MANAGEMENT OF MICRO FINANCE BANK LOANS AND CUSTOMERS DEFAULT A STUDY OF IC-GLOBAL OLEH

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ABSTRACT
This research work is geared towards the management of Micro Finance Bank Advance and customer default in Banking industries in Nigeria and the implementation of its policies by Isoko IC – Global Bank Limited Oleh Delta State. The major economic problem clouding developing countries such as Nigeria is financing project which is been carryout by banks and also how viable is it rural community in the country. The study intends to provide an explanation of the various difficulties connected with the management of loan portfolio in Nigeria in micro finance banks and then make useful decision so as to arrive at an appreciable level of understanding among the parties involved. It will be a benefit to the general public that will be educated on the importance of loan repayment, it will also help the micro finance bank to attained more policies and strategies for checking default. The micro finance bank should supply loans savings and other basic finance services to the poor and that microfinance bank should make loans available to the small and micro enterprises. This research work is divided into five chapter each of these chapter is structured in such a way that those who are not in the banking profession will have little or no difficulty in comprehending the purpose of the project.

TABLE OF CONTENTS
Title………………………………………………………………………………..i
Approval page……………………………………………………………………ii
Dedication…………………………………………………………………………iii
Acknowledgement……………………………………………………………….iv
Abstract……………………………………………………………………………v
Table of contents………………………………………………………………..vi
CHAPTER ONE-
INTRODUCTION………………………………………………………………..1
Background of the study………………………………………………………..1
Statement of the problem……………………………………………………….2
Objectives of the study………………………………………………………….3
Research question……………………………………………………………….4
Significance of the study………………………………………………………..5
Scope of the study……………………………………………………………….6
Limitation of t he study…………………………………………………………..7
Definition of term…………………………………………………………………7
CHAPTER TWO
LITERATURE REVIEW…………………………………………………………9
2.1 Origin of microfinance bank in Nigeria…………………………………..9
2.2 Objective of microfinance bank……………………………………..….13
2.3 Micro finance bank loans and types…………….……………………..15
2.4 Criteria for lending on bankable project………………………………..16
2.5 What are the factors responsible for customers default……………..20
2.6 Function of the loan department of Isoko Micro finance bank ltd……21
2.7 Obstacles towards effective performance……………………………..23
2.8 Problems of micro finance bank………………………………………..24
CHAPTER THREE:
RESEARCH METHODOLOGY…………………………………………….…25
3.1 Design of the study………………………………………………………25
3.2 Area of the study…………………………………………………………25
3.3 Population…………………………………………………………………25
3.4 Sample and Sampling technique…………………….…………………26
3.5 Instrumentation……………………………………………………………26
3.6 Description of the instrument……………………………………………27
3.7 Validation of the instrument……………………………………………..28
3.8 Reliability of the instrument……………………………………………..28
3.9 Questionnaire administration. ………………………………………….29
3.10 Techniques of data analysis…………………………………………….29

CHAPTER FOUR:
DATA PRESENTATION AND ANALYSIS
4.1 Data presentation………………………………………………………..30
4.2 Data Analysis……………………………………………………………30
4.3 Data Interpretation………………………………………………………35
CHAPTER FIVE:
FINDINGS, SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of findings……………………………………………………38
5.2 Conclusion……………………………………………………………….39
5.3 Recommendation of the study…………………………………………40
Bibliography……………………………………………………………………..42
Appendix I……………………………………………………………………….43
Appendix II………………………………………………………………………44

CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
In Nigeria, credit has been recognized as essential tools for promoting small and micro enterprises (SMEs). About 70 percent of the population are engaged in the informal sector or in Agricultural Production. The federal and state government have recognized that for sustainable growth development, the finance empowerment of the rural area is vital, being the repository of the predominantly poor in society, and in particular the small and micro enterprises (SMEs). It is to enhance the improvement of the living condition of the people.
The small and medium scale entrepreneurs in rural areas lacks the necessary financial services, especially credit from the commercial banks, this is because they are considered not credit worthy. These programme range from Agricultural Development Project (ADP), the establishment of Agricultural credit bank to better life programme failed to achieve the desired result that lead to emergence of microfinance bank aimed at extending credit to micro enterprises and encourages entrepreneurship especially in semi urban and rural area.
The microfinance bank was introduced in 1996 to promote banking habit at the gross root level and it was established by the president of the federal republic of Nigeria Gen. Olushegun Obasanjo. They are institution constructed as a company licensed to carry on the business of providing micro finance services such as collection of saving loans provision, insurance money transfer services and other non financial services that are needed by the poor. The client of microfinance banks are typically self employed low income entrepreneur in both urban and rural area.
Currently, micro-finance banks are of two forms, as all licensed community bank in Nigeria that meet CBN guideline have been transformed to microfinance bank.

1.2 STATEMENT OF THE PROBLEM
In carrying put a research on management of micro finance banks loans and customer default. We discovered that some micro finance bank especially Isoko micro finance bank have brought development to he economic of Isoko. But the micro finance bank is faced with numerous problems of customer default which are as follows. Lack of stable government and enacting of new degree and policy to be implemented affects the micro finance bank loan and customer default, there is shortage of skilled professionals who can understand technology as well as well as the micro finance industry, power and communication infrastructure is inadequate in Isoko micro finance bank, Economy sabotage and strike by the labour union affect the banking industry and lack of business firm and industries in the urban area of the country do not establish branches in these area.

MANAGEMENT OF MICRO FINANCE BANK LOANS AND CUSTOMERS DEFAULT A STUDY OF IC-GLOBAL OLEH