EXAMINATION OF CREDIT MANAGEMENT IN RETAIL BANKING SECTOR OF NIGERIA


EXAMINATION OF CREDIT MANAGEMENT IN RETAIL BANKING SECTOR OF NIGERIA

CHAPTER ONE

1.0                 INTRODUCTION

1.1                 BACKGROUND OF THE STUDY

Credit management in banking sector is an important issue in the economy of a country. It is important in the scene that success or failure in the management of credit determines the continued existence of any retail bank in the country.

It is also important to the economy because the success or failure of any retail banks, that provides retail banking services (which can accept or grant loan as low as W100 to its customers) to the general public will have direct effect on the deposit that is collected from their customers.

Bank is one of the many institutions that perform financial intermediary role in the Nigeria economy. The word "credit can be defined as belief, trust or faith. More elaborately, credit is a means by which people are unable to acquire commodities, such as goods and services, the sales of credit facilities is not the final, because it is expected to be repaid at a future time with interest. There are quite a number of thing which the bank should take into consideration in order to make control and management of credit easy.

Retail bank ability to provide large credit depend on depositor's money, because retail bank are financial intermediary between surplus (depositors) and deficit, sector (Borrowers) of the economy.

In order to protect the confidence that depositors have in banks, there is need for the proper management of credit facilities which are disbursed to borrowers to avoid default or delay in repayment of their facilities together with interest.

Where bank fail to perform its duty and subsequently became distressed or liquidated, it is not only the share holder's equity that will be lost, but customer's deposits will also be affected. This is the reason why the federal government, the Central Banks of Nigeria and the Nigerian Deposit Insurance Co-operation (NDIC) did not leave the management on banking activities particularly in the area of credit facilities to the operator in the banking industry alone but also monitor the activities through directive and policies from time to time.

Credit comes in different forms and terms according to customer's need and nature of business. A high light of this is taken from prudential guidelines for licenses bank, credit facilities which include loans advance, overdrafts, commercial papers, bankers' acceptance and guarantee.

According to Seyi N. Athem (1994), "the process of optimal credit management therefore, entails the creation and administration of facilities to wards a full and satisfactory repayment within the agreed time frame". Credit management has become a major issue facing lender of today.

The achievement of a hundred percentage repayment of credit facilities with interest within agreed time and condition is more or less an illusion in the banking industry recently. Optimal credit management is therefore one that on credit is risk, that is those granted customers, privates, corporate, and government be it local, state or federal.

Optimal credit performance also recognized that credit facilities have to manager with an acceptable balance in the mix-safety, liquidity and possibility requirement. Under such condition, repayment could still be achieved at a slightly longer period without loss of financial; through there may be an acceptance interest, discount or waivers.

1.2           STATEMENT OF PROBLEM

We may have effect of credit management policy on bank performance. A variety of factors can cause the operation of banks to fail to achieve its objectives.

In conducting the research, questionnaires, such as these are asked, what are the resultants effect of credit management on bank performance and how has effect of credit management improve in the banking sector.

1.3                 OBJECTIVE OF THE STUDY

The task of this study is to examine credit management process carried out by the retail banks.

The following are the objectives of the study.

To critically examine credit management with a view of finding out loopholes which debtor usually exploit to default or delay in repayment of credit facilities granted to them. To highlight the main causes of poor credit management banking sector. To state the basic conditions/principles that win faster good credit management in financial institution. 

1.4            RESEARCH QUESTIONS AND HYPOTHESIS

           There are many area on which question could be raised in credit management. Among these areas are preparation and appraisal of feasibility report, monitoring and control of customer activities after the disbursement of the facilities and which sector of the economy is most convenient or risky to lend. When managing credit to make maximum profit without faulting the liquidity ratio imposed by the Central Bank of Nigeria.

Hypothesis could be described as a conjectural statement which could either be null or alternative that is:

Null hypothesis is represented by Ho; and alternative hypothesis is represented by Hi.

Ho:      Customers did not find it difficult to obtain credit from the bank

Hi:       Customers find it difficult to obtain credit from the bank

Ho:    Bank manager does not lend money without collateral security.

Hi:       Bank manager lends money without collateral security.

1.5            SIGNIFICANT OF THE STUDY

In recent times, a range of commercial bank have been distressed and same liquidated. The major cause of this problem could be traced to poor credit control and management. To reverse mis trend, this research work is very relevant and should be strictly adhered to also. If any country is to develop economically, socially and in other aspects, there is need for efficient money and capital market. The study will concentrate and focus on the control and recovery of credit granted to bank customers while it maintains its liquidity position.

1.6            LIMITATION OF THE STUDY

Time and resources have been the limitation of the research. This has caused us to limit our finding only to Sky Bank P.L.C, which is believed to the representative enough being a leading retail bank with several branches all over the country.

1.7            DEFINITION OF TERMS

1.     Bank: The bank is a commercial institution which performs various financial   activities   e.g.  Acceptance   and handling of deposit of its customers. 

2.     Borrowers: A borrower is a person who collects money or asset from the lender (bank) and who enters into legal agreement to repay the principal and interest in future period. 

3.     Banking industry: All banks in general, rendering banking service to the public. 

4.     Distress: Distress is the inability of the bank to meet the financial demand of its customers. 

5.     Industry: This is an enterprise where goods and services are rendered to the public in return for revenue. 

6.     Lender: A lender is a person (bank) who gives financial obligation (money) by way of loan or overdraft to the borrower (customer) to enable him fulfils certain aims and objectives relating to his business or domestic problems. 

7.     Liquidity Ratio: Liquidity ratio is the percentage of cash that the bank must hold in liquid form in order to meet the future demands of its customers. 

8.     Retail banks: Commercial Banks are otherwise known as retail banks because they can grant or accept as one hundred naira (N100) to or from their customers.

.

EXAMINATION OF CREDIT MANAGEMENT IN RETAIL BANKING SECTOR OF NIGERIA



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.NET

Researchwap.net is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.net guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.net is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.net" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.