Significance Of Bank Credit To The Development Of Nigeria Banks (A Case Study Of United Bank Of Africa Plc)
In a developing country like Nigeria, the significance of bank credit to a firm cannot be over emphasized.
It is there necessary that everybody known the roles played by banks through their credit in developing Nigeria firms and the economy of large.
Although many of use have heard about bank credit and we pass through the bank on daily basis, majority do not known the vital rate played in our fast developing Nigerians various types of banks credit that exist and how the investors apply these credits to the development of the nation’s economy.
In order to succeed in life, a man does not only work hard, but he also looks for means to improve on his work. These are situations whereby a man has all the skills needed to set up a business but does not have the means to the end of the whole show.
That is why we feed that it timely at this point that is why we feed that it timely at this point o let people know the investment and now this will lead to the development of the nation at large source of financing both small scale and medium scale.
Finally, many educated people do not know the procedures of obtaining bank credit. All the foregoing have therefore influenced and dictated the topic the significance of bank’s credit to the development of Nigeria Banks with special References to unit Bank for Africa Plc.
1.2 Statement of the Problem
Bank makes most of their profit from lending but there are some problems limiting the ability of bank to lend.
However, this study provides solution to the problem of bank credit and some of the problems are.
- Operation of central bank in regulating the volume of money of circulation for example the uses of Bank rate open market operation, special directive and cash deposit ratio.
- Inability of borrower the present acceptable security to bank.
- Unwillingness of customer to deposit their money in the bank.
- Unwillingness of members of public to borrow from the bank.
- High interest rate charged by commercial bank on loan granted to public.
1.3 Research Questions
The research questions on this study are:
Is there any relationship between high interest rate and incidence of bad debt? Bank DCO between 1894 – 1933
The dominance of these two British Banks was challenged in 1948 by the arrival of British and French Bank now called united bank for Africa Plc dominate early Nigeria deposit money bank. The foreign bank comes principally to render services in connection with international trade, so their relationship at that time was chiefly with the expatriate trading companies and with the government. They largely ignored the development of local African entrepreneurship. International Bank for West Africa is of the late Arrival among the expatriate banking Nigeria having been established in 1959, originally it was known as banquets international pour Afrogue accidental which has a number of consortiums of French and British banking interest and a principal finances of groundnut trade in neighboring Niger republic. These four expatriate bank have since been joined by many other varied national interest the banking sector in Nigeria has undergone significant trans for motion both in term of number and product creatively and the level of operation which was a result of economic return embodied in the structural adjustment programme (SAP) in 1986. in term of growth in the number of banks, the deposit money bank operating during that year were 12 with 27 branch nation wide, this number grew to 54 branches for the merchant bank in 2000 with the introduction of universal Banker’s in 2001. However, in 2003 and 2004 and 2004, the number fell to 89 and 87 respectively. In order to make Nigeria bank globally competitive, the central bank of Nigeria, July 6, 2004 announced a reform programme for national banking
1.4 Objectives of the Study
This study aims to examine the impact of bank credit to development of Nigerian Banks. Secondly to expose the prospective investors to various credit available in the bank which the banks are ready and willing to grant such investor require for the credit facility. The research also feels abliged to let the reader of the project know how bank, let the reader of the project know how bank, through it credit helps in encouraging small scale firms provided towards the development of the nations banks. they finally, after a thorough pursue of this project, reader will come to know who is qualified to apply for bank credit, the procedure for obtaining such credit and how such credit, must be applied. The project will not commend the bank for its service and give recommendation on where necessary, hence, thus who are business oriented but do not have the means or to execute such business, will arrive maximum benefits from the write up to the various bank credit to them and how it can be graded.
1.5 Research Hypothesis
There is one major hypothesis that forms the root of this study. The findings will lead to acceptance or rejection of this hypothesis.
- Ho: There is negative effect on significance of bank credit to the development of Nigeria banks.
- Hi: There is positive effect on significance of bank credit to the development of Nigeria banks.
1.6 Significance of the Study
The result of the study will be beneficial to different people in different ways. It will be beneficial to stakeholders in development banking industry, management and staff of the development – banking sector where achievement has been minimal.
The study will benefit the public who will understand the role played by development banking and use to apply for micro credit loans. It will be equally beneficiary to investors who applied for medium and long-term loan on how development banking finances capital projects. It will also stimulate new thoughts and ideas on how development banking in Nigeria carries out its activities
Finally, the study forms the basis upon which further research can be activated.
1.7 Scope and Limitation of the Study
There are many deposit money bank and financial institution that grant loan for the development of the nation’s economy.
The researchers intends to carryout research work on the significant of bank credit to the development of Nigeria Bank. Using united Bank for Africa Plc as a case study. However, the research work been limited as to insufficiency of fund.
However, effort has been made to ensure that the above limitation did not lender effective completion and quality of research work.
1.8 Definition of Terms
1. Resuscitate Ailing Industries:
This bank resuscitating ailing industries that can operate competitively in the country economy.
2. Local Source of Funds:
This are funds provided to the development bank by the federal government of Nigeria and the central bank of Nigeria.
3. International Sources of Funds:
This is a way by which development bank obtain foreign loans and grants from international agencies.
4. Absorption of Exchange Risk:
The bank provides facilities that will encourage the absorption of exchange risk encountered by funds users in respect of foreign dominated loans.
1.9 Organization and Plan of the Study
The research proposal of the topic, significance of bank credit to the development of Nigeria banks.
- CHAPTER 1 – Introduction
- CHAPTER 2 – Literature review
- CHAPTER 3 – Research methodology
- CHAPTER 4 – Lending against security
- CHAPTER 5 – Summary, conclusion, recommendation
Findings, Summary, Conclusion and Recommendations
This study investigated the significance of bank credit to the development of Nigeria economy. Using united bank of Africa (UBA) Ilorin branch as a case study. Questionnaires were administered to the bank (UBA) Ilorin branch. Data collected in respect of questionnaires were sensibly examined. It was discovered that the development of Nigeria economy, the findings also show how that many branch managers give out loan and advance to customer without properly going through the necessary steps for advancing loan many of the lending staff lack the lending skills, many of these staff do not acquire the skill I their jobs.
Deposit each banks internal regulation in its operation, some self centre greedy often over these guidelines when giving out loan to customer because of these and some other irregularities in perfecting security for granting loan, bank often found it difficult whenever there is a default in payment by customer. The most prudent loan extension is based on complete investigation and competent analysis. The willingness and the ability of the borrower to pay debts.
In the context of the project work, the significance of bank credit to the development of Nigeria economy. A case study of united bank of Africa, several aspects concerning the banks and their credit facilities were covered in order to address the projects student, professional and researcher on the importance of banks credit to the small scale firm and the effect it has in the nation’s economy at large.
It is aimed at examining commercial banks and their tending function and also serves as an exposition to the procedure for perfecting some for acceptable securities for bank credit that project exposed them to.
- The concept, principle and practice of banks credit
- The various method of applying and obtaining the banking credit
- The bank credit in relation for payment of custom dues
- Bank credit firms life wire
As an introductory chapter, it provides the foundation on which subsequent chapters will be developed it traced the historical background of commercial bank operation in Nigeria.
Chapter three provides an avenue to know the objectives of bank credit, lending guidelines, lend as securities and the significance of bank credit to the development of Nigerian economy.
Chapter four provides the profile of the case study (UBA plc. Ilorin) and also takes a look at UBA plc lending principle and some of the security acceptable at the bank
In conclusion, the chapter five provides, finding, summaries the whole projects work, conclusion and recommendation which were followed by the reference of projects.
The banking professional accepts responsibilities to the public to provide quantitative banking service and the banking sector has taken several measures to ensure high standard of performance on the past of its professional.
It is a known fact that companies can raise capital through the stock man either in firm of equity a debt. However, the availability of bank credits gives room for those who are talented and eager to commerce a good business but do not have means of putting such plan in motion to realize their goods of objectives thereby contributing to the development of the nation economy at large.
Thus, this has leased the lever of importation tends to turnout the nation into a dumping economy which tends to turn out the national budget. It has also contributed to solving the existing problem of unemployment. It has also enabled the nation to be self-reliance thereby contributing to the advancement of technology in the country.
This can be no gain saying the fact the bank credit has play a very significant role in developing the economy of our country Nigeria.
Having completed a project on a topic pf this nature “the significance of bank credit to the development of the Nigeria economy one is compelled to make the following recommendation which when either to ignore availability of bank credit to firms.
- The federal government should create more banks so as to serve the needs of these at the rural areas
- There should be seminar and workshop to enlighten businessmen on how they can approach the bank to solace when they need the bank credits.
- The central bank should make interest reasonable so that more customer w ill be attracted to loans
- The banks should advertise the availability of credits facilities in their industry to the general public
- The banker must advise the borrower to loan on how to make best use of the credit facilities obtained
- Finally, the bankers, customer relationship should be cordial.
Significance Of Bank Credit To The Development Of Nigeria Banks (A Case Study Of United Bank Of Africa Plc)
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