1:3 OBJECTIVES OF THE STUDY
The objectives of this study is as follows
1. To examine how feasibility study affect loan repayment in the banking industry.
2. To highlight the extent in which diversion of bank loans to unprofitable ventures affect loan repayment.
3. To examine how distribution of loans affect banks performance if banks give proper attention.
1.4 RESEARCH QUESTIONS
Bank lending is said to be effective if it successfully achieves the banker‟s obligation of maximum liquidity to the depositors. The questions here are
1. To what extent does feasibility study affect loan repayment in the banking industry?
2. To what extent does diversion of bank loans to unprofitable venture affect loan repayment?
3. Does distribution of loans have effect on banks performance if given proper attention?
1.5 STATEMENT OF HYPOTHESES
A reputable credit management system enhances good control on lending and proper keeping of credit account.
HYPOTHESES 1
Ho. Inadequate feasibility study does not affect loan repayment in banking industry. Hi. Inadequate feasibility study affects loan repayment in banking industry.
HYPOTHESES 2
Ho. The diversion of bank loans to unprofitably ventures does not affect loan repayment. Hi. The diversion of bank loans to unprofitably ventures affects loan repayment.
HYPOTHESES 3
Ho. The problem of poor attention given to distribution of loans does not have effect on banks performance.
Hi. The problem of poor attention given to distribution of loans has effect on banks performance.
16. SCOPE OF THE STUDY
This study is aimed at analysing the credit management in the banking industry in Nigeria with a particular reference to First Bank of Nigeria plc. The study intends to analyse the credit facilities in banking industry. It also reviews the various concepts procedures for efficient and effective credit management. It examines the success and failure (if any) as well as recommending corrective measure.
1.7 SIGNIFICANCE OF THE STUDY
This study will be useful to the executive and managers in the banking industry and other financial institutions. This is because it provides guidance which will enhance effect and efficient credit management aimed at attaining and boosting maximum profitability and liquidity in their banks. The depositor (public) on the other hand will be more enlightened on the need to be honest and fulfil the responsibilities in credit transaction with the banks so that they can look up to improve service from the banks. Finally to the researcher, this is an eye opener because as a potential manager it will guide one in future on how to manage credit facilities.
1.8 DEFINATION OF TERMS
Below are the major terms used in the course of this research work.
1) BANKRUPTCY: A state where a person or firm is unable to meet their financial obligations.
2) MANAGEMENT: management is the study of decision-makers from the supervisor and line managers at lower levels to the Board of Directors.
3) LOANS AND ADVANCES: These are credit facilities granted by banks to their customers. They could be short, medium or long term depending on the length of period of repayment
4) OVERDRAFT: A credit facility (usually short term) granted by banks to current account holders and it carries interest charges on daily basis
5) BANK: Section 61 of BOFIA 1991 Act defines a banking business as business of receiving deposits on current account or other similar account paying or collecting cheques drawn by or paid in by customers.
6) CUSTOMER: A person is a customer if he or she has account with the bank.
7) FINANCIAL RATIO: These are ratios usually expressed in mathematical terms to test the financial obligations.
8) FINANACIAL STATEMENT: They are firm balance sheets, profit and loss account and classified statement which show the financial state of affairs of the firm.
9) GUARANTOR: A person or group of persons who stand for bank customers for credit facilities.
10) COLLATERAL/ SECURITIES: is an asset presented by a customer to his bank to secure a credit facility granted to him by the bank.
