Credit Management in Nigeria Commercial Banks (A Case Study of First and Union Banks of Nigeria)
Chapter One
OBJECTIVE OF THE STUDY
The main objective of this study is on credit management in Nigeria commercial banks. But for the successful completion of the study; the researcher intends to achieve the following sub-objectives;
- To examine the effects of bad and doubtful debt on Nigeria Commercial Bank’s Profitability.
- To assess the incidence of bad debt in the banking industry and the economy in general.
- To identify the possible measure of preventing the occurrence of bad debt in the Nigeria Commercial Banks.
- To ascertain the relationship between credit management and banks profitability
CHAPTER TWO
REVIEW OF RELATED LITERATURE
The role of commercial banks in Nigerian economy
Onyido (1994) Described Commercial banks as the most dominant financial institution in the intermediation of short-term funds. He stated that by financial intermediation is meant the mobilization of financial resources from surplus spending units for production investment and the generation of assess or securities, in the process of supporting this view, Emekekwe (1990) described commercial banks as the most numerous of the financial institutions, and are not popular with the citizens. He said that they accept deposits (390mgs, 2:2 account and current) from customers and in turn creates and destroys money from their deposits. They are often referred to as retailers of fund because they deal in small monetary aggregates by making their facilities available even to the smallest conceivable banks play a leading role as more regulated than any other sector of the economy. He stated that this attribute has been as a result of the crucial intermediation played by the operators. Mande (1974) stated that in modern societies, the intermediation function is performed by the financial institutions notably by commercial banks. He added that commercial banks provide credits which arise out of the need to bridge the gaps between the surplus and deficit economic units such that the highest level of satisfaction in achieved. Corley (1970) and Adeniyi (1985) supported Mandel when they stated that credit is a crucial factor in the broad process of any economy and that by lending, banks, provides valuable services to the community as they serve to channel money from those who have idle forms to those who can put money into constructive use.
CAUSES OF NON PERFORMING ACCOUNTS.
Dandy (1975) enumerated the following as possible factors that may give rise to non-performing accounts:-
- Excessive lending on security values
- Bad management of borrowers bank accounts
- Incomplete knowledge of customer’s activities.
- Bad judgment
- Extraneous factors such as reliance on trade customers, over trading, optimistic balance sheet, misrepresentation and dishonesty of the customer.
Nwankwo (1980) agreed with the factors but added that in a Nigerian situation, most borrowers regard bank loans and over-draft as their own share of the “National Cake” and therefore do not bother to repay them.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to a examine the effect of credit management in Nigerian commercial banks
Sources of data collection
Data were collected from two main sources namely:
(i)Primary source and
(ii)Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
Population of the study
Population of a study is a group of persons or aggregate items, things the researcher is interested in getting information on the study a study of credit management in Nigerian commercial banks. 200 staff from selected commercial banks in Uyo, Akwa Ibom state was selected randomly by the researcher as the population of the study.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain a study of credit management in Nigeria commercial banks
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of credit management in commercial banks
Summary
This study was on a study of credit management in Nigeria commercial banks. Four objectives were raised which included; to examine the effects of bad and doubtful debt in Nigeria Commercial Banks Profitability, to assess the incidence of bad debt on the banking industry and the economy in general, to identify the possible measure of preventing the occurrence of bad debt in the Nigeria Commercial Banks, to ascertain the relationship between credit management and banks profitability. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited.. The total population for the study is 200 staff from different commercial banks in Uyo, Akwa Ibom States was selected randomly. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up auditors, human resource managers, customer care officers and marketers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
Credit management, otherwise referred to s credit lending and administration is the care of bank operations. It is the central bolt or bone of the organization, and can safely be proffered as the sadness and joy of the organization, based on the use to which it is put most banks experience crises because of poor management of their loan portfolio, especially in the era of competition. As such, it is importance cannot be over emphasized because an organization cannot service the odds of liquidity imbalance with an improper and ineffective management of assets and liabilities.
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