The issue of inadequate capital remains one of the major challenges of business entrepreneurs in Nigeria. Business firms are constantly searching for
ways to expand their operations and deliver quality services and increase revenue, while the new ones want to start in good shape but enough funding is not readily available. Leasing has been long established as a creative financing tool for the acquisition of capital assets. Over the years, leasing has grown into an industry of imposing scope, and greater potentials are met through this unique form of
financing.
This study examines the impact of finance leasing on the performance of Nigerian banks.
The population of the study consists of twenty (20) banks that are quoted on the Nigerian stock exchange and members of ÉLAN as at 31st December, 2005. The sample of the study is five (5) banks drawn randomly from the population of the
study. The study uses linear regression as a tool of analysis to assess the impact of lease financing on profitability, investment and shareholders fund of the selected banks.
The study establishes that finance lease has no significant impact on the performance of Nigerian banks despite the relationship between them is positive. The study concludes that finance lease has no significant impact on the performance of Nigerian banks and therefore, recommends among others that Nigerian banks should increase their commitments into leasing business to improve earnings from the proceeds of leasing and be leasing buildings and office equipment instead of building and buying them at the event of expanding or opening new branch.
