Understanding the Nigerian Financial System for Secondary School Students
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Chapter 3- The twin daughters of the financial market Money and Capital Market The financial market has two sides; the Money market and the Capital Market. The difference in both markets is determined by how long lenders are willing to lend and how long borrowers can keep the money borrowed Chapter 3i The Money Market: This is the short end of the financial market. It is called short end because money can only be borrowed or lent for short periods of time In the money market, intending and existing investors can only borrow money for short periods of time, say from one month to 12 months. In this market, you have mainly commercial banks and related financial institutions like Finance Houses, Discount Houses, and Microfinance Banks among others. Chapter 3ii The Capital Market; The Capital Market is referred to as the market for money that can be borrowed or invested for a long period of time. It is the market where people or companies can borrow or lend money for a longer period, say from 12 months to forever or perpetuity. In this market, you have investment or merchant banks, issuing houses, stock brokers, pension funds, insurance firms, mortgage banks among others. Test your knowledge 1. What are the two sides of the financial market? 2. What is the difference between both sides of the market?
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About the Book
Everybody wants money, but few understand the so-called mystery behind the making and spending of money. If money grew on trees, the tree will be called the financial system, because that is the place where money is created and consumed. Those who understand how the financial system work are always in a better position to make more money than those who do not understand it. This book aims to create an understanding of the Nigerian financial system. It is written for secondary school students and adults seeking to understand the financial system. Students who read this book will become working adults with a better understanding of the financial system and of how to make more informed decisions about making and spending money.
About the Author
Anthony Osae-Brown is a financial journalist and communication professional with over a 14 years experience writing about economic and financial issues in Nigeria as well as working in the communication departments of leading banks. He has a deep understanding of economic and financial issues as it relates to the Nigerian and West African economy, and its relationship with global economic issues. He had worked with leading newspapers like BusinessDay, Nigeria’s leading business newspaper, and mergermarket (formerly, the financial Intelligence news service of the Financial Times). He is also a regular contributor on economic issues on BBC. He is regularly consulted by foreign firms conducting due diligence on Nigerian companies or individuals seeking a perspective on economic issues concerning Nigeria and West Africa. As a communication professional that has worked with leading banks, he has used his strong writing skills to shape the brand perception and reputation of some of Nigeria’s leading banks resulting in significant improvement in product sales. He is well versed in financial communication, as well as financial and economic analysis.