LEASE FINANCING AND PROFITABILITY FOR NATIONAL DEVELOPMENT:
EVIDENCE FROM NIGERIAN QUOTED CONGLOMERATES

1 Atseye, Fidelis Anake, Ph.D
2 Mboto, Helen Walter Ph.D
1& 2 Department of Banking and Finance
Faculty of Management Sciences
University of Calabar, Calabar, Nigeria
E-mail: anakefidel@yahoo.co.uk
Telephone: +2348037903486, +2348052362248

ABSTRACT
Decisions to finance the operations of Nigerian quoted conglomerates are contingent upon the level
of development of the Nigerian domestic financial market. Firms in developing countries like Nigeria
often utilize bank loans and leases as sources of debt financing. Asset-based debt financing such as
lease offers a firm convenience and flexibility of fixed assets acquisition and disposal; shift of risks
of obsolescence and maintenance cost. The paper examined the impact of lease financing on
profitability of Nigerian quoted conglomerates for the period spanning 2012 – 2017. The study
focused on 6 conglomerates that are quoted on the Nigerian Stock Exchange as at 2017. Data were
collated from published accounts of the affected companies. Data were analysed using descriptive
and pooled OLS multiple regression statistics. Unit Root Test was conducted using Augmented
Dickey –Fuller.. Estimated panel results indicated a negative and insignificant impact of Fixed Assets
Turnover (FAT) on Return on Assets (ROA), Lease Financing (LFN) had a positive and insignificant
impact on ROA, and Debt Ratio (LTDR) had a negative and insignificant impact on ROA. Firm size
was used to control possible problem of non-linearity and heteroskedasticity. Based on these findings,
leasing option was recommended as one of the sources of debt financing to boost the capital of
Nigerian conglomerates to enable them to absorb losses, multiply fixed assets and grow continuously,
thus providing employment and income in terms of tax revenue, profits, dividends, and wages and
salaries to households for national growth and development.
Keywords: Leasing Financing, Profitability, Quoted Conglomerates

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