LOAN RECOVERY PROBLEM IN COMMERCIAL BANKS OF NIGERIA
(A CASE STUDY OF UNION BANK NIGERIA PLC)
ABSTRACT
Loan recovery problems in commercial banks of Nigeria as a problem that is as old as the existence of commercial banks in Nigeria. This problem has caused untold havoc to the economic development of Nigeria and has further crippled commercial banks in Nigeria. The impact of loan recovery problem in commercial banks of Nigeria could be positive or negative. If it is positive it creates room for development in the financial sub - sector of the economy but the situation is reverse. The impact of loan recovery problem in most cases has been negative and its negativity is the barne of our concern. The after effect of this problem is distress of commercial banks in Nigeria. With respect to this problem it is pertinent to research into the problem of loan recovery in commercial banks of Nigeria. The impacts in the financial sub-sector of the economy and suggest possible measures to mitigate this problem so as to create room for development and growth in the financial sub-sector of the economy.
CHAPTER ONE
INTRODUCTION 1
CHAPTER TWO
CHAPTER THREE
HYPOTHESIS, METHODOLOGY OF STUDY,
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS,
DISCUSSION OF THE RESULT. 26
SUMMARY, CONCLUSION, RECOMMENDATION 36
Bibliography 45
Appendix 1 47
Appendix 2 48
CHAPTER ONE
INTRODUCTION
Loan is the extension of credit by banks to worthy customers and customers loan is the major source of generating funds Emeka (1996) for operations of the Bank by commercial banks. If these loans are not recovered the banks would fall short of capital for operations and this could lead to difficulties and problem while trying to recover the loan granted to a customer or (to customers). This also leads the banks to spending reasonable amount of money in other to recover their loans. Emeka (1996).
The aim of this project is;
1.2 THE RATIONALE OF STUDY
The primary function of commercial banks is the extension of credit to worthy borrowers. Adewunmi (1996). In making credit available, commercial banks are rendering a great social services through their actions, production is increased, capital investment are expanded and a high standard of living is realized. Loan recovery is very important to the Economy because it aids increased finance of agricultural, commercial and industrial activities of the nation. Although the investment activities of commercial banks are usually considered separately from lending, the economy effect and social resources are the same because government receipts are not always equal to expenditure. Temporal borrowings from commercial banks are not always recovered and this does not provide for smooth development of an economy. It is pertinent to research into the impact of these loans that are not recovered on the economy and suggest possible means of investigating them.
1.3 SIGNIFICANCE OF THE STUDY
The significance of the study is to appraise the benefits of loans if recovered. Thus is to examine the effect of loan recovery problem on the Economy, the Economy is faced with potentialities of distress from the financial subsector. The significance of this study is also to help to improve the lot or situation of the principal actors of the financial sub - sector of the Economy. This study would be useful to the following actors:
1.4 BACKGRROUND OF THE STUDY
Commercial banks differ from country to country but profit and banking involved are the same. They are organised usually along natural linear, their activities are of direct personal interest to the people who use them the shareholders (owners) of the banks. The aim and objectives of commercial banks are therefore geared towards satisfying there interest groups.
Commercial banks prepare grounds for their customers for making deposits and obtaining credits. In the same way that no business can flourish successfully without adequate working capital as commercial banks can really operate effectively and successfully without adequate deposit that gave rise to banking operation. The early bankers started by taking deposits from the public which they undertake to return or repay on demand and or as agreed. This has continued like that till today with an important innovation. The innovation is the realization from the early day of banking that only small proportion of the deposits made by customers were demanded or claimed from the bank at any one point in time provided that certain proportion was kept to satisfy the depositors with - drawal requirements and provided the bank continues to enjoy the depositors. The banker felt free to lend the balance. This act by the early bankers has metamorphosed into present day giving out are not recovered or fully recovered when an attempt is made. the impact may have lead to some hydra - leaded problems on the Economy.
1.5 DEFINATION OF TERMS
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THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE
Foreign Transaction For Dollars Payment :
Bank Name: GTBank
Branch Location: Enugu State,Nigeria.
Account Name: Chi E-Concept Int’l
Account Number: 0117780667.
Swift Code: GTBINGLA
Dollar conversion rate for Naira is 175 per dollar.
ATM CARD: YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANK SECURITY FOR GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY.
OR
PAY ONLINE USING YOUR ATM CARD. IT IS SECURED AND RELIABLE.
form>DELIVERY PERIOD FOR BANK PAYMENT IS LESS THAN 24 HOURS
CALL OUR CUSTOMERS CARE OKEKE CHIDI C ON : 08074466939,08063386834.
AFTER PAYMENT SEND YOUR PAYMENT DETAILS TO
08074466939 or 08063386834, YOUR PROJECT TITLE YOU WANT US TO SEND TO YOU, AMOUNT PAID, DEPOSITOR NAME, UR EMAIL ADDRESS,PAYMENT DATE. YOU WILL RECEIVE YOUR MATERIAL IN LESS THAN 2 HOURS ONCE WILL CONFIRM YOUR PAYMENT.
WE HAVE SECURITY IN OUR BUSINESS.
(A CASE STUDY OF UNION BANK NIGERIA PLC)
ABSTRACT
Loan recovery problems in commercial banks of Nigeria as a problem that is as old as the existence of commercial banks in Nigeria. This problem has caused untold havoc to the economic development of Nigeria and has further crippled commercial banks in Nigeria. The impact of loan recovery problem in commercial banks of Nigeria could be positive or negative. If it is positive it creates room for development in the financial sub - sector of the economy but the situation is reverse. The impact of loan recovery problem in most cases has been negative and its negativity is the barne of our concern. The after effect of this problem is distress of commercial banks in Nigeria. With respect to this problem it is pertinent to research into the problem of loan recovery in commercial banks of Nigeria. The impacts in the financial sub-sector of the economy and suggest possible measures to mitigate this problem so as to create room for development and growth in the financial sub-sector of the economy.
CHAPTER ONE
INTRODUCTION 1
- Problem Identification 1
- Rationale of study 2
- Significance of the study 2
- Background of the study 4
- Definition of terms 5
CHAPTER TWO
LITERATURE REVIEW 6
- Theoretical review 6
- Empirical Review 21
CHAPTER THREE
HYPOTHESIS, METHODOLOGY OF STUDY,
SOURCES OF DATA AND LIMITATIONS OF STUDY 25
- Hypothesis 25
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS,
DISCUSSION OF THE RESULT. 26
- Data Presentation 26
- Analysis of data 27
- Discussion of the result 34
CHAPTER FIVE
SUMMARY, CONCLUSION, RECOMMENDATION 36
- Summary 36
- Conclusion 39
- Recommendation 41
Bibliography 45
Appendix 1 47
Appendix 2 48
CHAPTER ONE
INTRODUCTION
- PROBLEM IDENTIFICATION
Loan is the extension of credit by banks to worthy customers and customers loan is the major source of generating funds Emeka (1996) for operations of the Bank by commercial banks. If these loans are not recovered the banks would fall short of capital for operations and this could lead to difficulties and problem while trying to recover the loan granted to a customer or (to customers). This also leads the banks to spending reasonable amount of money in other to recover their loans. Emeka (1996).
The aim of this project is;
- To examine the whether it is the low rate of loan recovery that is responsible for distress in banks.
- To examine the effect of loan recovery problems on the ability of banks to create credit and invest on other portable ventures.
- To investigate how loan recovery problems could lead to loss of confidence in financial institutions.
1.2 THE RATIONALE OF STUDY
The primary function of commercial banks is the extension of credit to worthy borrowers. Adewunmi (1996). In making credit available, commercial banks are rendering a great social services through their actions, production is increased, capital investment are expanded and a high standard of living is realized. Loan recovery is very important to the Economy because it aids increased finance of agricultural, commercial and industrial activities of the nation. Although the investment activities of commercial banks are usually considered separately from lending, the economy effect and social resources are the same because government receipts are not always equal to expenditure. Temporal borrowings from commercial banks are not always recovered and this does not provide for smooth development of an economy. It is pertinent to research into the impact of these loans that are not recovered on the economy and suggest possible means of investigating them.
1.3 SIGNIFICANCE OF THE STUDY
The significance of the study is to appraise the benefits of loans if recovered. Thus is to examine the effect of loan recovery problem on the Economy, the Economy is faced with potentialities of distress from the financial subsector. The significance of this study is also to help to improve the lot or situation of the principal actors of the financial sub - sector of the Economy. This study would be useful to the following actors:
- The customer: This study would help to make the customer conscious of his transactions with the bank and also to make him aware that loans disbursed to him if not returned may lead to the distress of the banks.
- The Bank: This study tries to evaluate how banks could better manage their resources and loans given out so as not to experience distress.
- The government; This study is to evaluate the expected role of government in her participation’s with the financial sub - sector of the Economy and they can positively compliment the efforts of the customer and the bank.
- Future research student: This study will guide future research student about the problem of loan recovery and subsequent suggestions they can make to mitigate the problem of loan recovery and banking sector.
1.4 BACKGRROUND OF THE STUDY
Commercial banks differ from country to country but profit and banking involved are the same. They are organised usually along natural linear, their activities are of direct personal interest to the people who use them the shareholders (owners) of the banks. The aim and objectives of commercial banks are therefore geared towards satisfying there interest groups.
Commercial banks prepare grounds for their customers for making deposits and obtaining credits. In the same way that no business can flourish successfully without adequate working capital as commercial banks can really operate effectively and successfully without adequate deposit that gave rise to banking operation. The early bankers started by taking deposits from the public which they undertake to return or repay on demand and or as agreed. This has continued like that till today with an important innovation. The innovation is the realization from the early day of banking that only small proportion of the deposits made by customers were demanded or claimed from the bank at any one point in time provided that certain proportion was kept to satisfy the depositors with - drawal requirements and provided the bank continues to enjoy the depositors. The banker felt free to lend the balance. This act by the early bankers has metamorphosed into present day giving out are not recovered or fully recovered when an attempt is made. the impact may have lead to some hydra - leaded problems on the Economy.
1.5 DEFINATION OF TERMS
- LOAN: According to oxford advanced learners dictionary of current English by A.S Hornby; This is a sum of money given out to the government; domestic and foreign.
- LOAN RECOVERY: This is the process or method used to recoup loans given out.
- INTEREST RATE: This is percentage charged by commercial banks and other financial institution for making loans available.
- BANK DISTRESS: This is a situation where operational activity of a bank is hundred and it can no longer continue to function.
- COMERCIAL BANKS: These are government or private owned banks that accept deposit and give loans and advance in retail or low scale.
- B.N: UNION BANK OF NIGERIA PLC.
Download our android mobile app for more materials
ORDER NOW
COMPLETE MATERIAL COST N2,500 Or $10. FRESH PROJECT MATERIAL COST 50,000 NAIRA FOR UNDERGRADUATE, OTHERS 100,000 -200,000 NAIRA.
THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE
MAKE YOUR PAYMENT INTO ANY OF THE FOLLOWING BANKS:
GTBANK
Account Name : Host Link Global Services Ltd
ACCOUNT NUMBER: 0138924237
Account Name : Host Link Global Services Ltd
ACCOUNT NUMBER: 0138924237
First Bank:
Account Name: Chi E-Concept Int’l
Account Name: 3059320631
Account Name: Chi E-Concept Int’l
Account Name: 3059320631
Foreign Transaction For Dollars Payment :
Bank Name: GTBank
Branch Location: Enugu State,Nigeria.
Account Name: Chi E-Concept Int’l
Account Number: 0117780667.
Swift Code: GTBINGLA
Dollar conversion rate for Naira is 175 per dollar.
ATM CARD: YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANK SECURITY FOR GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY.
OR
PAY ONLINE USING YOUR ATM CARD. IT IS SECURED AND RELIABLE.
form>DELIVERY PERIOD FOR BANK PAYMENT IS LESS THAN 24 HOURS
CALL OUR CUSTOMERS CARE OKEKE CHIDI C ON : 08074466939,08063386834.
AFTER PAYMENT SEND YOUR PAYMENT DETAILS TO
08074466939 or 08063386834, YOUR PROJECT TITLE YOU WANT US TO SEND TO YOU, AMOUNT PAID, DEPOSITOR NAME, UR EMAIL ADDRESS,PAYMENT DATE. YOU WILL RECEIVE YOUR MATERIAL IN LESS THAN 2 HOURS ONCE WILL CONFIRM YOUR PAYMENT.
WE HAVE SECURITY IN OUR BUSINESS.
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