1.9BACKGROUND OF STUDY
The banking industry has been known for its intermediary role in providing financial assistance (credit) needed in the economy. this role of financial intermediation is carried out in so many ways. First to be mentioned is the granting of loans and advances to customers which constitutes the major part of banking lending. Apart from loans and advances, other forms of bank credits like bond issued banks for and on behalf of their customers.
In providing credits or for business venture, banks should as a matter at important take all necessary steps to ensure that advances are granted to those customers who can and will make judicious use at loans so that repayment will not become a problem. Therefore credit must be made to people who are capable for utilizing it well and repaying back the loan at its maturity data. Affairs at banks can be explained by reference to the fact that “loan and advances are the large single item in the asset structure of Nigeria commercial banks; it also constitutes the major source at the operating income at banks and also the most profitable asses for the employment of bank funds.
According to Olashore, “credit (Loan and advances) are important to the bank balance, they account for a large proportion at banks income; such operating income produced from sound investment and effective management of such funds in credits enables the bank to:
(i)Pay depositors interest
(ii)Pay investors dividend
(iii)Pay government tax
(iv)Have further investment and
(v)Maintain adequate reserves.
The actual work in connection with the management and conversion of such funds into various types of credit facilities in an operating function is performed by the credit department of commercial bank instruct compliance by the “Board of Director” at the bank, lie annual credit policy guidelines and prudential guideline (1990) of the Central Bank of Nigeria (CBN) and other monetary and fiscal policy issued by the government of Nigeria. The credit department is usually headed by a loan officer manager who has acquired a high skill experience and personal judgement criteria in credit administration.
Medium - term loans and long-term loan including overdraft facilities.
TABLE OF CONTENT
Table of contentviii
1.1Background of study1
1.2Statement of the problem3
1.3Purpose/objective of the study6
1.6Significance of the study7
1.7Scope, limitations and delimitations8
1.8Definitions of terms9
Review of related literature12
2.1Definition of bank credit12
Research design and methodology28
3.1research design 28
3.2area of study28
3.4sample and sampling techniques29
3.5instruments of data collection30
3.6method of data presentation31
3.7methods of data analysis32
Data presentation and analysis35
4.1data analysis and test of hypothesis 39
Findings, recommendation and conclusion
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