APPRAISAL OF THE LENDING AND CREDIT MANAGEMENT POLICIES OF A TYPICAL MONEY DEPOSIT BANKS
1.1 BACKGROUND OF THE study
1.2 STATEMENT OF THE PROBLEMS
In order to determine the causes and effects of bad debts in banks, the goal of this study is to evaluate the lending and credit management policies of a typical money-deposit bank (the Union Bank of Nigeria Plc). The portion of the extended full loan that has proven unrecoverable for one reason or another costs banks a lot each year.
Millions of Naira are lost by banks each year due to various bad debts, and despite efforts by bank management, the committee of chief inspectors, and the bankers committee, the wave of bad debts in banks is still of worrying scale. This information was compiled from a variety of literature evaluations on the subject.
However, when the new government cancelled the contract given to the contractors by the civilian government, numerous banks were hit hard by bad loans.
so they abandoned the project. Drought, little rainfall, and pest problems were some other experiences that resulted in low harvests and insufficient time for farmers to make loan repayment.
Once again, mistakes on the part of the bank's credit officers could occur. For example, there could be excesses of approved facilities, unformatted facilities, and expired facilities that weren't reissued in a timely manner.
Money deposit banks have always carried the burden alone, but this may change in the future as the banks may be unable to take the risk of lending more. However, when they do, they would seek the best way to come out of the risk with a realistic reward, which they are obviously failing to achieve at the moment.
1.3 AIMS AND OBJECTIVES OF THE STUDY
(i) To assess the lending practises of banks using Union Bank of Nigeria Plc as a case study, with the goal of emphasising the success and sufficiency—or lack thereof—of Nigerian banks' credit management practises in lowering the incidence and effects of bad debts.
(ii) To draw attention to the rate at which borrowers' poor provision of collateral security increases the occurrences of bad debt in Nigeria.
(iii) To ascertain whether fund diversion has any impact on the bad debt of Nigerian money deposit institutions.
(iv) To determine how much government intervention in money deposit bank lending practises has impacted the amount of bad debts in Nigerian money deposit banks,
(v) To draw attention to how badly done project evaluation affects the bad debt of Nigerian money deposit institutions.
1.4 RESEARCH QUESTIONS
A research topic must be developed in light of the effects of bad debt in Nigerian money deposit banks in order for the researcher to create statistical tables for testing hypotheses.
Has Union Bank of Nigeria Plc's bad debt been a result of borrowers providing insufficient collateral security?
2. Does the diversion of funds have any impact on Union Bank of Nigeria Plc's bad debt?
3. How much has government interference in money deposit bank lending practises affected bad debt at Union Bank of Nigeria Plc?
4. To what extent has Union Bank of Nigeria, Plc's bad debt been affected by faulty project evaluation?