How many discount houses are in Nigeria?

There are five discount houses in Nigeria wholly owned by consortiums of banks and other financial institutions as allowed in the Discount House guidelines 2004 by the Central Bank of Nigeria.

What is the main feature of a discount house?

In the financial world, a discount house is a firm that specializes in trading, discounting, and negotiating bills of exchange or promissory notes. Its transactions are generally performed on a large scale with transactions that also include government bonds and Treasury bills.

How do discount houses make money?

Discount houses borrowed funds from commercial banks through short-term securities at a lower (below the market) rate and lent the received funds to borrowers at a higher price. The difference served as the discount house’s profit.

What are the major sources of funds for discount houses?

The discount houses dealt largely with the corporate market and their clients were mainly financial institutions registered under the Banking Act. The source of funding for discount houses were the banks, finance houses, mortgage institutions, building societies, pension funds, unit trusts, and asset managers, etc.

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What are the functions of discount market?

The primary function of the discount houses is to trade on securities and instruments, and since their focus are in these securities and instruments, coupled with their deep understanding in relation to transactions in the money market, they have been able to maximize their functions in this regard, and most of the …

What are the advantages of discount houses?

They give discounts by reducing their overhead cost and by buying in bulk.

Features of discount houses are;

  • Offer low price.
  • Operate on a discount basis.
  • Purchase is on a cash basis.
  • Low mark-up.
  • Wide variety of goods are stocked.

What do you mean by acceptance house?

: a banking institution in England specializing in financing foreign trade by allowing the use of its name as drawee on bills of exchange and by frequently acting also as fiscal agent and financial adviser (as for foreign nations or municipalities) — compare merchant banker.

What call money means?

Call money is any type of short-term, interest-earning financial loan that the borrower has to pay back immediately whenever the lender demands it. Call money allows banks to earn interest, known as the call loan rate, on their surplus funds. Call money is typically used by brokerage firms for short-term funding needs.

What is a discount market?

: an open market in which negotiable instruments (as acceptances, bills, and notes) are discounted — compare bank discount.

What are the various types of financial services?

10 Types of Financial Services:

  • Banking.
  • Professional Advisory.
  • Wealth Management.
  • Mutual Funds.
  • Insurance.
  • Stock Market.
  • Treasury/Debt Instruments.
  • Tax/Audit Consulting.
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What is the purpose of investment companies?

The main business of an investment company is to hold and manage securities for investment purposes, but they typically offer investors a variety of funds and investment services, which include portfolio management, recordkeeping, custodial, legal, accounting and tax management services.

What are finance houses?

a financial institution which accepts deposits of money from savers and which specializes in the provision OF INSTALMENT CREDIT to borrowers and LEASING facilities.

What are the types of money market instruments?

Following are the types of Money Market Instruments:

  • Promissory Note: A promissory note is one of the earliest type of bills. …
  • Bills of exchange or commercial bills. …
  • Treasury Bills (T-Bills) …
  • Call and Notice Money. …
  • Inter-bank Term Market. …
  • Commercial Papers (CPs) …
  • Certificate of Deposits ( CD’s ) …
  • Banker’s Acceptance (BA)

What is the meaning of financial intermediation?

The financial intermediation process channels funds between third parties with a surplus and those with a lack of funds.

How many merchant banks are in Nigeria?

Summary on Merchant Banks In Nigeria

So, there are a total of 5 merchant banks in Nigeria, as recognized by the CBN.

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