1.1
Background To The Study
The Bank is a financial Institution established to provide financial services
of accepting deposit from customers, providing credit facilities and other
auxiliary functions aimed at meeting the financial services need of the people
and of facilitating the development and expansion of the real sector of the economy.
Bank credit constitute an important source of providing finances to investors
for the purpose of carrying out businesses and the creation of new investment
to promote economic growth and wealth maximization both at the micro and macroeconomic
sector. However, the challenges of inaccessibility to loans and credit still
persist in a larger dimension due to high interest rate, tight requirement for
loan applications, non-conformity with the credit policies and sharp practices
of some bank officals. Abasss A. Shiro (2004). The bank must utilize the
granting of credit as an opportunity increase the supply of money to raise
investment levels in the country. Therefore, it is expedient
that bank managers should be equipped with better information,
principles and techniques required for effective lending rather than
regarding them as a mere guidelines which have limitation. Lending is highly subjective
in nature, the final analysis depends on the judgment of the lender,
hence in making final judgment, the lender must review all the techniques,
principles, and knowledge acquired through environmental and projects
analysis. The credit character and prospects of the borrower must
also be scrutinized. Consequent upon the satisfactory fulfillment of the loan
criteria the bank carries out the granting of loans to customers to meet the
banks objective of credit lending and ensuring the attainment of low level of
bad debt, profitability, customer satisfaction, and shareholders satisfaction, employee
motivation and attainment of the general objectives of the bank. The research
therefore seek to investigate Loan and credit administration: problems and
prospect in deposit money bank in Nigeria (A Case study of first bank Nigeria
PLC)
1.2
Statement of the Problem
Bank
credit constitute an important source of providing finances to investors for
the purpose of carrying out businesses and the creation of new investment to
promote economic growth and wealth maximization both at the micro and
macroeconomic sector. However the challenges of inaccessibility to loans and
credit still persist in a larger dimension due to high interest rate, tight
requirement for loan applications, non-conformity with the credit policies and
sharp practices of some bank officals. Abasss A. Shiro (2004). The bank must
utilize the granting of credit as an opportunity increase the supply of money
to raise investment levels in the country. Therefore, it is
expedient that bank managers should be equipped
with better information, principles and techniques required for effective
lending rather than regarding them as a mere guidelines which have
limitation. The problem confronting the research is to proffer and appraisal of
Loan and credit administration: problems and prospect in deposit money bank in
Nigeria (A Case study of first bank Nigeria PLC)
1.3
Objectives of the Study
1. To
determine how effective loan and credit
administration is in the Nigerian banking system.
2. To
examine the problems of loan and credit administration in the
Nigerian banking system.
3. To
determine the perception of bankers on the loan and credit administration in
Nigeria.
1.4
Research Questions
1. How
effective is the loan and credit administration in the Nigerian banking system?
2. What
are the problems of loan and credit administration in the
Nigerian banking system?
3. What
are the perception of bankers on the loan and credit administration in Nigeria?
1.5
Significance of the Study
The study proffers an
appraisal of loan and credit administration: problems
and prospect in deposit money bank in Nigeria (A Case study of first bank
Nigeria PLC)
1.6
Research Hypothesis
Ho1: The loan and credit administration in
Nigeria is significantly ineffective
H1: The loan and credit administration in
Nigeria is significantly effective
1.7
Scope of the Study
The study focuses on the
appraisal of loan and credit administration:
problems and prospect in deposit money bank in Nigeria (A Case study of first
bank Nigeria PLC)
1.8
Limitations of the Study
The study was confronted by some constraints including
geographical factor and logistics.
1.9
Definition of Terms
An Investor: person who invest money in a
business, Customers of the
Bank who deposits
money or buy share from the bank.
Debt: Payment which must be made but has not
yet been paid to some
Body or
institution.
Financial institutions: These
are the custodies of funds and those who raises
Funds for other investment.
Like banks and insurance company’s
Loan: Certain amount of money lent out to customers.
Monetary
Policy:
This is policy initiated by government to regulate the volume of
money in circulation.
Credit Limit: credit limit constitute the banks policy
concerning the maximum level of credit to be granted to customers.
Global Banking:
This connotes the interface of banking services and products through
information technology network, which is more customer oriented than
traditional banking.
Credit
Management: This involves planning and
controlling collection of loan and advances in line with management corporate
plan of maximizing shareholders wealth.
Distress Bank:
These are banks with problems of liquidity. Poor earning
REFERENCES
Abasss A. Shiro (2004).LOANS AND CREDIT
ADMINISTRATION
Dyers. L.S (1974) A Practical Approach to Bank lending
Henry ling Limited
England.
Oyejide. A .$ Soyode. A. (1986) Commercial Banking in
Nigeria Ibandan
University Press.
Prof. Don. M. Ike (1993) Problems Prospects of Debt
Management P $ T
Business Time vol.
18 No 19 Lagos Monday. May 10.