ABSTRACT
This
work was carried out to appraise credit management techniques in United Bank
for Africa (UBA) Plc, Gboko. Primarily, the work sought to find out the credit
management techniques adopted in United Bank For Africa (UBA) Plc. Gboko, to
trace the loads and advance granted by United Bank for Africa (UBA) Plc, Gboko
and to establish the relationship that exist between credit management
techniques and the performance of the Bank, among others. A survey research
method was used in the work and the data collected analysed using the
descriptive and inferential statistics. From the analysis, it discovered that
in United Bank for Africa (UBA) Plc, Gboko, the major credit management
techniques used are the appraisal, approved limit and installment disbursement
techniques. These techniques have
positive influence on the performance of the bank. The conclusion is that even
through the financial institution has high performance rating as a result of
the use of sound credit mismanagement techniques, the bank still needs to
improve upon its efficiency level by giving its credit management staff more
orientations on self discipline and adherence to professional ethics and by
reducing its organizational levels to reduce bureaucratic tendencies.
TABLE OF CONTENTS
CHAPTER TITLE PAGE
Cover
sheet ………………………. i
Title
Page ………………………. ii
Certification
………………………. iii
Dedication
………………………. iv
Acknowledgement
………………………. v
Abstract
………………………. vi
Table
of Contents ………………………. vii
List
of Tables ………………………. x
List
of Appendices ……….. …………… xi
- INTRODUCTION
1.1
Background Statement e ……………………. 1
1.2
Statement of the Problem ……………………. 2
1.3
Research Objectives ……………………. 3
1.4 Research Questions ……………………. 4
1.5
Research Hypothesis ……………………. 5
1.6
Significance of the Study ……………………. 6
1.7
Scope of the Study ……………………. 6
1.8
Research Assumptions ……………………. 7
1.9
Organization of Terms ……………………. 8
1.10
Definition of Terms ……………………. 8
1.11
Brief Historical Background and
Access Bank Gboko. 10
- REVIEW OF RELATED LITERATURE
- Preamble …………………………………..
12
- General Overview of Asset Prot-folio
of Banks … 12
- Concept and Nature of Bank
Credit………………… 14
- Lending Objective and Loan Policies of
the Bank …15
- Lending Process of Banks ……………….. 17
- Principle of lending ……………….. 17
- Theories of Bank lending ……………….. 19
- Types of Lending ……………….. 21
- Different types of loan and their
features …………. 23
- Credit
Management strategy ……………….. 38
- RESEARCH METHODOLOGY
- Research Design ……………….. 31
- Types of Sources of Data …………………32
- Method of Data Collection …………………32
- Techniques of Data Analysis …………………33
- DATA PRESENTATION, ANALYSIS
AND INTERPRETATION
- Questionnaires Distribution and
Collection……….. 34
- Credit Management Techniques ………………..36
- Trends of Loans and Advances granted
Access
Bank
Plc from 2007 to 2011 …………
38
- The Influence of Credit Management Technique on the Performance of Access bank Plc Gboko……. 39
- Difficulties Associated with Credit
management techniques in Access Bank Plc. …………
41
- Test of Hypothesis ………… 42
- Discussion
of findings …………
49
- SUMMARY, CONCLUSION AND
RECOMMENDATION
- Areas for Further Research …………. 53
Reference …………..
54
Appendixes …………..
58
LIST OF TABLES
Table Title page
- Questionnaire Distribution and
Collection 35
- Personal Profile of the Respondents 35
- Credit Management techniques at UBA
Plc Gboko 37
- Trend of Loan and advances of UBA
Gboko
2007-2011 38
- Influence of Credit management techniques used in UBA Plc 40
- Difficulties of Correlation Statistics for relationship between Credit Management techniques and volume of deposits din UBA Plc Gboko. 41
- Computation of Correlation Statistic for relationship between credit Management techniques and volume of loan advance exerted by UBA Plc to customers. 43
- Computation of Correlation statistic for relationship between credit management techniques and the amount loan advance (i.e. exerted recovered by UBA Plc Gboko)
LIST OF
APPENDIXES
Appendix
Title Page
i. Letter of introduction/instruction 58
ii.
Questionnaire on Credit management technique 59
CHAPTER ONE
INTRODUCTION
- BACKGROUND STATEMENT
Lending is one of the main functions
of the Banks. Banks extend credits to their customers in the form of loans,
overdraft and advances. The sum of these credits forms the debt or credit
portfolios of the financial institutions. Debts are presented as liabilities to
the customers as they are under obligation to pay interest and principal upon
maturity (Edwin, 2005).
One outstanding problem in lending is that some customers fail to pay the interest and principal as agreed in the loan contract. This constitutes a major risk element to Banks, shareholders and the financial system as a whole. Credit risk as noted by Ehbodaghe (1995) is the chance that those extended credit by an organization will not repay with the result that the moment, the risk with the largest loss incidence to Nigerian Banks. For example, at the end of 1990, total classified (bad and doubtful) loans and advances which could not be recovered by Banks stood at N11.9 billion. This represented 44.2% of the total Bank loans and 43.8% of total Banks shareholder’s funds Ehbodaghe (995).
Similarly, Adeyemi (2005) observed that as at June 2004, nonperforming assets (i.e bad debt) constituted 19.5% of total loans and advance granted by Banks in Nigeria. Situation as reported here hinders the performance pf many Banks in the country and cause distress in the system hence Banks require effective and efficient credit management strategies in order to cope with the environment. Personal observations over the years indicate that some Banks in the midst of this problems are still performing very well. This implies that such Banks have adopted more effective and efficient credit management techniques which give them competitive advantage over others. One of such banks is UBA. It therefore became necessary to appraise the credit management techniques of this bank in order to identify their strength factors and recommend same to the other banks for improved performance.
The focus of this work has been on an appraisal of credit management techniques in UBA Gboko. As noted above, the choice of this topic was informed by the observed high level performance and stability of the Bank.
CREDIT MANAGEMENT TECHNIQUES IN UNITED BANK FOR AFRICA (UBA) PLC. GBOKO BRANCH GESA PINGA
