ABSTRACT
The recapitalization of the banking sector in Nigeria since 2005 has brought about a total change in commercial bank lending behavior and credit management in Nigeria. With the growth in entrepreneurial activities in Nigeria, the demand for bank loans is at the increase. Small and medium scale business owners are constantly looking for business credit to expand their operations and sustain their businesses. This gap between business owners demanding for bank loans and the in-ability of commercial banks to totally remedy the situation is disturbing and needs proper attention from the government.
Employees of first bank Nigeria plc, Uyo Branch were used for the study. Findings from the study are limited to First bank plc, Uyo.
Concerning methodology, data was gotten from both primary and secondary sources. Questionnaires issued to respondents constitute the primary source
CHAPTER ONE
- INTRODUCTION
Commercial Banks operate to mobilize deposits from the populace and keep. Some in trust payable on demand. Through the performance of this role, Banks act as reservoir for surplus funds and thus lend safe portion of these funds to clients that have genuine needs for them. The banks have special responsibility to ensure effective management of these funds kept in trust with them by depositors. Chester A Rude puts it that the way and manner in which funds are handled “determines whether they are laying a sound foundation or creating future problems for either the borrower, themselves or the economy” If bankers unnecessary withhold credit, the business suffer and so do the economy.
Lending activities are prominent at all levels of our economy, which gave rise to loan management and credit administration. This credit analysis, documentation, disbursements and monitoring of loan to ensure repayment of both principal and interests on due dates becomes pertinent.
One of the goals credit extension is to achieve prompt repayment on due dates thus loan management typically involves credit appraisal and administration.
Lending carries a reasonable portion of resource exposure of commercial Banks in Nigeria. Therefore, the ability of a bank to generate much profit is largely a function of effective and efficient management of its lending portfolio. Due to its trustee status and in order to protect the depositors Nigerian banks are being
guided in their operations by so many regulatory bodies in order to avert bad lending and liquidity problems. Operations and prudential guideline by the Central Bank of Nigeria are always in place.
Inspite of measures, which is aimed at protecting depositors and other public interests, the incidence of bad and doubtful debts resulting from lending activities has been on the increase in commercial Banks in Nigeria. This is as a result of negation in the primary objectives of granting credit and profit objectives of banks, hence the need for an appraisal of the present lending and credit administration techniques.
- STATEMENT OF THE PROBLEM
Most Commercial Banks in Nigeria are currently being threatened by huge bad debt burden. This incidence has eroded the confidence in the industry and eroded shareholder funds in most cases. Have BOFID (1993) and prudential guidelines helped in arresting these trends? The roles of regulatory framework is analysed to ascertain level of assistance to the financial system.
- OBJECTIVES OF THE STUDY
In the light of credit polices of commercial Banks vis-à-vis regulatory guidelines, this research work has the objectives to evaluate or appraise various techniques in the Administration of Bank lending from the point of disbursement to the point of recovery at the same time identify causes of increased level of bad debt profanation. The research has also identified reasons for bad debts provisioning and recommend appropriate strategies that may be appropriate in reducing debts write off.
