shareholder was of the opinion

that the returned money as a result of over subscription of initial

public offer should be returned to investors through this means.

Explaining further he said that these means would hasten the

process of returning the money to shareholders and allow them

make use of their money on time instead of being tied down

unnecessarily. On the dividend trust fund bill, he said that the

need for it has been over ridden by the invention of e-dividend.

“There I no need for this again to be represented as it will only

mean that there will still be unclaimed dividend”.

44

He also urged registrars to restructure, on how to

accommodate the new member of investors compared to what

they had then, when there was no much awareness.

Also, on the uniqueness of the e-dividend which involves

investors having either saving or current account, he said that

95% of those in the northern part of the country do not have

bank account and greater percentage of them can neither read

nor write. This is also part of the reason SEC should make it

mandatory for anyone that wants to invest in shares to first of

all open a bank account.

Timothy Adesiyan, on the other hand who represented

another group formally led by Akintunde Asalu said that NSE

should not wait for December 31, 2008 deadline dematerializing

certificates but rather to allow investors post it to the CSCS,

citing an instance why this move should be considered, he said

that during share reconstruction of some companies on the

Nigeria stock Exchange they never asked them to submit their

certificates and yet the reconstruction was done effectively.

45

Commenting on this development, a cross section of

stock brokers who spoke who spoke with Nigerian Tribune on

the matter commended SEC for their noble option and said it

would reduce incidence of unclaimed dividend if actually the

policy is implemented, they said the only area they are worried

about is the area of awareness.

The stoke brokers also emphasized the need, that the

commission should create awareness for the people, that these

would make the system work better and at least put an end to

the issue of stale dividend and pains of revalidating of dividend

warrants.

While giving codes to the SEC initiative Mr. George

Okafor, Managing Director of Ideal Security Limited said that if

the options adopted that it would better because it allows the

dividends to go straight into ones account even as it allows for

easy cash flow management. He also said that everybody is

interested in reducing man hour, noting that anything that would

make people to save time is a welcome development and we

46

are all working forward to a day where most things will be

electronically done.

For the managing director of PIPC Securities, Mr.

Audytacus, said that there is no way you would want to embark

on e-dividend option without individual investors having

accounts, adding that we are not going to wait for people who

are laying back. “We should all be looking forward to growth

and development. Everybody should embrace modernism; we

need to migrate from issues that tend to hold we down and a lot

of these things of course are challenges but we cannot afford to

be held down by people who are still lacking behind, all things

being equal if you re going to participate in the banking industry

you must embrace the element of modernism.

47

REFERENCES

Okafor O. F (1990), Investment Analysis and Management New York MC-Grand.

Ugwuanyi W. N (2002), The Nigerian Financial System Agada Lagos (2nd Edition).

Ogunleye G. A. (2002), The Regulatory Imperative of Implementing the Universal Banking in Nigeria

NDIC Quarterly Vol II No 172

Ezra S. (1997), An Introduction to Financial Management California, Good Year Publication Company.

Soludo C. C. (2004), Consolidating the Nigeria Financial Industry to Meet the Development of the 21st Century, (An Address to the Special Meeting of Bankers Committee Held on July 6th 2004).

CBN Headquarter Abuja

http://www.nigeriabusinessinfo.com; The Nigeria Stock Exchange, Security and Exchange Commission.

http://www.nigeriabusinessinfo.com; The Nigeria Stock Exchange – Profit of 10 Reputable Stock Broking Firms in Nigerian Economy.

http://www.nigeriabusinessinfo.com/


48

CHAPTER THREE RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

A good project design is a sin-qua-non to any attempt

towards a project study on the impact of e-dividend payment on

banking industry equity holders.

Due to the nature of this research topic, the researcher

adopted a historical research method. A historical research

method, according to Orji (1996) deals with the determination,

evaluation and explanation of past events essentially for the

purpose of gaining a better and clear understanding of the

present and making more reliable prediction of the future.

The researcher will use primary and secondary data to

analyse the impact of e-dividend payment on banking industry

equity holders, because of the nature of this project work, Likert

Scaling Statistical Model will be use in the analysis of the

questionnaires and in testing of the hypothesis, Z test

statistical model will be used.

49

3.2 SOURCE OF DATA

The data for this research work will be sourced from area

or places in which fact can be drawn. The data for this work

were collected from FinBank Nig. Plc and United Bank for

Africa Plc. Though the sources are grouped into two; primary

and secondary sources.

Primary Source; The primary data were collected through oral

interviews and questionnaires distributed to the above banks

and parastatals. This primary source covers both the question

and the hypothesis.

Secondary Source; Though the result of any research is highly

dependent on its primary sources which has been gathered

from the structured interview, but the secondary sources is also

require to understand the concept definition, theories and

empirical result. We have used several books, research

literature, articles, journals and thesis as secondary sources for

our study, internet source were also used as a secondary

sources for the research work.

50

3.3 POPULATION OF THE STUDY

Population is the set of all units under study. For this

research work, the population is drawn from two banks such as

FinBank Plc and United Bank for Africa Plc, in all, the

population of the study is two thousand one hundred (2100).

The population of staff for the purpose of this research

work is mostly senior staff that has knowledge or an idea on

how the banks deals with equity, also departmental heads were

selected because of their experience and knowledge about the

subject matter.

3.4 SAMPLE SIZE AND SAMPLING TECHNIQUE

In determining the sample size, the researcher deemed it

wise that population of the study should be subjected to a

theoretical model so that the selection will not be biased. After

due consideration, the researcher decided to use Taro Termini

theoretical model which is;

51

n = N 1 + N (e)2

Where n = desired sample size

N = population targeted

e = Acceptance error margin (5%)

Applying the above formular

n = 330 1 + 330(0.05)2

n = 330 1 + 330(0.0025)

n = 330 1 + 0.825 n = 330 1.825

S = 180.82

3.5 METHOD OF DATA COLLECTION

The researcher used a well organized and structured

questionnaire as an instrument for this research work. The

questionnaire was developed based on the researcher‟s

52

knowledge of the researched topic and the results of the survey

conducted on sited with some official.

In both, open-ended question were used, this is to enable the

respondents express their views freely where it was deemed

necessary. Out of which 336 questionnaires were distributed,

330 copies were completed and returned.

3.6 METHOD OF DATA PRESENTATION AND ANALYSIS

The researcher used some basic statistic techniques for

data presentation and analysis. This includes Likert Scaling

Model which is used to analyze questions outside the test of

hypothesis and Z test model would be used in testing the

hypothesis formulated.

3.6.1 LIKERT SCALING MODEL

A part from the test of hypothesis; the evaluations of

responses were ranked using 5 – points Likert Scale, which

include,

53

INTERPRETATION OF THE USED

WORD

POINT

Strongly Agree SA 5

Agree A 4

Strongly Disagree SD 3

Disagree D 2

Undecided UD 1

NOTE: Any factor that is below 3.0 were regarded as

negative while factors with the mean score of 3.0 or

above were regarded as positive

3.6.2 Z TEST MODEL

The Z test model will be used in testing only the

hypothesis formulated in chapter one of this research work. The

Z test model is;

Z = X1 – X2

S21 + S22 n1 + n2

54

Where; X1 = means of sample I

X2 = means of sample II

S1 = variance of sample I

S2 = variance of sample II

n1 = sample size for sample I

n2 = sample size for sample II

Level of significance used = 5%

Decision rule: Accept Ho if the Z calculated is < the critical value

+ -1.96, but reject Ho if the Z calculated is > the critical value of

Z test of + -1.96

3.7 VALIDITY OF THE INSTRUMENT

The instrument used for this research is highly valid and

not biased because the questionnaire was structured in such a

manner that would enable the researcher to obtain relevant

information for the research work.

Tenet (1994:94) define validity as degree to which a test

measure, validity connotes a degree, to which an instrument of

55

measurement actually achieve the objective intended to

achieve.

An instrument is valid to the extent it is tailored to achieve

the research objectives

56

REFERENCES

Iwuji, U.B.C. (cd) (2001); Research Methods in Education and Social Science. Joe Mankpa, Publishers, Owerri.

Onyekwere Okpara et al (2005); Research for Academic Purposes. Enugu,, SI Demak Publishers Ltd Enugu.

Onwumere J. U. J. (2005); Business & Economic Research Method; Don Vinton Ltd Ikorodu Road‟ Lagos.

Udo, O. Godfrey (2004), A guild to Modern Research Methods. Enugu, Institute of Developmental Studies, University of Nigeria Enugu Campus

http://enafrik.com; Article 13860

http://enafrik.com/

57

CHAPTER FOUR ANALYSIS

4.1 PRESENTATION AND INTERPRETATION OF DATA

In the course of this research, the researcher

administered questionnaire to staff of the selected banks. To

ensue and compare investigation on this topic, the data

collected are presented in a tabular form.

In all, three hundred and thirty six (336) of the

questionnaires were distributed and administered but three

hundred and thirty (330) were completed and returned

representing 98% of the total copy.

4.1.1 COMPUTATION OF PERCENTAGES RETURNED AND UNRETURNED

Percentage Returned:

Let Percentage Returned = L

Where 336 Copies = 100%

330 Copies = L

58

L = 330 X 100 336 1

L = 98% = Percentage Returned

Where Unreturned Percentage

100% - 98% = 2%

2% = Unreturned

4.1.2 DATA ANALYSIS

This part presents the result of the study first, the sample

opinion of all the senior staff of these selected banks to really

confirm the impact of e-dividend payment to equity

shareholders. The questionnaire was well structured to suit the

relevance of the study and was analyzed and presented in

percentages.

59

DISTRIBUTION SHOWING THE RATE OF RESPONSE OF THE RESPONDENTS

QUESTIONNAIRE NUMBER OF RESPONDENTS %

Returned 330 98%

Unreturned 6 2%

Total 336 100%

Source: Field Survey, 2011

Response ratio = 98:2

On the above Table, it appears that out of 336 questionnaires

issued, 330 of the respondent returned their own, which

represents 98% from interpretation.

4.1.3 ANALYSIS OF RESPONSES FROM QUESTIONNAIRE

The following results below were obtained.

Question 1: Do you think that e-dividend payment will

encourage investors to invest more in the

economy?

60

Table 4.1

RESPONSE NO. OF RESPONDENT PERCENTAGE OF RESPONDENT

Agree 80 24

Strongly Agree 224 68

Disagree 26 8

Strongly Disagree 0 0

Total 330 100

Source: Analysis of sample returned 2011(See Q1)

From the response, it will be observed that greater

number of people strongly agree that e-dividend payment

will encourage investors to invest more in the economy.

Question 2: Do you think that there are some constraints

attached to the effective implementation of e-

dividend payment

61

Table 4.2


Yes 264 80

No 60 20

Total 330 100

Source: Analysis of sample returned 2011

From the response, it will be observed that 80%

responded positively that there are some constraints attached

to the effective implementation of e-dividend payment, while

20% responded negatively to the question.

Question 3: Do you think that e-dividend payment is the best

way to reduce unclaimed dividend in our economy?

62

Table 4.3


Agree 66 20

Strongly Agree 198 60

Disagree 33 10

Strongly Disagree 33 10

Total 330 100

Source: Analysis of sample returned 2011

The response from the table above shows that 60% of the

respondents strongly agree that e-dividend payment is the best

way to reduce unclaimed dividend in our economy.

4.2 TEST OF HYPOTHESIS

STATEMENT OF HYPOTHESIS I

Ho: The impact of e-dividend payment to equity holders is not

encouraging.

H1: The impact of e-dividend payment to equity holders is

encouraging.

63

THE RESPONSE

ALTERNATIVE

RESPONSE

FREQ. Ho H1

% %

SA 26 8% 132 40%

A 53 16% 79 24%

SD 132 40% 53 16%

D 93 28% 46 14%

UD 26 8% 20 6%

TOTAL 330 100% 330 100%


COMPUTING MEANS AND VARIANCE OF Ho

X ƒ ƒx X2 X2ƒ

1 26 26 1 26

2 93 186 4 372

3 132 396 9 1188

4 53 212 16 848

5 26 130 25 650

Total 330 950 55 3084

64

Mean X = X = ∑ƒx ∑ƒ

X = 950 = 2.88 330

Variance S21 = ∑X2ƒ - (∑ƒX)2

∑ƒ ∑ƒ

= 3084 - (950)2 330 330

= 9.35 - 8.29

S21 = 1.06

COMPUTING MEAN AND VARIANCE FOR H1

X ƒ ƒx X2 X2ƒ

1 20 20 1 20

2 46 92 4 184

3 53 159 9 477

4 79 316 16 1264

5 132 660 25 3300

Total 330 1247 55 5245

65

Mean X2 = X1 = ∑ƒx ∑ƒ

X = 1247 = 3.78 330


∑ƒ ∑ƒ

= 5245 - (1247)2 330 330

15.9 - 14.28

S21 = 1.62

Z = X - X2 S2

1 + S22

n1 n2

Z = 2.88 - 3.78 1.06 + 1.62 330 330

Z = - 0.9 2.68

330

66

Z = -0.9 0.00812121

Z = -9.99

DECISION RULE: The Z test calculated value (-9.99) is greater

than the Z test critical value (+ -1.96), Ho is

rejected, while H1 is accepted, we therefore

conclude that the impact of e-dividend to

equity holders is encouraging.

STATEMENT OF HYPOTHESIS II

Ho: E-dividend payment does not reduce the issue of

unclaimed dividend.

H1: E-dividend payment reduces the issue of unclaimed

dividend.

67

THE RESPONSES

ALTERNATIVE RESPONSE

FREQ. Ho H1

% %

SA 26 8% 152 46%

A 46 14% 79 24%

SD 132 40% 66 20%

D 86 26% 20 6%

UD 40 12% 13 4%

TOTAL 330 100% 330 100% Source: Field Survey, 2011

COMPUTING THE MEANS AND VARIANCE FOR HO

X ƒ ƒx X2 X2ƒ

1 40 40 1 40

2 86 172 4 344

3 132 396 9 1188

4 46 184 16 736

5 26 130 25 650

Total 330 922 55 2958

Means X2 = ∑ƒX ∑ƒ

= 922 = 2.8 330


∑ƒ ∑ƒ

= 2958 - (922)2 330 330

68

= 9 - 7.81

= 1.19

COMPUTING THE MEANS AND VARIANCE FOR H1

X ƒ ƒx X2 X2ƒ

1 13 13 1 13

2 20 40 4 80

3 66 198 9 594

4 79 316 16 1264

5 152 760 25 3800

Total 330 1327 55 5751


= 1327 = 4.02 330


∑ƒ ∑ƒ

= 5751 - (1327)2 330 330

= 17.42 - 16.1604

= 1.26

69

Z = X - X2 S2

1 + S22

n1 n1 Z = 2.8 - 4.02 1.19 + 1.26 330 330

Z = - 1.22 2.45

330

Z = - 1.22 0.0074242424 = -1.22 = -14.16 0.086

Decision Rule: The Z test calculated (-14.16) is greater than

the Z test critical (+ -1.96), which implies that

e-dividend payment really reduces the issue

of unclaimed dividend.

70

STATEMENT OF HYPOTHESIS III

Ho: - E-dividend payment does not enhance the effectiveness of

dividend payment to equity shareholders.

H1:-E-dividend payment enhances the effectiveness of dividend

payment to equity shareholders.

THE RESPONSES

ALTERNATIVE

RESPONSE

FREQ. Ho H1

% %

SA 26 8% 132 40%

A 53 16% 79 24%

SD 132 40% 46 14%

D 93 28% 53 16%

UD 26 8% 20 6%

TOTAL 330 100% 330 100%


COMPUTING THE MEANS AND VARIANCE FOR HO

X ƒ ƒx X2 X2ƒ

1 26 26 1 36

2 132 264 4 528

3 93 279 9 837

4 26 104 16 416

5 53 265 25 1325

Total 330 938 55 3142

71


= 938 = 2.84 330


∑ƒ ∑ƒ

= 3142 - (938)2 330 330

S21 = 9.52 - 8.08

= 1.44

COMPUTING THE MEANS AND VARIANCE FOR H1

X ƒ ƒx X2 X2ƒ

1 20 20 1 20

2 46 92 4 184

3 53 159 9 477

4 79 316 16 1264

5 132 660 25 3300

Total 330 1247 55 5245


= 1247 = 3.78 330

72


∑ƒ ∑ƒ

= 5245 - (1247)2 330 330

= 15.9 - 14.28

S21 = 1.62

Z = X - X2 S2

1 + S22

n1 n1 Z = 2.84 - 3.78 1.44 + 1.62 330 330

Z = - 0.94 3.06

330

Z = - 0.94 0.00927273 = -9.76

73

Decision Rule: Since Z test calculated value (-9.76) is greater

than the Z test critical value (+ -1.96), Ho is

rejected, while H1 is accepted we therefore

concludes that e-dividend payment enhances

the effectiveness and efficiency of dividend

payment to equity shareholders.

4.3 IMPLICATION OF RESULT

These findings are based largely on the information

gotten from the research questionnaires administered to

employees in the Nigeria banking industry. The following are

the major implications of the study:

(1) That e-dividend payment affects equity holders in the

Nigeria banking industry positively.

(2) That e-dividend payment in the bank has helped in

speeding up services to equity holders in the banking industry.

74

(3) That the use of computer in Nigeria banks has enhanced

prompt calculation and payment of e-dividend to equity holders.

(4) That e-dividend payment in Nigeria banks has generally

reduced the stress and problems encountered by equity holders

in Nigeria banking industry.

(5) Also e-dividend payment to equity holders has been

encouraging

(6) E-dividend payment has reduced the issue of unclaimed

dividend

(7) With the introduction of E-dividend payment, Nigeria

equity holders earn dividends accordingly

(8) E-dividend payment encourages investors to invest more in

the economy

75

CHAPTER FIVE SUMMARY OF FINDINGS, CONCLUSION AND

RECOMMENDATIONS

5.1 SUMMARY OF FINDINGS

The main purpose of this research study was to examine

the impact of e-dividend payment in the banking industry equity

holders, especially in Finback Plc and UBA Plc, if possible

proffer solutions as to how to enhance the effectiveness of

dividend payment to equity holders.

The findings emanating from this study are as follows;

I. The research survey revealed that inadequate trained

personnel handle e-dividend payment.

II. The researcher also observed that lack of pre-installation

planning, as computers installed in some banks have been

found inadequate to facilitate e-dividend payment

automatically.

III. The study further revealed that most banks fail to extend

computer services to their e-dividend unit; they only

76

computerize their receiving units and conventional payment

units.

IV. Also it was revealed that frequent breakdown of

transmitting area network program, online and offline

problems and subsequent system failure is highly

occasioned by epileptic power supply.

V. From the study it was revealed that slow processing

speeds of most bank computers are not encouraging.

VI. Finally, the frequent inability to dispense cash, frequent out

of service and the inability to send instant sms of the

automated teller machine on credit alert posses a serious

problem to the equity holders breakdown of the automated

teller machines and its inability to dispense cash.

Based on the above findings, the researcher can then

proceed to make hi conclusion.

77

5.2 CONCLUSION

The study shows that three sets of factors can impact on

the payment of e-dividend to equity holders in the banking

industry.

The first comprises of external factors – regulatory

pressure (SEC), market pressure, supporting industries, and

government support.

The second consists of organizational factors – Top

management support, organizational competence and IT

capacity.

While the last set comprises technology factors –

perceived benefits, perceived compatibility and perceived

simplicity.

All these factors will positively or negatively influence the

payment of e-dividend method among Nigerian banks.

This study is an attempt to identify the factors that

determine the impact of e-dividend payment in Nigeria banks.

78

The objective of the study was to understand the factors that

could impact e-dividend payment to equity holders in the

Nigeria banking industry, using Finbank Nigeria Plc and UBA

Nigeria Plc as a case study.

5.3 RECOMMENDATIONS

Based on the findings of the study, the following can be

recommended in order to encourage e-dividend payment by

Nigerian banks.

1) External Business Environment: - external business

environment must be made conducive to the adoption of

e-dividend system by banks. This can be achieved by

formulation and implementation of appropriate public

policies by various tiers of government. The

establishment of supporting industries should be

facilitated and encouraged.

79

2) Regulatory authorities, Security and Exchange

Commission should make to be effective and efficient in

discharging of their duties.

3) Government should provide necessary infrastructural

facilities (e.g. electricity supply situation should be

improved) necessary for the support of the industry and

ensure healthy competition in the banking system.

4) Improvement in service delivery by the telecommunication

industry in the country from its current epileptic condition.

5) Internal Business Environment should be made

favourable to the adoption and payment of e-dividend

system, that is, the top management should be supportive

and receptive to new idea: business facilities should be

able to support the innovation or bank should update and

equip them with necessary trainings and facilities to

enable them handle the challenge.

6) Increased Computer Service: it would pay banks to

subject a lot of their banking functions to computer

80

application, some of these computer services include

modern telecommunication and information technology,

which include telephone, Local area network, Computer

system, Magnetic Link Character Recognition (MLCR),

Very Small Aperture Terminal (VSAT), Electronic fund

Transfer and Wireless Radiophone. These new banking

innovations should be introduced and encouraged to

facilitate payment of e-dividend to equity holders in the

Nigeria banking industry.

However, this research work could not exhaustively

discuss all the impact of e-dividend payment to equity

holders in the Nigeria banking industry. The researcher

also suggests that further research should be carried out.

81

Questionnaire

Please tick (√) against the option chosen

SECTION A: PERSONAL DATA

1). Sex: (A) Male (B) Female

2). Age: (A) 20-29 (B) 30-39 (C) 40-49

(D) 50 & Above

3). Marital Status: (A) Single (B) Married (C) Divorce

(D) Widower

SECTION B: Basic Research Questions

4.) How long have you been in the Bank?

(A) 1-5yrs (B) 6-10yrs (C) 11-15yrs

(D) 16-20yrs (E) 20-25yrs

5.) Bank/ Branch/ Department

______________________________________________________

6.) Do you agree the introduction of E-dividend payment in the bank

has helped in speeding up

services to equity holders in the banking industry?

(A) Agree (B) Strongly Agree

(C) Disagree (D) Strongly Disagree

7.) Are their any expected impact on the use of E-dividend payment to

equity holder?

(A) Yes (B) No (C) Do Not

now

8.) The use of computer in your bank enhanced prompt calculation and

payment of E-dividend

to equity holders?

82



9.) Would you say that the use of E-dividend payment in your bank has

generally reduced

the stress and problems encountered by banking industry equity

holders?



10.) Does your bank has a department for E-dividend payment?

(A) Yes (B) No (C) Do Not Know

11.) Has the impact of E-dividend payment to equity holders been

encouraging?



12.) Is there any problem associated with E-dividend payment to equity

holders?

(A) Yes (B) No (C) Do Not Know

13.) Do you agree that E-dividend payment has reduced the issue of

unclaimed dividend?



14.) With the introduction of E-dividend payment, do equity holders earn

dividends accordingly?



83

15.) Has E-dividend payment enhanced the effectiveness of dividend

payment to equity

shareholders?



16.) Do you think that E-dividend payment will encourage investors to

invest more in the economy?



17.) Do you think that there are some constraints attached to the effective

implementation of

E-dividend payment?



84

BIBLIOGRAPHY

Barney, J. 1991: Firm Resources and sustained competitive advantage. Journal of Management 17: 99-120.

Ezra S. (1997); An Introduction to Financial Management California, Good Year Publication Company.

Delery, J. E. and Doty, D.H. 1996: Modes and theorizing in strategic human resource management: Tests of Universalistic, Contingency and configuration performance predictions. Academic of management journal, 39 (4): 802-835.

http://www.nigeriabusinessinfo.com; The Nigeria Stock

Exchange – Profit of 10 Reputable Stock Broking Firms in Nigerian Economy.

http://www.nigeriabusinessinfo.com; The Nigeria Stock

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APPENDIX I University of Nigeria, Enugu Campus

Faculty of Business Administration Department of Banking and Finance

Enugu Sate. Dear Sir/Madam,

I am Nworie Uchechukwu Mercy a student in the University of

Nigeria, Enugu Campus. I am carrying out research work on the

effect of e-dividend payment on banking industry equity holders in

Enugu state (a study of Fin Bank Plc and UBA Plc).

The project being undertaken is purely an academic work for the

fulfillment of the Award of Masters in Business Administration (MBA)

in the faculty of Business Administration of the above-named

institution. Response to these questions will be treated in confidence

and purely for academic purpose.

Thanks.

Yours faithfully, Nworie Uchechukwu Mercy PG/MBA/07/46704

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Documents

THE IMPACT OF E-DIVIDEND PAYMENT ON BANKING INDUSTRY