ABSTRACT
This research work involves an insight into the problems faced by commercial banks in retrieving funds given out to customers as loan and reasons for failure in the repayment of such loans. The study starts by examining the importance of sound credit administration in any commercial bank and the general view of credit. Also, problems of the study, the significance, scope and brief history of First Bank Nigeria Plc are highlighted.
In chapter two, literature are reviewed on the importance of credit to the economy, ways of controlling fraud and reduce non-performing loan are reached.
The methodology adopted for analyzing data are clearly stated in chapter three and the procedures and methods used in analyzing data are also given.
Chapter four focuses on Data presentation, analysis and interpretation are carried out. Consequently, research questions stated in chapter one are done using appropriate statistical techniques based on the findings of the study.
Finally, in chapter five, some recommendations were made to which in my opinion will to a large extent be useful to any person who may have one form of contact or to the others with this project work at any point in time.
TABLE OF CONTENTS
Title i
Certification ii
Dedication iii
Acknowledgement iv
Abstract vi
Table of Contents viii
Chapter One
1.1 Introduction 1
1.2 background of the study 2
1.3 Statement of the problems 4
1.4 Purpose of the study 4
1.5 Significance of the study 6
1.6 Research Questions 8
1.7 Limitation of the study 9
1.8 Definition of Terms 11
1.9 Organisation of the study 13
Chapter Two
2.1 Introduction 15
2.2 Nigerian banking and bank credit 16
2.3 First Bank Plc and Credit Management 18
2.4 The Central Bank of Nigerian and Bank
lending activities 20
2.5 Principles of Credit Administration 21
2.6 Bank Capital and Incentive Compatibility 25
Chapter Three
3.1 Introduction 27
3.2 Population 27
3.3 Sample and Sampling Procedure 28
3.4 Sources of Data 28
3.5 Questionnaire Administration 30
3.6 Data preparation and Presentation 31
3.7 Instrument for data collection 31
3.8 Method of data analysis 32
Chapter Four
4.1 Introduction 33
4.2 Data Presentation 33
4.3 Discussion of Findings 39
Chapter five
5.1 Summary of Findings 42
5.2 Recommendations 44
5.3 Conclusion 46
References 48
Appendix 51
CHAPTER ONE
INTRODUCTION
In Nigeria, banks play an important role in the development of her economy. No economy in the world under the present dispensation can thrive without banks and other financial institutions. The Nigerian Banks are being reputed for the provision of a basket of interrelated services to:
The individual, government, profit and non-profit oriented organizations, as financial intermediaries, they thus provides the means by which funds are raised and mobilized by ways of loans and advances; through the Nigerian financial system, banks are more active in the short term loans, raising overdraft and trading in foreign exchange with marginal effects on the real sectors.
For efficient administration of credit as strongly put, this work aims at putting in place viable, safe and some of financial system that will launch Nigerian on the path of sustainable growth, system that were trust prevails. Most glaring, a financial intermediaries attaining higher level investment is their goal.
BACKGROUND OF THE STUDY
Credit in commerce and finance involves the transfer of money or property in promise of repayment, usually at fixed determinable date; the transferor thereby becomes a creditor and the transferee, a debtor. For this reason, credit are simply terms describing the same operation viewed from the opposite standpoint.
In developing country like Nigeria, sometimes, a credit will require a guarantee by a third party to pay the credit should the debtor fails, or the debtor may be obliged to provide collateral securities by assigning it to the creditor in the event of default, which is equal to the loan in value.
Government borrowing as by the issue of government bonds and stocks which are sold in deferred payment or higher purchase plan, the seller in possessor may retains the goals until final payment is made. The depositing of funds are used for loan and investment purposes, and the bank is legally bound to repay them as an ordinary debtor.
Creditor and the Economy
The credit position with a country at any given time is a useful indicator of state of the economy, expanding credit reflects a period of business prosperity, whereas contracting will reflect a period of decline in economic activities or depression, fluctuation in the supply of credit can also have effect on inflation and increases in credit circulation which can tempt business to increase their prices.
Government, likely the CBN are worthy of either expanding or contracting credits depending on the measures that calls for urgency or which is necessary to take, they do these through Open Market Operation (OMO), Moral Suasion etc.
STATEMENT OF THE PROBLEMS
This study is carried out in order to have an insight into the problems faced by commercial banks in retrieving the funds given out to their numerous customers as loan and the reasons for failure in the repayment of such loans.
The study started by first examining the importance of sound credit administration in any commercial bank and the general view of credit. Also, the problem of the study, the significance, scope and statement of hypothesis and a way of controlling fraud and reducing non-performing loans.
PURPOSE OF THE STUDY
Many people have watched their business closed for many reasons which relates from the lack of funds to lack of thorough awareness about the various facilities that could be obtained from commercial banks. This study will therefore assist in findings out the procedures of getting loans from commercial banks, assist borrowers in finding out problems who intends to seek the banks assistance through loans might be confronted with and how to contend with them.
