Debt Recovery And Debt Management In Nigeria Banks (A Case Study Of Fidelity Bank Plc)
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This project work is dedicated to the Almighty God who through his infinite mercy and grace has made it possible for me to attain this educational height.
Some of the best things in this project work couldn’t have been done without the help of the Almighty God for his enduring love, guidance and protection over me. I give all honors and praises to him.
At this junction, I must express my profound appreciation to MY SUPERVISOR, MR. J.U. OSUBOR for careful reading and introducing me into research writing I will forever remain indebted and grateful to him for immense assistance. I don’t know how to thank my parents MR./MRS. BENNETH ONWSONHY for their caring. I pray for the grace of God upon their lives in order for them to reap the fruit of their labour with long life. And my sibling especially my sweet sister Peace Onwusonye, I pray for God’ favors throughout your life.
I wish to thank my H.O.D, MR. KANU N.O.N MR. N.D. UZOKA and friends UZODIMMA JOHN AND ONWUJIOGU CHIGOZIE.
Finally, my thanks go to PASTOR GOSPLE OKOPRO who encouragement through this important point in my life I pray God will grant you your heart desires.
Table Of Content
- Title page i
- Approval page ii
- Dedication iii
- Acknowledgement iv
- Abstract v
- Table of content vi
- List of Table (if any) vii
- List of figures (if any) viii
- 1.0 Introduction
- 1.1 Background of the study
- 1.2 Statement of the problem
- 1.3 Objective of the study
- 1.4 Research question
- 1.5 Statement of hypothesis
- 1.6 Significance of the study
- 1.7 Scope of the study
- 1.8 Limitation of the study
- 1.9 Definition of terms
- 2.0 literature review
- 2.1 Introduction
- 2.2 Nature of bank debt
- 2.3 Causes of bank debt
- 2.4 Management of bank debt
- 2.5 Different school of though in debt management
- 2.6 Different types of debt management
- 2.7 Techniques for managing bank debt
- 2.8 Analyzing debt management in relation to organization working capital
- 2.9 Debt management in financing organization capital structure
- 2.10 Problems in the management of bank debt
- 2.11 Challenges in the management of bank debt.
- 3.0 Research design and methodology
- 3.1 Introduction
- 3.2 Research design
- 3.3 Sources/methods of data collection
- 3.4 Population and sample size
- 3.5 Validity and reliability of measuring instrument
- 3.6 Method of data analysis
- 4.0 Presentation and analysis of data
- 4.1 Introduction
- 4.2 Presentation of data
- 4.3 Analysis of data
- 4.4 Test of hypothesis
- 4.5 Interpretation of results
- 5.0 Summary, Conclusion and Recommendation
- 5.1 Introduction
- 5.2 Summary of findings
- 5.3 Conclusion
- 5.4 Recommendation
Actually, for every successful business there must be a debt in the sense that one person or customer must own the owner of a business. Banks are not exempted from this, this due to the activities involved in their operations.
Debts can be accrued as a result of bank over draft, frond and forgeries, borrowing and so no therefore banks recover these debts through the rules and regulations guiding the available sources of repayment of the debt.
The process of recovery is the cove of the management of bad debt as it is quite an unfriendly exercise carried out by the bank against default customers to forcefully retrieve the banks money. In recovery of debt, there must be consideration of the security position of the bank, borrowers, ability to pay bank the use of debt collections recover by legal preceding and so on.
Debt recovery can be described as responsible for the effective and economic planning and regulation of operations of an enterprise in fulfillment of a given purpose or task.
Failed bank recovery debt and financial malpractices defined debt recovery as a means of any loan, advances, credit, accommodation guarantees, or any other facility, together with the interest there on which outstanding and unpaid against a customers of a banks, do encounter problem between the customers for inability to pay. Besides, improper documentation, credit concentration, poor supervision of the funds can or way consequently make the bank be unable to meet its obligation.
1.1 Background Of The Study
The importance of banking in economic system singles out the industry for much heavier regulations than any other. Unlike many other economic activities banking industry involves with statutory activities that governs it practice and laws constitute it. The currant distress in banking sector been widely acknowledge arising primary form non performing loans which have been tarsal to a number of factors such as poor management, loan policy concentration of credit, credit information emphasizes on income growth and unsound judgment, found and forgeries etc.
Therefore, the federal government set up the Nigeria deposit insurance corporation (NDIC) to protect the customers, which would have resulted to a problem towards their operation. The Nigerian deposit insurance corporation (NDIC) was establish by decree No 22 of 1988, the banking system has been singled out for this special protection because of the vital role bank play in an economy especially in the process of economic development.
The federal government by decree No18 of 1994 establishes failed bank (recovery of debt) and financial malpractice tribunal which has the power to recover debt owed to failed bank.
Fidelity bank plc formally known as barcklays bank domino colonial and oversees an it became barcklays bank colonial and oversees in 1954. In 1995, barcklays bank domino colonial and oversees was granted license in 1960, regional managers were appointed for the administration of eastern, western and northern Nigeria region. As a result of the development the bank was able to open over 50 additional branches between 1959 and 1970, in 1987 fidelity bank of Nigeria has over 200 branches
The gross, earning has grown from #13.8 billion which showed an increase of 33% over the10.4 billion in 1997 profit before and after tax increase from #14 billion and #1.3 billion in 1997 to #2.1billion and #1.7 billion is September 1998 indicating an increase of 38% and 43% and respectively. Total assets increased by 27% from #81 billion in 1997 to #1,200 billion in 1998 while total deposit stood at #77.2 billion in 1998 representing an increase of 30% over #59.3 billion in 1997.
1.2 Statement Of The Problems
Debt has implication in the life of every banking sector. Poor analysis of debt recovery and debt management affects a firm adversely. It could be recalled that the effective capital structure of a firm emaciate from the ability of the financial manager and the management to blend debt with equity. It is pertinent to note that many banking industry have gone into compulsory liquidation due to poor analysis. Which leads to poor debt recovery and debt management. The cost of capital therefore shall be bargained with critical consideration of the organization internal rate of return (IRR). On the sale relationship, the credit term shall be determined with an absolute review of the overall banking environmental factor. While resisting debt for its risks, the goodwill of the customer shall not be overlookable entirely.
This work tends to deal in its relation with a banking sector. It brings about a number of problems which includes among other:
- The cost of capital in financing market is an extra charge to the banking sector such a cost eats deep into the owner’s funds.
- Secured debts do not only affect the liquid assets of the firm but also Dave to extend its effects into the fixed assets of the firm.
- Preference share has fixed periodic changes, which accumulates inconsiderate of wetter a profit is made or loss suffered. This gives a firm an adverse concern especially during unfavorable banking atmospheres.
- Inability to melt the financial obligation of a banking sector eventually lead to the organization liquidation, which is an economic death of the firm as an entity. In the banking treading policy, a firm tries as much as possible to minimize credit for the following reasons.
- It brings about bad debt, which is a deadly disease to a bank.
- Late settlement of debt in beating the stipulated credit return destabilizes the liquid stability on the firm and eventually leads to bad debt.
- Protracted debt denies the banking sector the chance of using their banking opportunities as they fall due. This project is not pessimistic to debt at all neither does it intend to criticize debt and anything about it, rather it delves into the problem management situation.
Despite the above, in the optical structure, some financial mangers commend debt financing for the following reasons.
- Difficulties in raising ordinary share capital.
- People reluctance to spearhead risks
- For expansion and speculative purpose, that debt funding is preferable since further use of equity may dilute the control of the firm.
- It may even affect the price of the stock properly handled. On the transactional terms absolutes refusal of credit for debt aversion has its own adverse effects.
- It reduces the sales volume and hence the profit prospects
- It affects the goodwill of banking hence firms in the face of its customer and degrades its inedibility in market scene.
- The firm can only stand in an absolutely monopolistic market and this is verily obtainable.
1.3 Objectives Of The Study
The objectives of debt recovery and debt management are:
- The capital structure of a firm
- The role of marketing manager
- How the financial manager decide on the organization credit policies
- The expansion and speculative objective
- The inability to melt the financial obligation of a banking sector.
- Difficulties in raising ordinary share capital.
These are the areas this work will look into and it will be of great importance to the interest group and prospective scholars on the field.
1.4 Research Questions
- How does debt financing bring about an optional capital structure in a banking sector.
- Will good analysis of trade debt recovery and debt management help measure an effective debts recovery in every banking sector.
- How dose the important element in decision ambiguity-surrounding concept of the cost capital.
1.5 Statement Of Hypothesis
In a continued effort to reach an appreciable equilibrium in the problem and consequences of debt and its effective recovery, we (researcher) employed a selected statistical to enable us reach a fair conclusion.
In the light of the above, therefore the following major hypotheses have been formulated. Hypothesis means a tentative statement made by a researcher, subject to tests with a view to forming basic to study of phenomenon. This hypothesis when tested can confirm or repute the extent at which these advanced statement can be upheld. It can equally place the researcher on the solid ground of drawing his conclusion and a subsequent recommendation.
- HO: Effective debt financing does not bring about an optional capital structure in a banking sector. (NULL)
HI: Effective debt financial brings about an optional capital structure in a banking sector (ALTERNATIVE)
- HI: Good analysis of trade recovery is a good measure of an effective debts recovery in a banking sector. (ALTERNATIVE)
- HI: Effective debt financing brings about an optional capital structure in a banking sector.
- Hi: Good analysis of trade debt recovery and debt management is a good measure of an effective debts recovery in a banking sector.
1.6 Significance Of The Study
- The role of the marketing manager
- The decision of the financial manager on the organization credit policies
- The debts prospect of the organization project is to be considered and a careful decision made to avoid setting off will a long loot.
- To strike of fair balance in their turn and risk of debt.
1.7 Scope Of The Study
The scope of the study covered was on analyzing debt recovery and debt management technique in Nigeria banking sector with much concerned to fidelity bank however, for further reference and clarify, emphasis are made from other reasons and these are consider vital, thus such emphasis are an profitability, solvency, flexibility, conservation and control.
1.8 Limitation Of The Study
Analyzing debt recovery and debt management situation is not a shallow topic to be handled haphazardly, it is not only technical but also sensitive and broad.
For the purpose of this project, it is restricted to be banking sectors it excluded every non-business concern also for want to time resources, fidelity bank is sampled out as a base for the research work so many factors are dermal to militate quicker and easier completion of this work.
These include among others:
Inadequate fund may stunt this work beyond our taste. Lack of fund (money) may also affect not only the period of the research but also its quality. To exults everything about analyzing debt recovery and debt management situation and come out of legacy for the posterity, one needs to travel far and near. At least one ought to touch various industries in the four basic geographical area of the country.
Time is as costly as money, it is ever easier facing financial problems than time. Time lost as hardly regained. Financial markets do exist but time existed for time. With the school academic leader, the period for the research work is tool short, putting other courses into the budget.
Reluctant To Cooperate:
The recovery of some banking sectors are two reluctant to disease the required information and more so, when it comes to disclosing or exposure of the organizational books record- the idea equally affected the quality of facts given in the research. Some do piths pact to suit their firm.
1.9 Definition Of Terms
Money or something owned by or someone. It is a liability or an obligation.
One who owns the liability or obligation
The process of planning organizing lending, and controlling the work of organization member and of using all available organization resources to reach stated organization goals.
Trust or confidence in a buyer’s ability intention to pay at the same future time, exhibited by out resting his with goods and services without present payment.
The risk bearing portion of the long term capital of a banking sector.
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How to nail it on the head during your project / seminar defence
You are through with writing that project / seminar. Now what?
You have found yourself at that point where you have to defend what you have written. Of course you have to stand in front of your supervisor and other literary personalities to prove that you know what you wrote in your project paper. Unfortunately, the more you think about it, the more it looks like you are about to face a legion. It is not a war. But the emotion of dread welling up inside of you makes it look like one. So now you are asking yourself questions.
- How am I going to start?
- I hope I will do well enough to get an A.
You really want to nail it, but you need to come to terms with exactly how to get everything in perfect control. Especially your emotions of fear that seem to make a wreck of you every time you think about public speaking.
So here is the deal. I want to help you avoid that feeling that would ruin your precious moment if you dare to let it. And we are going to do it together.
I am going to highlight some very important tips to help you get in control for you to be comfortable enough to move from that feeling of DREAD to CONFIDENT; and making an awesome Impression for that great rating your supervisors should be giving to you so freely.
Consider these tips as you prepare for your defence. We will be taking them one after the other so here we go.
Watch Your Body Language And Keep It Confident:
Can you tell that a person is falling apart if they look confident? … If I can second guess you rightly, am sure you answered no to that question. Remind yourself that you need to come out that way. Now this might seem like a huge big deal when you are dealing with the foreboding. Maintaining a poise of confidence is very important. So find your most comfortable position, sitting or standing and draw up your body. You must exude confidence. It is something you need to do for yourself. People can only see what you allow your body language to show. So you must endeavour to put that out. Remember the story of David and Goliath? … At the end of your defence day, you want to be David.
Dress In Your Most Comfortable And Impressive:
Am sure this one is a no brainer. However I must highlight that you choose comfortable pieces. You don’t want to look so good and yet look like you were forced to wear something that does not belong to you. It’s great to ensure that as impressive as your clothes are on you, that they are also very comfortable.
Speak With Authority:
Going hand to hand with that aura of confidence is your most powerful asset:your words. If you look that confident, your words must not come out like whimpers. To be able to pull this off, you definitely need to speak as deliberately as possible in expressing yourself. Let them also hear what they see.
Use, Your Gestures:
I have often found this to come to my rescue in dealing with shyness and conveying my confidence. Usually it gives you an edge to also drive home your point. You must, however, ensure that you do not over use it. It doesn’t mean that your hands should be flying all over the place. That would be absolutely unnecessary. If you do this well, after a while you will realize that you are not as self-conscious as you used to be at the very start. For most situations, it would have completely disappeared altogether; leaving a really confident you talking.
Have A Good Opening And Closing Line:
Make sure you have perfected a good opening line. You should also be armed with a good closing line too. Try and rehearse it to a friend. If for the first time you presented it, your friend does not say “wow, that’s beautiful” or something like that; just know you need to keep refining it until you get the perfect line. Both opening and closing lines will go a long way in how impressed your panel gets to rate you high.
Make Sure You Know Your Work:
Certainly you should understand how important it is to know your own work from start to finish. Not having in-depth knowledge of your own work is tantamount to a suicide mission. Why should you kill yourself?
When all is said and done, this is what you came to defend in the first place. You should know your work from A to Z.
Prepare For The Questions:
Now this part is truly essential. You must be sure you do not floor all the good work you did on your presentation by not answering correctly. You must pay attention to the questions you are asked to be sure you will give the right answer. Many people get it wrong at this stage and spoil their good presentation. When you do not understand any question do endeavour to ask the person to expatiate what they mean before you answer.
These tips are by no means exhaustive, but applying these tips will give you some necessary advantage you need for a great outcome. Of course that outcome would mean that you eventually earn all your points on this project.
The structure of a good project work
Undergraduate projects in Nigeria is a prerequisite for graduation amongst Nigerian tertiary students who will which to obtain bachelors degree in their respective courses of study such as accounting, banking and finance, business administration and a host of others. Writing an undergraduate project in Nigeria for final year students entails a lot both financially and otherwise. Being able to develop any final year project depends on getting a researchable topic whether it is Accounting Undergraduate project topics, Banking and Finance research topics or banking and finance project topics and materials and it all requires diligent hard work of students who are willing to develop best undergraduate projects in Nigeria and graduate in flying colors.
A typical Undergraduate project in Nigerian tertiary institutions can be said to be divided into five or six chapters depending on the format of the school and course of study which are
The introduction of an undergraduate project states the main research problem and research argument. What precisely the study is all about and why it is important. It looks at the originality of the research work and how it will fill the gap in other studies. Justification for a research undergraduate topic should not be lengthy before it has been explicitly stated.
Below are the contents in chapter one of an undergraduate research project which includes;
- Background of the study,
- Statement of the problem,
- Objectives or aims of the study,
- The research questions,
- Research hypothesis,
- Significance of the study,
- Scope of the study,
- Limitations of the study and
- Operational definition of terms.
2. Literature review
Literature review of any undergraduate research work, be it business administration project topics or Economics project topics just to mention a few is very critical to securing a high grade in one’s project work. The literature review of a research process uncovers what other writers have written about the student’s topic. A student’s undergraduate research work should include a discussion or review of what is known about the subject and how that knowledge was acquired. The review could conclude with a brief summary of the literature and its implications. The contents of the literature review are the theoretical review, conceptual framework, empirical review and summary of literature review.
3. Research Methodology
This section includes a description of the research methods used in the undergraduate research work such as the sample size, data collection methods, measurement instruments, research data analysis procedures and the population from which the sample was selected. This section also describes the method used in selecting the sample or samples, validation and reliability of the instruments used in the research work. There are different research statistical techniques used in undergraduate research work such as SPSS, e-views etc.
4. Results & Discussion
This section presents and discusses the data analysis results used in an undergraduate research work, the results of each analysis is being summarized, tabulated, and then discussed for each research question. Then for each research hypothesis, the statistical test of significance selected and applied to the data is briefly described, followed by a statement indicating whether the hypothesis was supported or not supported. In presenting the result analyses/summary in an undergraduate project tables and figures and or graph are used to add clarity to the presentation.
5. Summary, Conclusions And Recommendations
This section summarizes the findings of the study in an easy to understand manner. It also explains the practical implications of those findings, and points to recommended directions for future research in that area.
This is where every source cited in the undergraduate research work is being included. Every undergraduate research work must be properly referenced for its authenticity.
Choosing A Good Project / Research Topic
Students in Nigerian universities these days wish to choose a very simple project topic/material. There is no issue choosing a simple project topic; the only problem is your ability to choose a good project or research topic that your supervisor will easily approve for you.
Most project supervisors really want to see how good his or her project student understands his or her surrounding through the kind of topic he or she chooses for their project work.
There are some project topic that are not reject-able; for instance in Nigeria of today; what do you think is the major issue on ground now?
If a project student can choose or craft a topic on the effect of dollar increment on the economy of Nigeria. Such project topic will be very interesting to write on.
Now what are the qualities of a good project topic?
- The materials for the project topic must be easily assessable.
- The project topic itself must be meaningful.
- The variables must be able to give a clear aim of the project topic.
What do I mean by variable?
Well I am deriving my point from the area of ; the variables here are those main words in the project topic.
Like the above project topic; the effect of dollar increment on the economy of Nigeria. You can see the main variables that really define this project topic are:dollar, increment and economy.
Before you present your topic to your project supervisor, first of all understand your project topic, and then secondly try to do some research for your topic to see if at least you can get up to 60% of what you need to write the complete project.
I said that above because you might have a very nice topic that the materials are not available online and there are no books as regard the topic; in this case the project topic becomes difficult for you even though the topic is catchy.
What do I mean by your topic being assessable?
Well what I mean is very simple and easy to understand. Simply pick your project topic, type it on google and see if you will have at least a good background for the topic you are writing on.
If you can have a good background for your project topic and you can understand the problem associated with the project topic, then I believe the aim of the project is not far-fetched.
Structure of a Seminar Paper
I feel like there is a lot of stress out there among grad students about writing seminar papers, especially when we’re told that our goal should be to make an original contribution to the field. That idea can be quite intimidating when we’re just starting out. It feels like you’ve asked us to jump off the deep end of the pool and we don’t know how to swim.
I think part of the problem is that we’re still working out how to structure seminar papers.** Each paper we write is another step closer to a successful, effective, and effective paper; however, we’re still flailing our arms (and other miscellaneous body parts) around because we’re uncertain of exactly how to go about it. I realize, of course, that there is no one right answer. However, below is my suggestion at sticking your toes in the water.
Section #1 — Introduction
Provide a little bit (or a lot) of motivation for the reader to read your entire paper. Failing that, your reader should know what the paper is going to be about by reading your introduction.
Paragraph #1 — Get some attention.
- Provide a context by citing a recent text in the field — the point that is cited may or may not be the main point of the text — it is what jumped out at you.
- Set-up broader context of what you’re going to do
Paragraph #2-?? — Define issue and the gap.
- Define issue and any key terms
- Limit scope as necessary
- Establish significance of issue
- State problem by defining the gap
- Explain how present research attempts to fill the gap
- Outline contributions (readers will see lit review for more detail.)
- End with thesis and preview organization of the rest of the paper
Section #2 — Literature Review
Give some credit where credit is due.
- Indicate the current state of the issue/problem/topic
- Define or qualify terms
- Engage sources in conversation with each other (don’t just copy in annotated bib)
Section #3 — Argument / Discussion
As stated in the Allyn & Bacon Guide to Writing:wallow in those complexities!!
- Examine issue
- Argue how issue can be mitigated, mediated, or mashed
- Provide evidence and support
- Make some lively commentary along the way
Section #4 — Conclusion
We’re almost done. Don’t quit now.
- Summarize research question
- Qualify argument/discussion if you need to
- Explain where we go now
- End well
Section #5 — Works Cited
Is everything listed on the works cited?
Tips: it’s ok to use sub-headings to keep yourself organized.
Tips On How To Know What Your Supervisor Is Looking Out For In Your Project
Apparently all schools/colleges ask their undergraduates especially the final students to write their final year project before they are certified to be graduates. These projects are mostly discovery activities geared towards problems solving or basically to make new discoveries or better still have a better understanding of a problem with the aim of proffering better solutions.
With this assigned task an undergraduate will need an advisor, a counselor or a supervisor to guide and direct this activity for a desired result and a successful ending and of course, in return the supervisor have factors to look out for in a student project, so that the aim of the project writing will not be defeated.
As a final year student planning to write your final year project, there are some factors you need to consider when trying to have a good working relationship with your supervisor and you must have the below tips at your fingertips to know what your supervisor look at for in your project.
Selecting the right topic or title:
The supervisor would want to know how knowledgeable one is, in a chosen topic and how far one can go with the topic by asking one diverse questions which could be simple or a bit tough. So one thing is to choose a right topic and another thing is to be knowledgeable about the said topic.
The relevancy of the project topic to the degree course:
This is one of the important things a supervisor looks out for in a project. A final year project must have a purpose and objectives and most importantly be problem solving and must be related to the course of study. So a project topic should be relevant and interesting.
The realistic plan for the project:
A project supervisor will always look at how realistic a project topic is. Will the project aims be achieved and at the specified time. If it will outlived the specified time such topic might be dropped and a new topic adopted to run the set time and fulfill its purpose.
Quality of research materials available:
Another factor a supervisor will consider in project writing by a student is the quality of the materials available for research on the chosen project topic, can materials and information be readily available and are those materials of high standard and convincing not just bogus and fictitious analysis but materials that research has be carried out by scholars related to course of study. So a source of materials used for a project is very important and most supervisors look out for this.
The funding channels:
Almost all project writing needs a good amount of funding to achieved the desired aim, A supervisor would always want to find out how the project will be funded, so as not to have hitches when the project is on. So to have a smooth working relationship with ones project supervisor, the funding of the project must be considered and revisited from time to time. Because a supervisor will look out for this aspect too.