“Neither a borrower nor a lender be” goes the popular saying. Deriving from the above saying is a simplicity that in the lender – borrower relationship, the lender who gives has had to face problems, basic among which is that the borrower might not honour his or her debt obligations.
By virtue of their highly recognizable and incontestable role in the process of engineering economic growth through the lending function, commercial banks are most vulnerable to this non-repayment phenomenon.
In the process of accelerating economic growth in Nigeria, as in other countries, commercial banks have served as most important institutions of resources allocation and financial intermediation between surplus and deficit economic units. However for obvious reasons of low level of capital formation in the country, emphasis of this purveying function is on lending, with its multiplier effect.
A second and consequent issue arises with due considerations to the primary motive of the investors in the banking business. The commercial bank owners desire profit and it is largely through the interest on their loans and advances that is primary profit is satisfied.
Thirdly, besides all the important lending role and profitability consideration commercial banks lending activities demand concrete understanding of the depositors’ position since a good part of their abilities goes into the loan portfolio ie. the liquidity considerations.
The foregoing vividly underscorses the causative role of commercial banks in the process of engineering growth as well as indicating the nature of their relationships with depositors. On the role of commercial banks as growth engineers. ORJI (1989) aptly stated.
“they are much more involved in the development of the economy than any other financial institution. Indeed, they have been and are likely to remain the dominant financial intermediates in Nigeria for they presently account for over 80% of the resources of the financial system, they therefore occupy strategic position in the economy and are more than most other units, able in all events to influence the course of development”.
Roles of resources allocation and profitability the commercial banks commit sizeable audits of their asset portfolio in the form of loans and advances.
1.2 STATEMENT OF PROBLEM
Deriving from the above introductory background is that loan losses among commercial banks have assumed some canker wormic dimension and demands serious “financial diagnosis”. Accordingly, it has therefore attracted the chagrin of keen observers of and commentators on, the financial systems who believe that it is a major problem which present day banks in Nigeria are facing. In fact, of recent “The bad debts in the banking system was estimated at N73 billion (this day of April 24,2005).
However, while there is a general wider standing of high rates of loan losses among the banks, augments in many circles highlight a higher magnitude of the losses among banks wholly owned or substantially controlled by government. This does not go to suggest a situation of no debts among the private banks, but
OTHER SIMILAR BANKING FINANCE PROJECTS AND MATERIALS
A CRITICAL ANALYSIS ON THE USE OF FINANCIAL STATEMENTS IN ASSESSING THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF FIRST BANK NIGERIA)
ABSTRACT This project work is carried out to examine the contribution of micro finance banks to the development of Small and medium scale enterprises in Nigeria. The Brass micro finance bank is used a...Continue reading »
A STUDY ON THE ACCEPTANCE AND ADOPTION OF THE CBN CASHLES POLICY IN PORT HARCOURT, NIGERIA
CHAPTER ONE INTRODUCTION 1.1. BACKGROUND TO THE STUDY One of the prerequisites for the development of national economy according to Ajayi et al, 2006 is by encouraging a payment system that is secu...Continue reading »
A STUDY ON THE IMPACT OF BUDGETARY CONTROLS ON THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF FIDELITY BANK PLC)
CHAPTER ONE INTRODUCTION 1.1. BACKGROUND OF THE STUDY AND PROFILE OF THE ORGANIZATION Following the uncertainties prevailing in the Nigerian business environment today, managers and stakeholders mu...Continue reading »
ANALYZING PERFORMANCE APPRAISAL TECHNIQUES IN UNION BANK NIG PLC
CHAPTER ONE INTRODUCTION 1.1. BACKGROUND OF THE STUDY In any evaluation of the condition necessary for the growth and survival of an organization, the role of performance appraisal is a strategic f...Continue reading »
AUDIT INDEPENDENCE: ENHANCING ACCOUNTABILITY AND TRANSPARENCY IN CORPORATE ORGANIZATIONS
CHAPTER ONE INTRODUCTION 1.1. Background of the study The subject of transparency and accountability in modern day corporate organizations has continued to receive attention as never before. It has b...Continue reading »
CREDIT MANAGEMENT AND ISSUES OF BAD DEBTS IN COMMERCIAL BANKS IN NIGERIA
The article on this topic (credit management and issues of bad debts in commercial banks in Nigeria) is an extract from literature review of the project material. The complete project work would be ma...Continue reading »
What are looking for today?
THE EFFECT OF TREASURY SINGLE ACCOUNT ON THE ECONOMY OF NIGERIA
37,636 people found this useful
THE IMPACT OF HUMAN RESOURCE PLANNING ON ORGANIZATIONAL PERFORMANCE
36,671 people found this useful
THE EFFECT OF SOCIAL MEDIA ON STUDENTS PERFORMANCE IN LEARNING LISTENING COMPREHENSION
33,363 people found this useful
TAX ADMINISTRATION IN NIGERIA: CHALLENGES AND PROSPECTS, A CASE STUDY OF LAGOS STATE BOARD OF INTERN...
30,412 people found this useful
CAUSES AND EFFECTS OF COMMUNICATION BREAKDOWN IN AN ORGANIZATION (A case study of champions’ brewe...
25,232 people found this useful
FACTORS AFFECTING LANGUAGE CHOICE IN A MULTILINGUAL SOCIETY
24,860 people found this useful