Institute Of Management And Technology Enugu

INSTITUTE OF MANAGEMENT AND TECHNOLOGY ENUGU

TABLE OF CONTENTS

Title page:                =              =              =              =              i

Approval page:=              =              =              =              ii

Dedication:      =              =              =              =              iii

Acknowledgment:            =              =              =              iv

Abstract:          =              =              =              =              v

Table of contents:            =              =              =              vi

CHAPTER ONE

1.1      Background of the study:         =              =              1

1.2      Statement of problem:             =              =              2

1.3      Objective of the study:             =              =              3

1.4      Significance of the study:         =              =              4

1.5      Scope and limitation of the study:           =              5

1.6      Definition of terms:  =              =              =              6

1.7      Reference:                        =              =              =              7

CHAPTER TWO

2.0   literature review:      =              =              =              8

2.1   Government control over credit:               =              9

2.2   Types of loan offered by the bank:           =              10

2.3   Causes of bad debts:                        =              =              11

2.4change of bad debt:                    =              =              13

2.5   references:               =              =              =              14

CHAPTER THREE

3.0   Research design and methodology:          =              15

3.1   Research design:      =              =              =              16

3.2   Populations:           =              =              =              17

3.3   Types of data used:  =              =              =              20

3.4   Location of data:      =              =              =              21

3.5   Method of data collection:                =              =              22

3.6   References:              =              =              =              23

CHAPTER FOUR

4.1   Summary of findings:              =              =              24

CHAPTER FIVE

5.1   summary recommendation and conclusion:            25

5.2   recommendation:     =              =              =              26

5.3   conclusion:              =              =              =              27

5.4   Bibliography:           =              =              =              29

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

        In a modern Economy, there is a distinction between surplus economics units and the deficit economics units and in a separation of the saving investment mechanism. This has necessitated the existence of financial institutions whose jobs includes the transfer of funds from savers to investor. One of such institution is the commercial Bank.

        The commercial Banks are regarded as banks because they create money. They do this by establishing chequing account for their customers for whom they create demand deposited and pay out cash on demand.

        Traditionally, the essential features of a commercial bank lies on the service it renders to its numerous customers. These services basically includes deposite stabilization, credit management money transmission, and consultancy services etc. however their most vital function and which has a great impact on the economy as a whole is credit.

        The primary function of commercial bank is the extension of credit to worthy borrowers.

        Commercial bank are rendering a great financial services. Through their actions production is increased, capital investments are expanded and a higher standard of living is realized.

        Additionally, this functions are very important in that they distinguish bank from all other financial institutions and very unique position to manipulate the level and volume of demand deposite by limiting borrowing.

        Credit extension management is one of the most intricate function performed by banks. This is so because loan portfolio is the greatest risk in the banking activity. Hence if due care and prudence is not exercised, it might result in bad debts. Bad debts are normal business expense and must be charged as such when calculating the profit and loss for the period.

        Besides, business sin the other hand cannot exist without debt. It is now impossible to achieve any thing weather as an individual or as a group of person without going into some form of debt or the other. It seen to be generally agreed that debt is essential to business.

1.2   STATEMENT OF PROBLEM

        The volume and value of bank loans which have became classified has continued to increase even a faster rate than the increase in bank lending. This has adverse effect on banks since it effects their cash flow and impairs their profitability. It is believe that most debts go bad because of the inadequacy of loan management and recovery procedure of banks.

        The problem of this study is to appraise  the lending and credit management policies of a typical commercial bank union bank of Nigeria Plc with a view of finding the cause and consequences of bad debts in banks.

1.3   OBJECTIVE OF STUDY

            The main objective of this study is to appraise the lending procedure and loan management of banks using union bank of Nigeria plc as a test case with a view fof highlighting the effectiveness and adequacy or otherwise of