CHAPTER ONE

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1.1  Background To The Study

  The Bank is a financial Institution established to provide financial services of accepting deposit from customers, providing credit facilities and other auxiliary functions aimed at meeting the financial services need of the people and of facilitating the development and expansion of the real sector of the economy. Bank credit constitute an important source of providing finances to investors for the purpose of carrying out businesses and the creation of new investment to promote economic growth and wealth maximization both at the micro and macroeconomic sector. However the challenges of inaccessibility to loans and credit still persist in a larger dimension due to high interest rate, tight requirement for loan applications, non-conformity with the credit policies and sharp practices of some bank officals. Abasss A. Shiro (2004). The bank must utilize the granting of credit as an opportunity increase the supply of money to raise investment levels in the country. Therefore, it is  expedient   that bank  managers  should  be equipped with better information, principles and techniques required for effective lending rather  than regarding them as a mere guidelines which have limitation. Lending is highly subjective in nature, the final analysis depends on the judgment of the lender, hence in making final judgment, the lender must review all the techniques, principles, and knowledge acquired through environmental and projects analysis. The credit character and prospects of the borrower must also be scrutinized. Consequent upon the satisfactory fulfillment of the loan criteria the bank carries out the granting of loans to customers to meet the banks objective of credit lending and ensuring the attainment of low level of bad debt, profitability, customer satisfaction, and shareholders satisfaction, employee motivation and attainment of the general objectives of the bank. The research therefore seek to investigate Loan and credit administration: problems and prospect in deposit money bank in Nigeria (A Case study of first bank Nigeria PLC)

1.2  Statement of the Problem

Bank credit constitute an important source of providing finances to investors for the purpose of carrying out businesses and the creation of new investment to promote economic growth and wealth maximization both at the micro and macroeconomic sector. However the challenges of inaccessibility to loans and credit still persist in a larger dimension due to high interest rate, tight requirement for loan applications, non-conformity with the credit policies and sharp practices of some bank officals. Abasss A. Shiro (2004). The bank must utilize the granting of credit as an opportunity increase the supply of money to raise investment levels in the country. Therefore, it is  expedient   that bank  managers  should  be equipped with better information, principles and techniques required for effective lending rather  than regarding them as a mere guidelines which have limitation. The problem confronting the research is to proffer and appraisal of Loan and credit administration: problems and prospect in deposit money bank in Nigeria (A Case study of first bank Nigeria PLC)

1.3  Objectives of the Study

To proffer an appraisal of loan and credit administration: problems and prospect in deposit money bank in Nigeria (A Case study of first bank Nigeria PLC)

   The Bank is a financial Institution established to provide financial services of accepting deposit from customers, providing credit facilities and other auxiliary functions aimed at meeting the financial services need of the people and of facilitating the development and expansion of the real sector of the economy. Bank credit constitute an important source of providing finances to investors for the purpose of carrying out businesses and the creation of new investment to promote economic growth and wealth maximization

1.4  Research Questions

What is loan and credit administration?

What are the problems and prospects of loan and credit administration?

1.5  Significance of the Study

The study proffers an appraisal of loan and credit administration: problems and prospect in deposit money bank in Nigeria (A Case study of first bank Nigeria PLC)

1.6  Research Hypothesis

Ho The problems of loan and credit administration in first bank Nigeria PLC is low

Hi   The problems of loan and credit administration in first bank Nigeria PLC is high

Ho   The prospect of loans and credit administration in first bank Nigeria PLC is low

Hi   The prospect of loans and credit administration in first bank Nigeria PLC is high

1.7  Scope of the Study

The study focuses on the appraisal of loan and credit administration: problems and prospect in deposit money bank in Nigeria (A Case study of first bank Nigeria PLC)

1.8  Limitations of the Study

The study was confronted by some constraints including geographical factor and logistics.

1.9  Definition of Terms

An Investor:          person who invest money in a business, Customers of the

Bank who deposits money or buy share from the bank.

Debt:                     Payment which must be made but has not yet been paid to some

Body or institution.

Financial institutions:     These are the custodies of funds and those who raises

Funds for other investment.  Like banks and insurance                                           company’s Loan: Certain amount of money lent out to customers.

Monetary Policy:  This is policy initiated by government to regulate  the volume of money in circulation.

Credit Limit:  credit limit constitute the banks policy concerning the maximum level of credit to be granted to customers.

Global Banking: This connotes the interface of banking services  and products through information technology network, which is more customer oriented than traditional banking.

Credit Management: This involves planning and controlling collection of loan and advances in line with management corporate plan of maximizing shareholders wealth.

Distress Bank: These are banks with problems of liquidity. Poor earning

REFERENCES

Abasss A. Shiro (2004).LOANS AND CREDIT ADMINISTRATION

Dyers. L.S (1974) A Practical Approach to Bank lending Henry ling Limited

England.

Oyejide. A .$ Soyode. A. (1986) Commercial Banking in Nigeria Ibandan

University Press.

Prof. Don. M. Ike (1993) Problems Prospects of Debt Management P $ T

Business Time vol. 18 No 19 Lagos Monday. May 10.