EFFECT OF COVID-19 ON THE BANKING SECTOR

EFFECT OF COVID-19 ON THE BANKING SECTOR

BACKGROUND OF STUDY

The COVID-19 outbreak is a global pandemic. It originated in December 2019 in the Chinese city of Wuhan, and has rapidly impacted to a greater extent in most parts of the world (James 2020). COVID-19 has affected and continues to affect all global areas and regions due to its highly infectious nature (Ayomide 2020).

COVID-19 popularly known as Coronaviruses (CoV-19) are a large family of viruses that causes health abnormality from the common cold to more immensed diseases such as Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV). A novel coronavirus (nCoV) is a new strain that has not been previously identified in humans. More so, it is said to be zoonotic, meaning they are transmitted between animals and people.

As a result of the deadly nature of this virus, and the need to assume responsibility, the governments of most countries were forced to undertake restrictive measures and limitations, which are necessary to contain the virus that has changed the lives of many people, organisations, and institutions (Ezeh 2020). These restrictions includes; restriction of movements, shutdown of many organizations (including personal businesses), lock-downs and more. However these restrictions had unpalatable effect in several sectors of the economy such like, small and meduim businesses, social organization and banks.

A bank is a financial institution, which deals with money and credit. It is an institution that provides a great variety of financial services. It accepts deposits from the public and mobilizes the fund to productive sectors. It also provides remittance facility to transfer money from one place to another (Simion 1998). in the view of Chiowen (2000), a bank is a financial institution licensed to receive deposits and make loans. Banks may also provide financial services such as wealth management, currency exchange, and safe deposit boxes. There are several different kinds of banks including retail banks, commercial or corporate banks, and investment banks.

Banks suffered several downturns as a good number of its services were not patronized during the Covid-19 restrictive measures. Hence this research is aimed at ascertaining how Covid-19 has affected the banking sectors in Nigeria.

1.2 STATEMENT OF PROBLEM

The outbreak of Covid-19 emanated the shutdown of individual businesses, business organizations (both national and international), academic institutions etc. Hence this scenario affected banking industries as many of its services which generates revenue were not often patronized, some of these services includes; Business Investment, Business loans, Loan for rents, School fees loans, moreso, Naira to Dollar transactions dropped and loans granted to businesses not being refunded was among the factors suffered by banks. Based on this note, this study is channeled towards examining the effect of Covid-19 outbreak on Banking sectors.

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