ABSTRACT
This project work was under taken to bring out some of the problems encountered by banks a leading to their customers the result of their findings and the recommendation of how those problems will be tackled and the solution. We can find out that from this project, one of the major problems encountered by banks in leading the repayment of the loans. Borrowers especially the small scale farmers tacked away in the remote villages behaving that the loans they recurred are their share of the national cake’’ and they do not make any attempt to repay their loans.
This project being an analytical research data from secondary source were mainly used. The information came from CBN regulation, publication newspapers write ups and annual reports of some of the banks. My finding revues that most of the bank grant short term loans and they also regard the bank to prevent their statement of accounts if they do not have account with the bank to prevent a guarantor who will repay the loan if the customer were unable to met all these their requirements.
I recommend that the federal government should allow the bank a little more room to specified because most of the time when the central bank of Nigeria comes up with her credit guidelines she dose not take into consideration the loan demand situation in the areas in which various banks are located of economic situation where some banks hardly get customer.
PROBLEM IDENTIFICATION
SIGNIFICATION OF STUDY 5
RESEARCH OBJECTIVES 7
LIMITATION OF STUDY 7
LITERATURE REVIEW 8-31
IN COMMERCIAL BANK OF CO-OPERATIVE
AND COMMERCE BANK (NIG) LIMITED
IN DEVELOPMENT BANK OF (NIG) INDUSTRIAL
DEVELOPMENT BANK
IN MERCHANT BANK OF INTERNATIONAL MERCHANT BANK
RESEARCH DESIGN AND METHODOLOGY 52
SOURCE OF DATA /SECONDARY DATA
RECOMMENDATION AND COLLUSION 36-40
BIBLIOGRAPHY
Domestic bank lending bring out problems encountered by bank in lending to their customers, these statement reports the lending policy of a bank at a particular time, the bank activities and resulting profit or losses during the most recent period and the flow of resources occurring within the bank during the same period.
Furthermore, to the central bank of Nigeria this will be use to them because they have to adjust their already stipulated credit guideline central bank of Nigeria usually demands a minimum lending to earn sector but the merchant bank loan are mainly to the manufacturing sectors but they cant expand loans to these sectors because of CBN restrictive guideline before loans are given under the corporate impartment the purpose of the loan has to be stated, financial information has to use produced one of collateral is adequate export will be made to increase collateral offered by borrowers.
Domestic bank lending, more especially include the commercial bank merchant banks and development banks. As regards commercial bank it was observed that their prospective borrowers must have large amount of money in his/ her account before he could borrow money from them. And all these contributed a lot towards the problems facing domestic bank lending.
The period we witnessed in decline in the terms of economic activity in Nigeria due to the oil glut, this period witnessed declining oil revenue, choosing down of factories a show down on investment security of raw material and retrenchment. During this period, the government were involved in a lot of measures to revamp the economy and most of its policies where implemented through the domestic bank. From the economic activity decline overall, the level of domestic out put, which improved slightly in 1979, stagnated in their was a decrease in the money supply but bank credit increased that their by 1.408.3 million at 16. 6% increase compared with 1989.
In 1990, development was unsatisfactory, industrial production fill petrol production fill sharply due to the glut, but agriculture witnessed as improved by 3.4% credit by banks during this period increased by 50.8% to 10, 2685.5 million, the factor being credit expansion to the government. In 1992, there was a continuous decline in production compared to 1991 increase were minimal bank credit rose from 34.7% to 21.899.7 million, this was borne mainly by commercial banks whose loans and advance to the private sector increased to 10, 453.5 million
In 1993, economy was in severe mess. Agriculture decline because of natural disasters, this affected mainly all subsections industry plummeted pectoris closed down, crude oil out put went further down construction fill, but bank credit increased by 50% to 5.5million. In 1994, there was no significant change from the 1993 figures; the continuous decline was still there and government measures. Were basically the same? In 1995, the economy went into a depression but there was increased in GDP, which rose by 2.4% in contrast with 93/94 decline where there was a full in the increase of bank credit 4.9% compared with 10.5% lending was low at the beginning but plucked up in July to 32.7 billion.
With the economy talking its particular trend there. Came a cry for diversification of the economy which is heartily dependent on oil, the only why this could be solved was through loans by banks to the right sectors of the economy, the CBN and its regulations through her bank policies saw the need for the scope and nature of the bank policies for large urban banks, and changed considerably, social and economic changes outside of banking also accurate during the period. This is the goal and operational policies of this system and its related institutional structure was questioned on the grounds of her computability with the solution to a number of critical social and environmental problems. Especially in the rural areas, because of these changes it becomes apparent that more than a routine revision of the banks and to make their lending policy computably with social and environmental program banking in the northern of the Nigeria development machines, if the duly punctured the machines would eventually break down. Other that acting as banker to other banks in from of monetary policy circular now established us bankers generally orders subject to revered review yearly some recent ones being the placement of ceiling in the aggregate credit facilities that commercial bank can grant to the their customers, the regulations of the percentage of the total credit facilities to economy, interest churges
And commission by banks and indignation lending, because of this, I believe there became a need for a money of CBN policy guidelines to different banks as will as banks internal lending policy and effects on the economy during the 1990< 95 period.
The objectives of this paper are:
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