RECIEVEABLES AND IT’S EFFECT ON LIQUIDITY OF AN ORGANIZATION (A CASE STUDY OF UNION BANK PLC )
This research work is typically based on
Recieveables and it’s effect on liquidity of an organization in which Union
Bank Plc was taken as a case study. Commercial banks, like any other business
enterprises are profit-seeking organization. The method of data collection use
in this research is the primary and secondary data. In order to enhance
analysis of this research work, the researcher make use of the descriptive and
analytical approach through the use of questionnaire, documented book and
documented records. It is evidenced that
interest earned on loan and advances constitute an appreciable percentage on
the gross earning. Undoubted, liquidity management is an important factor in relating the
public’s confidence in the ability of financial institution as and when they
fall due. However, recommendation would be based on area of weaknesses observed
while analyzing the information of this recommendations will improve the Recieveables
and it’s effect on liquidity of an organization.
OVERVIEW OF THE STUDY
or credit is as old as man himself. it has existed before the development of
money as a medium of exchange during the store age, credit was being merely
through the means of bunches or guesses with the introduction of industrial
revolutions. It has to replace the overview without simplistic ones, the major
function of a bank is to serves as a financial intermediary for the collection
of money from surplus area depositors and distributing it to the detect
economic unit. The structure of banks balance sheet show that over 59 percent
of its total assets consists of loans and advance. it is also evidenced that
interest earned on loan and advance constitute an appreciable percent of the
banks gross earning.
primary skill of a banker is therefore concern with Receivables of money hence
the importance attached to highly skilled analysis. It is not only giving out
money, that is important but must ensure that much money, given out comes back
and that adequate revenue is earned on it’s for the bank. The introduction of
this prudential guide line is a pointer to this important factors of the
strength of financial institution prior to the development of modern banking
were precious metals like gold, and other valuable items kept in such places as
temples or pieces of worship for reasons.
practice was very rampant in ancient Rome, Mesopotamia, Greece, China, Japan
etc with the emergency of money economy and development of large scale trading
precious metal came into circulation. These metals first appear in large
numbers of coins of different origin. Since some of them have to be exchanged,
this became the business of money changers.
word bank came from the Italian word called the “Banker” meaning the table on
which money changes carried out their operation. Thus, in the ancient world
money changers were the first bankers, however, the business of modern banking
was first carried out by the Italian gold smith who change fees on it and gave
out evidence in form of receipt. Today, banking has developed greatly and
different commercial banking (the case study specialized bank and merchant
OF THE PROBLEM
is concerned with granting of credit facilities to customers and liquidity
means the case at which a firm converts it most current assets into raw cash to
meet its current liabilities
statement of the problem is that Receivables is influenced by some factors
which are needed to be evaluated granting facilities to their customers .which
are intentional policies to the banking guideline of the central bank lending.
bank of Nigeria monetary circular is another form of limitation by banking
ability loan to customers. There is a minimum liquidity ratio that should be
maintained by each bank prescribe by (CBN) Central bank.
OBJECTIVE OF THE STUDY
study highlights the relationship between the theories of liquidity management
and their bearing in Receivables function of the commercial banks, Hence the
objectives of the study are follows.
evaluate the Receivables practices and procedure of the bank.
evaluate the extent to which banks under review is guided by the enumerated
theories in the execution of the profitability.
review the credit administration and control procedures in the bank.
establish whether liquidity constitute a constraint in the performance of
to a recommendations based on the finding of the study.
Question of the study is as follows;
what extent do commercial banks evaluate the Receivables practices and
procedure of the banks?
what extent can the credit administration and control be reviewed in Mainstreet
bank Nigeria plc Bida.
can the credit administration and control in Mainstreet Bank Bida Niger state
are the necessary recommendations based on the findings in Mainstreet bank in
Bida Niger state.
are the constraints in the performance of the Mainstreet bank in Bida Niger
SIGNIFICANCE OF THE STUDY This project is importance to those
institutions who grant credit to customers, because one of the principal
businesses of bank is Receivables and bulk of the bank incomes from this
survival of a bank depends mostly on the efficient management of its Receivables
portfolio. The existence of bank Receivables channel
is conditional on two important assumptions which are monetary policy decisions
impact on bank liquidity position and its changes in supply of loans.
Bank Receivables surveys conducted by central bank give the possibility
to test some mechanisms of bank Receivables channel as they shed light on the
other interest rate conditions of borrowing.
SCOPE AND LIMITATION OF THE STUDY
research work focuses attention on Receivables and liquidity on management in
banks with a particular reference to (Mainstreet) Afri-Bank Nigeria Bank plc.
conducting a research of this nature, however problems are expected to be
experienced. It must be noted that primary, observation and interview method
through compliment of each other still suffer from some set back which include
willingness and authority to report and their ability to report accurately,
while questionnaire can also face problem of nonchalant or lackadaisical
attitude of treatment and response from the subject.
limitation in the data collection process was the inability of the banks
officers to reveal data concerning some matter and practice of interest due to
an order from above profitability, then from doing so and what they called
1.7 DEFINITION OF TERMS
following are some of the definition of terms that may attempt to shed more
light in Recieveables and it’s effect on liquidity of an organization.
1. MANAGEMENT: This is the function that
coordinates the effort of people to accomplish goals and objectives using
available resources efficiency and effectively.
2. CREDIT: This is an act of Receivables and
borrowing as an instrument of circulating both money and productive capital
among the unequal owners of means credit.
3. CASH: This is the amount of notes and
coins help in the strong rooms of branches of the banks and in the head office
to meet customer’s cash demand.
4. DEBT: Debts can be defined as
obligation to make future payment for the credit offered by lender and
subsequently received by person who is obligated to make future payment.
5. LIQUIDITY RISK: This risk that fund
will not be available to meet deposit withdrawals loans drawn down, maturities
borrowing or other cash outflow.
6. LIQUIDITY: This is a means of the
relative amount of assets in cash or which can be quickly converted into cash
without any loss in value available to meet short term liabilities.
7. PROFITABILITY: Profitability is the
term that is used in a commercial word to mean different meaning; it can be
define as the excess of revenue over expenses over a period of time.
8. SECURITY: Assets or property charged to
direct a loan. It can belong to the borrower it is called direct security and
can belong to a third party it is called collateral security. Also it used
generally to describe any stock or shares. Strictly it refers to secured stock,
that is a gilt edged stock or debentures.