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Effectiveness Of Credit Management In The Banking Industry
[A CASE STUDY OF FIRST BANK OF NIGERIA PLC]
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1.6 DEFINITION OF TERMS
1. Overdraft: this is when a customer is given a limit within which his account may be overdrawn. Overdraft is granted normally for working capital purpose and amount is expected to fluctuate over the life of the facility, depending on the customer’s working capital needs at a given time.
2. periodic statistics: A periodic statistical return of customer’s account operation either weekly, monthly or quarterly helps in assessing the performance of the credit customer as well as detecting any danger signal
3. Advance: an advance is a short term loan extended period usually 30-180 days. Advances are normally granted for specific consideration e.g. payment of school fees. Settlement of medical bill payment of collection, bridging finance etc.
4. Daily balance: Keeping customers daily balances accounts as contained in the computer print-out or ledger balanced, provides a good tool in watching the movement of the account. Any unexpected or strange figure showing on a customer’s account should be investigated.
5. Long term loan: this loan is mostly granted for projects with longer duration such as oil exploration, real estate, equipment financing such as oil rings, computers etc. by the nature of such investment, their maturity is generally (ten) 10 years and above.
6. Medium term loan: this loan is generally granted for a single purpose such as investment equipment financing, housing, purchase etc. the duration of the loan is generally longer than overdrafts and range usually between 1 and 5 years.
7. Short term loan: There are loans made available for use for a period of (one) 1 year or less. The cost of short term borrowing in lower than cost of long term borrowings since a lender of long term long will have to wait further into the uncertain future to have his loan repaid. It is obvious that he will demand a higher rate of interest.
8. Contingent facilities: There are ‘non cash facilities of an contingent nature required by customers from their banker in order to facilitate their operations.
1.7 PLANS OF THE STUDY
This research work is divided into (five) 5 chapters, chapter one is the general introduction of the study, background of the study, scope of the study limitation of the study etc.
Chapter two the review of related literature of the study.
Chapter three disucsses the method used in gathering information and method of analysis.
Chapter four reveals data presentation, data interpretation data analysis and research findings.
The last chapter which is chapter five discusses summary, recommendation and conclusion.
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ABSRACT - [ Total Page(s): 1 ]ABSTRACTThe research work is basically concerned with the effectiveness of credit management in the banking industry. It will also discuss about the emergence of banking industry in Nigeria.The research will also discuss about the meaning, benefit of banking industry, purpose of banking industry, causes and types of lending and credit facility and tools used in loan monitoring and supervision.This research work will be divided into five (5) chapters in – order to have a better understandi ... Continue reading---
