ABSTRACT
INTRODUCTION
Every nation both developed and developing
economies requires money. Productivity which is the hallmark of all economy is
anchored on the availability of required fund. Fund which stimulates production
in the economy is managed by banks through their loan administration and
management; which must be liberal enough to produce the required level of
encouragement to both entrepreneurs and government. Moha (2006:110), said, for
any developing country to escape the vicious circle of poverty, there has to be
foresight and insight into the funding of entrepreneurial activities to
stimulate production in all sectors of its economy. One major constraint to
production in the sub-Saharan Africa, as opined by Adeniyi (2006:62) is poor
funding. Leadership be said, is the rallying point of all activities. This
vital point (leadership) the Central Bank of Nigeria recently took up headlong
to make commercial banks assume their proper place in the funding of production
activities in the economy. It means not only profit to the banks, but also
creation of new jobs and increased capacity utilization. Bank loan have to
affect different sectors of the economy, viz; Agriculture, Commerce, Mining,
Education, Industry and different services which yawn for holistic development.
Soludo (2006:08), lent his support to the above when he said, the heartbeat of
any nation is its diversified and effective production sustained economy. It is
a bull-wave against any external infiltration. Loan policy meaningfully framed
and religiously implemented is all that is needed to transform Nigeria. This
study has much impact on all and sundry. Development of the society, very much
lies on investment put into it. By virtue of loans and advances, a society can
be made vibrant and the economy monetized to accommodate all; that is, the
ordinary man can be uplifted to investment levels.
METHODOLOGY
The research has a survey design, which
evaluated the extent to which loan administration and management is being
carried in the banks currently and the historical design appreciates what had
been the extent of loan administration and management in the past. Both designs
are used to make deductions to the better credit administration management in
the banks. In the pilot study carried out on both senior and junior staff of
First bank and Intercontinental Banks, 20 questions were served, asking whether
they imbibed the culture of performance management. Out of the 20, 16 affirmed,
representing 80% of success in the population (P) while 4
(Q) dissented,
representing 20% of failure. P and Q are dichotomic: P + Q = 1. A sample size
of 397 was determined using Yamens method from a population size of 45678. With
status of staff as basis, stratified random sampling was also used.
Questionnaire was analyzed using percentages, mean etc. Hypotheses tested at
0.05 level of significance using Z-test.
RESULT
Several observations are revealed in this
study, but a few shall be named here as by way of summary. Loan administration
bears significant relationship with profitability in banks as confirmed by the
Z-test value of 33.20 against critical value of 1.96. There is significant
variation in the effectiveness of loan management among banks in Nigeria
confirmed by the Z-test value of 8.66 as against critical value of 1.96. Loan
beneficiaries are duly assessed by business connections. Loan credit officers
of banks are not always enriched with special seminars. Loan default or misuse
of loan fund by borrowers is singularly and severally caused by: inadequate
credit/loan analysis, loan diversion, outright fraud by beneficiary, collision
with bank officials, change of government policies, general economic downturn.
Manipulation of interest rates helps failure of loans. Most applicants for loan
(especially industry and agriculture) seek for long term while banks are
willing to settle for short term.
CHAPTER
ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
Nigeria as a developing nation is in dire
need of a vibrant economy anchored on productivity, which is in turn anchored
on liberal loan management and administration of Nigerian banks. According to
Moha (2006:110), for any developing country to escape the vicious circle of
poverty, there has to be foresight and insight into the funding of entrepreneurial
activities to stimulate production in all sectors of the economy. This function
has to be undertaken by the banks through effective and profitable loan
administration and management.
According to Lopez (2005:210), Japan was
one country known for making fake products. These products, he noted, have been
greatly improved as a result of liberal loans management and administration
from banks. In his own submission, Adeniyi (2006:62), said one major constrain
to production in the Sub-Saharan Africa, is the poor funding. Leadership, he
said, is the rallying point of all activities, which is far from policies. For
any economy to be transformed, there must be
efficient loan administration.
Accordingly, Moha (2006:181), opined that
bank is the center point of macro economic nexus because all productive
capacities in any economy hinge on its loan administration and management. Bank
loans which activate the economy are those that are channeled to productive
ends.
Ogwuma (1996:11), noted that the bane of
Nigeria’s dwindling economy is excessive dependence on imported goods which in
itself is a clear evidence of a castrated economy that cannot sustain itself.
Soludo (2006:08), in his submission noted that the heartbeat of any nation is
its diversified and effective production sustained economy. It is a bull-wave
against external infiltration. He added that loan policy meaningfully framed
and religiously implemented, is all that is needed to transform Nigeria.
Successful lending has direct effect on
economic growth and development on the economy. It means that not only profit
to the bank, but also creation of new investment opportunities, creation
DEFINITION
Loan administration means the range of
activities involved in extending a credit facility to a bank loan applicant
i.e. the borrower.
Loan management is the lending officer’s
responsibility to supervise, monitor and keeping close contact with the
borrower in his financial activities; culminating into planned visits, securing
the borrower’s periodic financial statements and reviewing requests for
additional funds (Roussakis: 1977.5)
1.2 STATEMENT
OF THE PROBLEM
The growth of any nation follows from the state of its economy. A
vibrant economy implies diversified investments which generate employment
opportunities. Macro economic environment is hinged on the state of the banking
sector. The government has a lot to control in the banking sector in
order to re-direct the economy to vibrancy through efficient loan policy and
administration. It is expected that the loan policy and administration should
encourage investment in all sectors of the economy.
Over the years, government has been
controlling the loan policies of banks to effect desired changes in the
economy. More often than not, these manipulations do not achieve maximum
targets. Also credit policies fail to meet the targets. Many borrowers often do
not apply the funds judiciously as stipulated in the loan policy. This has a
deterring effect on subsequent loan administration and management of banks.
Sometimes, banks fail to recover the face value of loans as well as the
interests. This drastically affects further loan administration. Some loan
policies may not be in the interest of the nation at large, in which case, the
Central Bank may be forced to directly effect policy changes.....
================================================================
================================================================
Item Type: Project Material | Attribute: 155 pages | Chapters: 1-5
Format: MS Word | Price: N3,000 | Delivery: Within 30Mins.
================================================================
No comments:
Post a Comment