Management of Cash and Marketable Securities and its Impact in Small and Medium Financial Intermediaries’

Abstract

Management of Cash and Marketable Securities and its Impact in Small and Medium Financial Intermediaries’ activities ABDULRAHEEM, A. O. Department of Business Education, Federal College of Education Odugbo, Benue State, Nigeria Abstract In a business, anything done financially affects cash eventually. Cash to a business is what blood is to living body. The study sought to identify the management of cash and marketable securities and its impact in small and medium financial intermediaries’ activities. The study highlights how cash management constitutes major parts of firms’ activities, what are the problems usually encountered by the investors in term of government policy, and how does discounting of securities before its maturity period affect profit earning in a financial intermediary? The population of the study comprises of all small and medium financial intermediaries, these include cooperative societies and micro finance banks in Katsina metropolis. Systematic sampling techniques were used to select a sample of two as research subject. The study utilized questionnaires divided into two sections for data collection. Descriptive statistics were used to analyse the quantitative data and the analysed data was reported using frequency distributions, and percentages. The study established that cash management constitutes a major area of financial intermediaries operations. It reads that bank rate policy is not so effective in controlling credit and the investment of excess or surplus cash in marketable securities minimize cost arising from cash shortages. It was however recommended that the financial intermediaries should determine in their budget what the optimal level of cash should be for the year. That once the minimum cash balance has been established, short term investment policy for any cash surplus can be determined. That the financial intermediaries should set up strategies toward the attainments of the minimum or optimal cash level to avoid the shortage of cash because such shortage of cash could lead the intermediaries into an embarrassing situation.