Effective Management Of Loans And Advances

Effective Management Of Loans And Advances

Abstract

This exploration work on effective operation of loans and advances in Nigerian marketable banks is aimed at guiding fiscal directors in the lending and credit administration of banks in the trouble to effectively carry out on their functions. Secondary sources of data were the top instruments used; the data used were presented, analysed and reckoned in tables for easy references. This study shows that effective operation of loans and advances is the only way for banks to insure liquidity, profitability as well as their going concern. thus applicable ways and ways for effective lending are quested and explained in the course of this study for easy assessment. Because it’s a known fact that banks can only survive when its lending and credit administration is well managed, thus this work ended with major findings, which include; poor operation of loans and advances giving rise to high prevalence of bad and doubtful debts. The frequence, volume of loans and advances handled in marketable banks can drastically affect its effective and effective operation.

Chapter One

Preface

Background Of The Study

Marketable banks are “ retails banking institutions ” that accept deposits and make short term credit to the government, individualities as well as commercial bodies. Some of their functions include accepting deposit through current and savings accounts, granting of loans and advances, outfit leasing, loan syndication, fiscal advisory services, trade and expert backing, other investments and foreign remittance. The relationship between banks and other fiscal institutions in terms of functions, limits and modus operation are spelt out in the bank and other fiscal institutions decree 25( BOFIA) of 1991, which also permits trafficker, development banks and insurance companies to grant long and medium term loans.

Marketable bank loans and advances form one of the most economic and profitable business embarked upon by banks and as similar requires effective operation to insure good performance as well as return as at when due. thus, the success or failure of marketable banks in achieving their profit objects depends, to a large extent, on how well the loans and advances are managed.

Statement Of The Problem

It has been noted before, that granting of loans and advances by marketable banks is one of the most parlous businesses ventured into by marketable banks. This parlous nature of loan and advances is generally as a result of the incapability of borrowers to pay up their debts as when due and this problem leads to bank torture. The following abecedarian problems arise from poor administration of marketable banks loans and advances

High rate of defaults has redounded in the reduction of granting of loanable finances which in turn has contributed to the under- development of the Nigerian frugality through reduced profitable conditioning.

ii. The targeted earning of shareholder can be negatively affected due to badnon-performing loans.

The adding defaults and poor operation of marketable bank loans affect from the ineffective maintaining of loan proceeds in order to insure that it’s in line with the procedures.

Objects Of The Study

The special objects for the study are to;

i Know the benefits of effective and effective operation of loans and advances in marketable banks.

ii. Determine the cause of the present poor operation of loans and advances in Nigeria marketable banks.

iii. means the extent and depth of the poor operation of marketable banks loans and advances in Nigerian frugality.

Exploration Questions

1. What benefits are deduced by marketable banks through effective and effective operation of loans and advances?

2. What are the causes of the present poor operation of marketable banks loans and advances in Nigerian frugality?

3. To what extent and depth of poor operation of marketable banks loans and advances affect the Nigerian frugality?

Exploration Thesis

The following suppositions are formulated grounded on the over stated objects.

HO Poor operation of loans and advances don’t give rise to prevalence of bad and doubtful debts.

HI Poor operation of loans and advances give rise to high prevalence of bad and doubtful debts.

HO The frequence and volume of loans and advances handled by marketable banks can not drastically affect its effective and effective operation.

HI The frequence and volume of loans and advances handled by marketable banks can drastically affect its effective and effective operation.

Significance Of The Study

Banks are important in all economics, banks they grease development. The most important aspect of this exploration work is to know how to duly and effectively handle the business of lending and all the principle involved.

The knowledge of the effective operation of loans and advances in marketable banks are a sure way to the durability and growth of such a bank.

Also, effective operation of loans and advance prevents bank torture and liquidation.

Financially, this exploration intends to make a positive donation to the body of knowledge of finance and banking in Nigeria.