1.1 BACKGROUND OF THE STUDY:
Erasing enterprises is established with the assumption that the
objective of every management is to maximize profit. And a very good
example of the sector is the financial institution known as the banking
sector. The phenomenal growth of banks following the introduction of
SAP creates a fake impression that the banking sector is an all corners
The banking and financial industry if unique in that it depends
mostly on the public confidence and once the confidence is eroded on
some banks, it may spread to other banks and institutions and this could
be very dangerous to the whole system and the economy at large.
It should also be noted as (Orji 1998) stressed that bank lending
simply means credit creation and that implies that the profit
maximization of the banks is mainly realized through credit creation,
the bank authorities should abide by the rules and regulation of APEX
Bank (CBN) i.e. lending to the worst unit sector of the economy and on a
The research work will focus on the possible reasons for bank
failures. In this regard of loan lending and loan recovery and effect
of such on the rest of the populace plus how the financial industry
could be transformed to meet the increasing challenges of the present
day and finally assessing the role of the Central Bank of Nigeria in
ensuring safety of bank loan.
1.2 OBJECTIVE OF THE STUDY:
The issue of bank lending and its recovery strategies passed as a
challenge to the financial sector in particular and the whole economy in
general and as such the project work is carried out to meet the
following aims and objectives.
- To know if the increased administrative expenses can be eliminated by good lending policies.
- To find out if default borrowers can be reprimated by serving a demand notice.
- To ascertain how secured the collateral securities of these loan are.
- To find out the extent of defaultness in the repayment of loan advances.
- To establish the factors responsible for loan repayment in Nigeria.
1.3 SIGNIFICANCE OF THE STUDY
The research study will bring to light the observed reasons for
commercial bank credit recovery failure and the effect of such on the
institution, this will help banks to make amendment where necessary and
help them increase their creation abilities and recover them at the
fullness of time.
1.4 SCOPE AND LIMITATIONS OF STUDY:
This research work focuses on the commercial bank lending and loan
recovery strategies due to problem associated in the regards in the
The study will reflect briefly on the history of banking business in
Nigeria, the development over the policies on operations and mode of xx.
However, due to limitation the work now focused on the Citizens
International Bank, currently, there has not been enough work on the
loan recovery strategy in the industry. It is expected that the move
will be affected by those factors.
This financial constraints has adversely affected this study. Also
proximity to published book on the said project topic as a difficult
task to overcome.
Moreso, the data obtained is with the scope of the domestic banking
as financial system, the issue of time constrains the project works.
Since this work needed extensive research to come out a very
constructive project and while it was done simultaneously with other
class work it has not been easy to allocate enough time to this study.
The work though very interesting was constrained by certain factors.
It would have been wonderful if author was opportune to have all the
resources needed at his disposal, but this was not possible due to time
factors and financial constraint on the other hand and financial
problems coupled with general like in faces as occasioned by the fuel
crisis that prevailed over the period of the study automatically limited
my visitation to places where I would have sourced information.
1.5 DEFINITION OF TERMS:
The following are some technical terms used in the project.
1. CREDIT POLICY:
This is how a firm plans to give its credit collection of debts owned to it by its customers.
2. LOAN PORTFOLIO:
A mixture of shares and bonds held by a firm.
It is the money by which one start off a business with. In a
more technical terms, it could be referred to as the resultant between
total assets and the habitation of a firm.
The dismantling of regulation by Central around the world. This has been another features of xxx internationalization.
Capital adequacy, asset quality management competence, burning strengths and inquisitively sufficiency.
6. NIGER EUGENE:
(1999) defines manager as the fusing together to two or more companies to form a company whether fusion it voluntary of forced.
Structural Adjustment Programme.
8. APEX BANK:
This is the regulatory authorities of banking in Nigeria and if otherwise known as Central Bank of Nigeria.