THE IMPACT OF MANAGEMENT INFORMATION ON BANK LENDING DECISIONS

CHAPTER ONE

INTRODUCTION 1.1                          BACKGROUND OF THE STUDY

          Standard trust bank PLC commercial operations in August 1997 as a commercial bank with five business offices driven by a board of directors, a management team and staff focused on revolutionizing the Nigerian banking industry. Following the resolution of the board of directors at an extra-ordinary general meeting on 19th July 2002, the bank because a public limited company (PLC).  From the humble beginning, they have been able to record modest achievements, which makes the today one of the leading banks in Nigeria.

          Standard trust bank remains one of the most stable and consistently growing backs in the country.  Efficient assets actualization and management resulted in the growth of balance sheet size from #984 million in 1997 to #21,343 billion in 1999 and #69,945 billion by the and of 2001/2002 financial year.  The bank has a full range of banking services and products provided to delight their customer.  They include personal/corporate saving account, standard care account, personal/corporate current account.  Domiciliary account standard flexi-fixed account and so on.

          In any business outfit, be it government or privately owned, the moment of decision taking present challenges to the executives.

          Decision taking is a life wire of any organization as the future growth of the enterprise depends largely on the soundness and unsoundness of such decisions.  For the banking sector in particular, the importance of valid decision in enhancing it’s growth and profitability cannot be over stretched.  The banking industry in Nigeria is in a state of chaos.

          Most of the banks are classified as distressed, some of them have been liquidated while some are ordered to recapitalize or face liquidation.  The dangerous trend in the banking industry has sent a disturbing have to the national economy.  In a rapid reaction to salvage the banking industry and save the economy from collapes the government enacted the failed and established a tribunal to try the former decision makers and takers in the banks who have contribute to the banks failure.

          The utilization of management information on banks landing decisions will make a lot of impact in enhancing, banking growth and productivity.  The usefulness of management information cannot be restricted to the landly decision as it is very useful in all operations in the banks.

          Osisoma (1990) classified management information into three parts which include store-keeping information, attention directing information and problem solving information.  Management information contain such details as regard banks financial standing and long term.

Viability, some of the ways banks lend money are through banks overdraft and other advances it can make to various categorize of its customers.  Before banks land money they are interested in the ability of their customers to pay interested in the ability of their customers to pay interest on borrowed loan as well as their ability to refund the loan at the appropriate time.

          Management information is indispensable in granting such loan, overdraft and other advances also in monitoring the realized of the disbursed funds.  Before the decision are reached management information should be sought for to provide the choices as well as the outcome of the possible decision.  Having critically estimated the cost of each alternative and bearing in mind that the major aim of banks is maximizing profit, the management of the bank use the data and basis, provided in management information of in taking useful decision that is in line with the goals of the organization.

          Management information represent the real life situation of the banks, which can not be ignored in lending.  It is very useful in planning, co-ordinating and control, moreover, with management information every lending decision will be based on data that have first of all to be selected, verified and subsequently utilized for growth, profitability and viability of the bank.