Topic: PROBLEMS OF OBTAINING BANK LOANS IN NIGERIAN BANKS

Chapter One

INTRODUCTION

1.1 Background of the Study

Erasing enterprises is established with the assumption that the objective of every management is to maximize profit. And a very good example of the sector is the financial institution known as the banking sector. The phenomenal growth of banks following the introduction of SAP creates a fake impression that the banking sector is an all corners business. The banking and financial industry if unique in that it depends mostly on the public confidence and once the confidence is eroded on some banks, it may spread to other banks and institutions and this could be very dangerous to the whole system and the economy at large. It should also be noted as (Orji 1998) stressed that bank lending simply means credit creation and that implies that the profit maximization of the banks is mainly realized through credit creation, the bank authorities should abide by the rules and regulation of APEX Bank (CBN) i.e. lending to the worst unit sector of the economy and on a reliable collaterals. The research work will focus on the possible reasons for bank failures. In this regard of loan lending and loan recovery and effect of such on the rest of the populace plus how the financial industry could be transformed to meet the increasing challenges of the present day and finally assessing the role of the Central Bank of Nigeria in ensuring safety of bank loan.

1.2 Statement of Problem

1.3 Aim and Objectives of the Study

The issue of bank lending and its recovery strategies passed as a challenge to the financial sector in particular and the whole economy in general and as such the project work is carried out to meet the following aims and objectives. 1. To know if the increased administrative expenses can be eliminated by good lending policies. 2. To find out if default borrowers can be reprimated by serving a demand notice. 3. To ascertain how secured the collateral securities of these loan are. 4. To find out the extent of defaultness in the repayment of loan advances. 5. To establish the factors responsible for loan repayment in Nigeria.

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