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MZUMBE UNIVERSITY

BUSINESS SCHOOL

A proposal on

A comparative analysis of financial performance of commercial banks.

NAME: Jafar

CHAPTER ONE

1.0 INTRODUCTION

This chapter provides a summary on background information that leads to the research problem, research objectives, significance of the study, definition of terms, justification of the study as well as conceptual framework.

1.1 BACKGROUND INFORMATION

Bank is an important instrument to the success of the economy by bringing together the surplus spending and deficit spending unit as the means of satisfying the two, It acts as an intermediaries by transferring funds from the surplus spending unit such as households, government, and business unit.Normaly this financial system lead to the growth of the economy ( Baisi 2005)

The banking system shift funds either directly or indirectly from the savers (surplus spending unit to deficit spending unit (users)

Baisi (2005)

With direct placement, there is no financial intermediation process as the users (deficit spending unit) get funds directly from the savers. With the indirect placements, the financial markets play the role of financial intermediation whereby they act as a link between the users (deficit spending unit) and the savers (surplus spending unit). There is no direct contact between the savers and the users. The surplus spending unit places their deposits with the different financial markets which then package them and provide different credit and other financial facilities to the deficit spending unit. On getting funds the deficit spending unit pledge securities to the financial institutions. The repayment are channeled though banks. (ibid)

The evolution of the banks in Tanzania is categorized into five sections, during the Germany rule, British rule, Post independence before arusha declaration, post Arusha



Bibliography: ACCA Study Text (1996) Managerial Finance, Certificate paper 8 July 1996, London BPP Publishing, London Aikaeli ( 2008) ,commercial banks efficiency in Tanzania, paper presentation in economic development in Africa, march 2008, Catherine college ,oxford. Altman ,E.I. 1984, corporate financial distress : A complete guide to predict financial distress. Baisi, M.D (2005) Corporate Financial Management; A student Manual Bath etal (1997) commercial banking structure, regulation and performance, paper presentation on international comparison Aurburn University. Banking and financial institution Act ( BFIA) 1991 Block, B.S.and Hirt.A.G., (1997), Foundations of Financial Management, Eighth Edition Irwin Book Team Chijoriga, M.M (1997) An application of credit score and financial distress prediction models to commercial banks lending: The case of Tanzania, unpublished phd thesis, wu wein university. Churchill, A.G., and Peter, P.J., (1998) Marketing, Creating Value for Customers, Second Edition, New York: Irwin McGraw – Hill. Churchill G.A (1996).Basic Marketing Research.3rd Edition, Orlando Florida the Dryden Press Gabriel .O.E ( 2006) , Application of porter’s framework in the banking industry of Tanzania; A student manual Eugene F. Brigham and Joel F.Houston (1998), Fundamentals of Financial Management, Eight Edition, New York Dryden Press, USA Fernando A Fethi.D. etal ( 2001) ,an empirical study of schostastic DEA and financial performance of Turkish commercial banks, the paper presented in Hawaii international conference of commercial banks. George Foster (1986), Financial Statement Analysis, Second Edition, New York, Prentice Hill, International Edition. Joseph, A. (2003) Performance Evaluation of Tanzania Breweries Limited (TBL) Post Privatization” Unpublished MBA Dissertation, University of Dar es Salaam. Maziku .A.P (2009), Analysis of financial statements of banks: student manual Market intelligence magazine ( 2004) , Banking survey, 2003 pg 40-60 Nyirabu,K.M ( 1980) Banking policies in Tanzania Kimei, C Kothari, C.R (1998).Research Methodology: Methods and Techniques, 7th Edition, New Delhi, India Lema ( 2004) “predicting failure and financial distress of commercial banks in Tanzania” un published MBA dissertation Obama, J.J.M. (1989) a comparative study of the financial performance of Financial Institutions in Tanzania. Unpublished MBA Dissertation, University of Dar es Salaam Onen .D and Oso .Y .William (2008) The research methodology, Makerere university Presidential Banking commission ( 1990) “ financial sector Restructuring in Tanzania”, The report and recommendations of the presidential commission of enquiry into the monetary and banking system in Tanzania.

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