TABLE OF CONTENT
Title
page i
Certification ii
Dedication iii
Acknowledgement iv
Table
of content vii-viii
CHAPTER ONE
1.0
Introduction 1-2
1.1
Statement of the problem 3-4
1.2
Aims and objectives 3-4
1.3
Scope of the study 4-5
1.4
Significant of the study 5
1.5
Limitation of the study 6
1.6
Research methodology 6
1.7
Research question 6-7
1.8
Definition of terms 7
CHAPTER TWO
2.0
Literature review 10-27
2.1 Prudential
guideline analysis of effects of bad debt 28
-30
2.2
Implication of bad debt to organization
staff customers and shareholders 30-33
CHAPTER THREE
RESEARCH METHODOLOGY
3.0
Introduction 34
3.1
Source of data collection 34-36
3.2
Methods of data collection 36-37
3.3
Methods of data analysis 37-38
CHAPTER FOUR
PRESENTATION ANALYSIS OF DATA
4.0
Introduction 39
4.1
Effect of recoveries on profitability of
a bank 39-40
4.2
Analysis of recoveries to profitability 41-44
4.3
Recoveries strategies 44-47
4.4
Analysis of bad debt to loan and
advances portfolio 47-49
4.5
Analysis of bad debt to total assistant 49-51
CHAPTER FIVE
SUMMARY, CONCLUSION, RECOMMENDATION
AND SUGGESTIONS
5.1
Summary 52-54
5.2
Conclusion 54-56
5.3
Recommendation and suggestions 56-58
Bibliography 59
CHAPTER ONE
1.0 INTRODUCTION
Banking
operation is very important in the stating of any economy in the functions of
commercial bank in an economic system is the transfer of funds from the surplus
unit to the deficits units. The surplus unit provides the fund needed to the
deficits unit for investment purposes, this is essential for economic growth of
any country. The commercial bank are the intermediaries between the demand side
and the supply side.
Banks in the process of performing their
code of financial intermediaries between surplus unit and deficit unit create
deposit when a bank give out loan to a customer account with the amount
involved. The credit to the customers account which has become now deposit
which is allowable to the bank for further lending to their prospective
borrowers.
The ability of a commercial banks to
grant loan is on the level of deposit of hours generated and the legal reserve
requirement supposed by the central bank A bank earns a return for performance
of the role mobilizing is important as well as the bad debt account due to the
numerous reason which may includes the likely death of a borrows, possible
illegal diversion of funds, poor state of the economic, not all the loans
granted by banks to if customers are rapid when due, such problems on loan and
advances are classified as bad debt and doubtful debt.
This has two major concern to both
management and shareholders, but debt are less as bank and therefore, are
capable of reducing the returns that the shareholders and contributions of the
bank to economic and social development of the country.
1.1 STATEMENT
OF THE PROBLEM
The
study investigated into the management of debt in Union Bank, it had been
discovered that several factors affects the decision of the bank management in
the numerous factors considered are the time factors, the nature of the
business of the company involved and its management team and the type of
industry in to which the company’s falls.
A study concern itself with the
examination of low factors like non products financial management, natural
disorder, prevailing economic difficulties which has caused many countries to
operate below capacity and other have affected management of bad debt.
1.2 AIMS
AND OBJECTIVES
The
bank is a business enterprises aim of maximization of profit payment of
handsome dividend to the shareholders and contributing if quote to the economic
growth of the nations.
The main objectives of this research
topic is to defall the bad debt activities through the strategies they are
using in order to minimize the rapid growth of debt to become bad, effort would
be made to draw out the impact of bad debt on the entire banking industry
including the staff, customer and marketing activities, there by consisting a
major constrains on the achievement for their desire objectives.
The project is also to touch the effort
of prudential guide lines on bill debt and categories of bank debt, study the
process of credit appraisal identify the major causes of bad and doubtful debt
analysis their effects and offer suggestions on the minimization and effective
management of bank debt in union bank.
1.3 SCOPE
OF THE STUDY
The
scope of the research is created on the business operating and working on the
union bank of Nigeria plc, which give on insight explanation on management of
bad and doubtful debt in the loan and advances department and the effect of bad
debt on the profitability of bank.
1.4 SIGNIFICANCE OF THE STUDY
The
significant of this study is firstly its ability prefer solution to the problem
of fraud.
Secondly if expose it expose student to
information and builds them in the act research data and information collection
and bold project writing.
Thirdly, if serve as literature material
to prospecting researcher for future researcher lastly if serves as an alert to
the regulation body of financial institution on that, if fraud is not urgently
death with it might just parallax the economy totally not spanning the banking
section, as they say a study in time saris nine. The significance add if
depended upon as a source of possible solution to the problem of fraud
1.5 LIMITATION
OF THE STUDY
The
study faced its highest limitation in the area of interview most of the bank
officials were relevant to grant us their time for an interview based on the excuse
that they were very busy. This study also faced limitation in the length given
for the research project, which we consider as insufficient.
1.6 RESEARCH
METHODOLOGY
These
are suggested solution to research questions which during the cause of this
research study will be tested.
These suggested methodology will guide
us in the approach to be applied this study.
1)
Moi: There
is significant relationship between the menace of bad debt and the distress of Nigeria
commercial banks
2)
Mo: There
is significant relationship between the menace of bad debt and the distress
Nigerian commercial banks
1.7 RESEARCH
QUESTIONS
Question one:
what are the causes of bad debt in union bank
Question two:
what effect does the inefficiency of bank regulation body have on the existence
of bad debt in Union Bank.
Question three:
what relationship exist between bad debt
Question four:
what impacts does bad debt have on the regarded growth of the Nigeria Economy.
1.8 DEFINITION
OF TERMS
1) Auditor:
this is an independent professional accountant employed by a company
(shareholders) to audit the financial state meant of the company.
2) Teeming and lading: Using
the money received from one debtor to clear the account of another debtor whose
money was previously misappropriate company in order to establish its
authenticity and lunchernty to standard
3) Boflo
bank and other financial institutions decree
4) Dual central system:
A system of two central system in which one serious as a check on the lapses of
the other
5) Lending: act
of granting money out on credit
6) Security: These
are financial documents issued by the government of the public to source for
funds implying on state of indebtedness of the government to the holders of
such document
7) Questionnaire: A
set of reposting system of evaluation via the use of pretend form of question
8) Credit:
Granting the use of possession of goods without immediate payment.
9) Internal control:
System of controlling actual performance against standards through the use of
presented mechanizes.
10) Bankrupting:
A declaration by a court of law that an individual or company is insolvent (can
not meet its debts on the due date)
11) Share holders: There
are members and owners of a company via their ownership of the share the
company
12) Payroll:
this is a record card that shows that gross wages, tax deductible and the net
wages payable to an individual workers.
13) Remuneration: Reward
for labour and services
14) Orgardgram: this
is the structural arrangement in an organization
15) FEM:
foreign exuding market
16)
CBN: central bank of Nigeria.
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