APPRAISAL OF COMMERCIAL banks SECTORIAL DISTRIBUTION OF LOANS AND ADVANCES
APPRAISAL OF COMMERCIAL BANKS SECTORIAL DISTRIBUTION OF LOANS AND ADVANCES
A commercial bank is a financial organisation or institutions that specialises in the safekeeping of money and other valuables as well as the provision of short-term loans and advances to individuals and corporations.
This project topic will highlight the basic characteristics of commercial banks and their potential to affect economic activities through the generation and distribution of loans and advances to their customers being the preferred and least desired sectors of the economy in Chapter I.
The second chapter will focus on the evolution of commercial banks, their functions, and the C.B.N. standards for loan and advance distribution to diverse sectors. It will also state the goals of commercial banks in terms of loan and advance distribution, which is profit maximisation.
Chapter 3 will be the approach I will use on the study topic, which is secondary data such as newspapers, textbooks, and journals to gather more information for the topic and to emphasise the topic so that I can benefit from it.
In Chapter 4, I will explain the discoveries related to the topic, such as the answers to the problems that Commercial Banks will face.
Chapter 5 will go over the topic's last features or parts, such as how commercial banks should follow the rules and regulations that guide them when lending in order to bring inflation to an end in our economy.
introduction TO CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
I became interested in this project's topic since the favoured sector of the economy is being marginalised in its attempts to acquire loans and advances from Commercial Banks.
Commercial banks have been the primary focus of monetary activity due to their ability to affect economic activities through the creation and circulation of money.
The Central Bank of Nigeria has long explored ways and means of mobilising funds for the country's economic development.
Despite having numerous instruments for managing and directing credit, the Central Bank has determined that credit guidelines are the most effective method for directing credit to specific sectors of the economy.
Thus, the government has succeeded in directing the sectoral distribution of loans and advances by Commercial Banks through the Central Bank.
Setting guidelines and expecting complete compliance is not always straightforward. standards have always been established to achieve certain goals, and such goals are always contingent on full compliance by those affected by the standards.
The Central Bank of Nigeria's recommendations on sectoral distribution of loans and advances aim to strengthen the country's productive sectors while also containing price inflation.
Commercial banks that are supposed to follow the Central Bank's standards have corporate goals of producing profits, but they also have auxiliary goals of meeting the needs of their shareholders, customers, and the government.
As a result, the research question is whether commercial banks will be able to demonstrate full compliance with the Central Bank's recommendations in light of the risk involved and the lending rates recommended for lending to favoured and less preferred sectors of the economy.
1.3 THE OBJECTIVES OF THE STUDY
The following are the aims of this research project:
a. Determine whether commercial banks make loans and advances to the chosen sectors of the Nigerian economy.
b. Determine whether commercial banks make loans and advances to the less favoured sectors of the Nigerian economy.
b. To determine which areas of the Nigerian economy are preferred and which are not.
1.4 THE IMPORTANCE OF THE STUDY
This study endeavour will be extremely beneficial to the academic community because it will stimulate future research.
It will also be extremely beneficial to the federal government of Nigeria, as the actions of commercial banks have an impact on the economy as a whole.
The study will also benefit the corporate world and clients who want to know why they are not granted long-term loans as requested.