Tracing the origin of financial institution is very controversial, because opinions are divided as to whether financial institution originated from china or from England e.t.c. However, there is a general consensus that financial institution started from the activities of the Goldsmith who had facilities such as strong safes suitable for safe keeping of valuables. People who had valuables deposited them with the Goldsmiths. The Goldsmiths in turn had to perform an important function of financial institutions-accepting of deposits. At first the Goldsmiths charged the depositors some fees for performing these functions for them.
To serve as evidence for the valuables deposited, the Goldsmiths issued receipts for various weights of valuables, which include gold, and silver used as money in exchange, the merchants who deposited the valuables discovered that they could use the receipts issued to them by the Goldsmiths to carryout transaction.
These receipts therefore, became medium of exchange later. A merchant who now receives the receipt from the depositor could present the receipt to the Goldsmith and claim the valuable deposited. This also gave rise to early bankers issuing bank notes of fixed denominations that are more generally accepted. This however marks the beginning of bankers becoming issuer of bank- notes.
The piece of gold or silver deposited with the Goldsmith by Tosan is identical to that held by Omatsola and they are unable to recognize their particular piece of gold or silver, then it becomes clear that any depositors will accept the gold or silver paid by the Goldsmith. This helps the development of financial institution to a great extent.
Financial institutions are licensed as a receiver of deposits.
For centuries, financial institutions have influenced the economies and politics of Nigeria. Traditionally, financial institution originated as places where businesses could secure loans to purchase inventory and thereafter collect the funds with interest once the goods are sold.
Examples of financial institutions are,
Banks, stock brokerage firms, non banking financial institutions, building societies, asset management firms, credit unions and insurance companies.
To serve as evidence for the valuables deposited, the Goldsmiths issued receipts for various weights of valuables, which include gold, and silver used as money in exchange, the merchants who deposited the valuables discovered that they could use the receipts issued to them by the Goldsmiths to carryout transaction.
These receipts therefore, became medium of exchange later. A merchant who now receives the receipt from the depositor could present the receipt to the Goldsmith and claim the valuable deposited. This also gave rise to early bankers issuing bank notes of fixed denominations that are more generally accepted. This however marks the beginning of bankers becoming issuer of bank- notes.
The piece of gold or silver deposited with the Goldsmith by Tosan is identical to that held by Omatsola and they are unable to recognize their particular piece of gold or silver, then it becomes clear that any depositors will accept the gold or silver paid by the Goldsmith. This helps the development of financial institution to a great extent.
Financial institutions are licensed as a receiver of deposits.
For centuries, financial institutions have influenced the economies and politics of Nigeria. Traditionally, financial institution originated as places where businesses could secure loans to purchase inventory and thereafter collect the funds with interest once the goods are sold.
Examples of financial institutions are,
Banks, stock brokerage firms, non banking financial institutions, building societies, asset management firms, credit unions and insurance companies.
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