THE PROBLEMS OF DEBT MANAGEMENT IN FINANCIAL INSTITUTION (A CASE STUDY OF UNION BANK PLC GARDEN AVENUE ENUGU)

ABSTRACT

This work on the problem of debt management in Nigeria financial institutions.  A case study of union bank Plc Garden Avenue Enugu, you see for some tears a lot of reorganization has been going on in nation’s financial system.  The appropriateness of a work into this area need not be over emphasis considering what is going on in the nation’s financial institutions

The distress bank issue is an offspring of the problems of debt mat in Nigeria financial institution.

Well union bank Plc was not one of distressed bank but then study has shown that debt management in financial; institution still faces a lot of problem as will be seen from the study carried out in union bank Plc garden Avenue Enugu.

In the course of this study, data were collection by means of face to face questionnaire blended with sparing interviews with the Advance department of the Bank.

TABLE OF CONTENTS

Title page

Certification

Dedication

Acknowledgement

Abstract

Preface

Table of contents

CHAPTER ONE

INTRODUCTION

1.1            Back Ground

1.2            Purpose Of The Study

1.3            Statement Of Problems

1.4            Scope Of The Study

1.5            Significance Of The Study

CHAPTER TWO

2.0            REVIEN OF RELATED LITERATURE

2.1     Debt and Debt Management Defined

2.2            Types Of Debt

2.3            How Banks Create Money

2.4            Common Causes And Problems Of Bad Debts

2.5            Fundamental Of Credit Analysis

2.6            Prudential Guideline In Nigeria N Banking

2.7            Minimizing Risk Associates With Bank Lending

2.8            The Need For Frequent Government Regulation

2.9            Short Coming Of The Traditional Method Of Credit Analysis

CHAPTER THREE

3.0            Research Design And Methodology

3.1     Method of Data Collection

3.2            Area Of Study

3.3            Population

3.4            Instrument Used

3.5            Method Of Data Analysis

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

CHAPTER FIVE

5.0            Conclusion

5.1     Summary of Findings

5.2            Discussion

5.3            Recommendations

5.4            Suggestions For Further Research

Bibliography

Appendix

CHAPTER ONE

INTRODUCTION

1.1            BACKGROUND

Financial institutions is that sector of the economy providing the community with money balances and payment up of banks and sector of the economy is made up of banks and non-banks financial institutions like financial house, mortgage house and other institutions that provide financial services and intermediation to the various segment of the economy.

In modern society, economic prosperity and progress depend largely on level of savings in the nation.   It happens that some one’s savings is made available to an investor for productive venture like what happens  in commercial banks.  When this happens a debt is created. A debt which has been described as an obligation to made future payment. It is against the borrowers promise to made future payment.  As a result of this the owners of these funds faces the risk of not getting their money in good time or losses it entirely when the custodian of these funds cannot mange then well hence debt management becomes a sing anon to guarantee the confidence of the individual depositor that his money is safe-debt management involves arrangement put in place for repayment of these credit facilities.

In the same vain it also fulfill a wider role in safe guiding the stability of the individual bank and thus the banking system as a whole. At this juncture ,the researcher will mention that this work is based on the constrains in relation with debt tagged the problems of management in Nigeria financial institution (A case study of union bank Plc Garden Avenue Enugu).

Recently, the banking sector undergo a traumatic experience whereby some banks were judged distressed, this however was a direct manifestation of improper debt management.

1.2            STATEMENT OF PROBLEMS.

The fundamental role banks and non-banks financial institutions is to intermediate between the surplus deficits sector of the economy.

Ensuring that inventible that will generate new valves at make the economy grows.

In performing this role, banks are exposed to credits risks, for instance, the possibility that the borrower will not repay the credit granted them when it falls due, or even fail  out right to repay paragraph when this possibility becomes a reality a bank is said to be set with problems of debt loan and other credit facilities this however has made financial

1.3            OBJECTVES OF THE STUDY

However, union bank Plc is not distressed but market failure is inevitable given the nature of banking.  As emphasized by (Dale 1984) the financial condition of a bank s not determine even by analysis with sophisticated techniques at their disposal, every important, since this problems are man made.

You will agree with me that all banks are faced with numerous problems in managing to do debt.  The research deemed it timely to do a research on these problems with a view to

1.       Study the credit administration in UBN with a view to identifying loose ends.

1.4            RESEARCH QUESTIONS

How knowledgeable are you in debt management issues?

To what extent have the effort toward debt recovering achieved result?

What are the reasons, you may consider responsible for the way your debtors are responsible to their debt management?

1.5            SIGNIFICANCE OF THE STUDY

The research paper on completion will be of immense importance to the following sectors of the economy.

1.       The Federal Government

2.       Banks and the other Federal institutions

3.       General public

4.       Other researchers

1.                             By this project work, the federal Government will appreciate the more how threatening bad debts problems loans are to the banks and other financial institutions.  The banking sector is not a mean sector especially when it is remembered that anything that affects it will conch revering other sector.  The knowledge of how much financial institution had been suffered under the weight of heavy loan default will make the federal Government to be more the federal Government to be more forth coming when suggestions are made on how to deal with the chronic defaulters especially the state government who engage in the practice of borrowing with reckless abandon.

2.                             General public this work will go a long way to adult the general public most especially the beneficiaries of credit facilities.  The borrowers of funds in these institutions to appreciate the need to repay these loans as at when due, bearing in mind that these money borrowed is some one’s also savings.  And also the need to involved these loans in a productive and revenue yielding ventures that will boost growth of the economy.

3.                             This work will also serve as a source of data or from the basis for other researchers who intend to carryout a further research on the topic.  It will help them in the literature review.

1.6            SCOPE OF THE STUDY

The subject matter of this research into evaluate the problems of debt management in Nigeria financial institutions.  In doing this particular reference were made to the union bank PLc Garden Avenue Enugu.  The period examined is from 1992 to date.  Nevertheless, references could be made to other banks just for the purpose of clarity and vivid under4stand of the subject topic

1.7            LIMITATIONS

The researcher considered precedent to limit the researcher to Eastern zonal offices of union bank Plc Garden Avenue Enugu.  This was done for the fact that the bank co-ordinates the activities of all the other banks branches within the Eastern region and time would not permit coverage beyond these limit.

Apart from the success made in carryout this stud it must not fail to disclose the descending attitude of the top management of union bank PLc.

The public relation officer and the operation manager who though welcomed me but cold not go further in giving me any useful information as regard my project topic because of what they call official top secrecy.

Likewise, respondents from Diamond bank Nigeria Limited, first bank Plc also felt that supplying certain information competitors, rather they refer you to their co-operated headquarters at Lagos or Abuja.

1.8            DEFINITION OF TERMS

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

bank who deposits money or but share from the bank.

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

body or institution.

Economy:   Avoidance of waste of money or funds.

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

funds for other investment.  Like banks and insurance company’s.

Loan:          Certain amount of money lent out to customers.

REFERENCES

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.