The Impact Of Effective Credit Management On The Profitability Of Commercial Banks (A Case Study Of First Bank Of Nigeria Plc)

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Project and Seminar Topics with material for Banking and Finance

Project and Seminar Topics with material for Banking and Finance


This project work is dedicated to the almighty God the possessor of all knowledge for his mercies, love and kindness, and for the success of this project and academic accomplishment.


I am sincerely thankful to God for the success of this project. My special thanks goes to Mr. Ifeanyi Nwaokoro the project supervisor for his advice and directions to the success of this work, also to my H.O.D Mr. N.D. Uzoka who ensured that this work must be come to an end.

My undoubted gratitude goes to my parents Mr. and Mrs. Mathias Chukwu for their encouragement, financial and psychological support, also to my siblings for their support both financially and otherwise, especially my bro Sam for being there for me always, my gratitude also goes to my brothers’ wives and rest of my nieces and nephew for their understanding and to my friends who help me in different ways.


This study is focused on the impact of effective credit management on the profitability of commercial banks. The study is divided into Five chapters.

Chapter one deals with introduction, background of the study, statement of the problem, objectives of the study research question, statement of hypothesis, limitation of the study, definition of terms etc.

chapter two consists of general introduction of research topic and of literature review.

Chapter three deals with research methodology, research design and sources of data, population and sample size and method of data.

Chapter four deals with the data presentation, analysis and test of hypothesis.

Chapter five consist of summary, conclusion and recommendation which reveals that credit managers deal with various credit appraisal, effective management should be adopted for the profitability of the banks.

Table Of Content

  • Title page
  • Approval page Dedication
  • Acknowledgement
  • Abstract
  • Table of content

Chapter One

  • 1.0 Introduction
  • 1.1 Background of the study
  • 1.2 Statement of the Problems
  • 1.3 Objectives of the study
  • 1.4 Research questions
  • 1.5 Hypothesis
  • 1.6 Significance of the study
  • 1.7 Scope of study
  • 1.8 Limitation of the study
  • 1.9 Definition terms

Chapter Two

  • 2.0 Literature review
  • 2.1 Background of profitability to a commercial bank
  • 2.2 Principles and consideration to good lending
  • 2.3 Basis for credit formulation
  • 2.4 Comparative analysis of different forms of credit administration
  • 2.5 Problems to credit management and loan administration

Chapter Three

  • 3.0 Methodology
  • 3.1 Research design
  • 3.2 Sources of data
  • 3.3 Population and sample size
  • 3.4 Administration of data collection instrument
  • 3.5 Statistical data to be used in data analysis

Chapter Four

  • 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

Chapter Five

  • 5.0 Summary, conclusion and recommendation
  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • Bibliography
  • Questionnaire

Chapter One

1.0 Introduction

Granting of loans and advances of credit is one of the bank services of investment policies. Among the crucial growth process is the adequate supply of credit to the different economic units to carry on their activities efficiently and smoothly. There is therefore the need for transferring of funds from the surplus units to the deficit units of the economy. In the case commercial banks play a vital role in the allocation of financial resources of capital formation.

There are many opportunities for profit improvement since lending of money has been widely known and accepted as an important function of the banking industry (i.e commercial banks) a function which the industry is better placed to perform in view of its position as a finance intermediary.

It is generally accepted that lending is the most risky function perform by the commercial banks and it is therefore important that lending must be done effective and efficient.

In granting loans to customers, banks are expected to critically consider various factors which should enable them to assess the risk associated with the loan and the willingness and ability of the borrower to repay.

1.2 Statement Of The Problem

The following are problems associated with the study;

  1. Banks as financial intermediaries:Banks find it difficult to operate efficiently in the face of many borrowers.
  2. Banks as debtors:Banks owe the customers at any point in time, a duty to make funds available to depositors on demand.
  3. Banks as creditors:Banks find it difficult to properly assess and identify credit worthy customers which ensure repayment to guarantee equilibrium of funds flow.
  4. Commercial Banks as commercial Outlets:Banks owe as a duty to the shareholders to maximize profit.

1.3 Objectives Of The Study

Commercial hanks are general all purpose retail banks. They mobilize deposits of all sizes, both from the depositor and shareholders.

They lend these mobilized fund to willing customers for investment purpose as stated earlier, loans are the most important, most profitable and most risky asset of the banks; banks may be unable to meet their obligations to depositors and public confidence will be lost due to problems of loans. These problems of loan affect the liquidity of banks, reduce their ability to create deposit restrict further lending to prospective borrowers, which affects the profitability of the bank.

Therefore the objectives of the study are;

  1. To find out the best ways to manage loans which adversely affect the depositors’ bank.
  2. To find out the usefulness of the central bank credit guideline giving to commercial banks.
  3. To recommend possible ways of making credit policy guideline more effective and beneficial to both commercial banks and their customers.

1.4 Research Question

  1. Are there regulatory requirement for granting loan?
  2. Should the bank investigate the kind of business their customers are into before granting loans to them?
  3. Are customers classified based on their credit worthiness?
  4. To what extent can bank ensure that the borrowers’ funds are granted?

1.5 Statement Of Hypothesis

The following hypothesis are stated

  1. Hi: Banks have adequately finance project in our economy.
  2. Hi: Low interests have favored the borrowing customers.
  3. Hi: Proper training of credit officers leads to better relationship between commercial banks and their credit customers.

1.6 Significance Of The Study

  1. Loans are important as well as the lucrative assets of commercial banks credit.
  2. It is therefore important that credit proposals be properly articulated and evaluated right from the on set.
  3. It is crucial to avoid and minimize bad debts.
  4. The collection of vital information for lending and the analysis of the proposal cannot therefore be over looked to be less important.
  5. It should be noted that the risk element in credit proposal are usually not easy to qualify.
  6. Many banks today are not of business because of poor and bad credit management.
  7. This study is therefore aimed at providing an avenue for efficient credit management.

1.7 Scope Of The Study

The study of the effective credit management on the profitability of commercial banks will review to an extent the level at which the bank is fairing.

This study will also review how positive and unable the bank is in finding project through lending and how lending and borrowing has affected the profitability and liquidity of commercial banks.

The choice of united bank being necessary is that it has passed through all the era of banking policies and regulations in the country.

1.8 Limitations Of The Study

The study is limited to time. Information used are not all product of primary research but are largely obtained from banks and books. One of the major limitations is the respondents to the questions asked to the bankers who were not ready to reveal or disclose certain information concerning their banks to outsiders.

1.9 Definition Of Terms

Credit Facilities:

This include loans, overdraft, advances, commercial papers, lease, and guarantee etc. that is those form of credit connected with banks credit risk.


A credit facility extended by one party (lender) to another (borrower) subject to specific terms and condition agreed upon by both parties.

Problem Loan:

All types of credit facilities granted by banks to their customers for whom the customers are unable to repay within the agreed time and conditions.

Term Loan:

Credit facility granted for a period normally more than one year.


Money of goods that can be sold or repay debts


A promise usually in writing by one person to pay in the present future debts of another, such a promise must be made to the person to whom the debt is or will be due or paid.


Collection of shares or investment.


Goods or property pledged against money borrowed.

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How to nail it on the head during your project defence

You are through with writing that project. 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.

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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.

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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:

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Make Sure You Know Your Work:

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Prepare For The Questions:

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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.



Samuel Obiora Blessed is the CEO and founder of a.k.a Nigeria Students Media, the youngest engineering graduate of Federal Polytechnic Nekede in 2017 and the engine brain behind this great platform. He is the man behind the scene, filled with many potentials. A musician as well as a developer with the interest of Nigeria students at heart. If you need a professional website, contact him via WhatsApp or phone call @ 08143831497 to get the best.

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