SECURITIES PERFECTION AND DEBT RECOVERY IN THE NIGERIAN INDUSTRY (A CASE STUDY OF SKYE BANK PLC NIGERIA)

ABSTRACT

This project is designed to look the effect securities perfection and debt recovery in banking industry in Nigeria, to obtain the relevant result and data were collected through the use of questionnaire and interview in gathering valuable fact for the project. The first two chapters deal with the introduction, statement of problem and literature review while chapter three deal with research methodology and procedure. Then, chapter four deals with data analysis and interpretation of data collected. The last chapter give, summary, recommendation for effective securities perfection and debt recovery in banking industry in Nigeria.     

TABLE OF CONTENTS

Title page                                                                                                                    i

Certification                                                                                                                ii

Dedication                                                                                                                  iii

Acknowledgement                                                                                                      iv

Abstract                                                                                                                      v

Table of content                                                                                                          vi

CHAPTER ONE  

1.0       Introduction                                                                                                    1

1.1       Statement of the study                                                                                   1

1.2       Objectives of the study                                                                                   1

1.3       Research question                                                                                           2

1.4       Statement of hypothesis                                                                                 2

1.5       Definition of terms                                                                                         2

CHAPTER TWO

2.1       Literature review                                                                                             4

2.2       Lending principle                                                                                            4

2.3       Statutory and regulatory requirement                                                             4

2.4       Type of securities for bank lending                                                                4

2.5       Effect of government regulations and control on bank lending in Nigeria    8

2.6       History of Skye Bank Plc                                                                               8

2.7       Constraints lending operation in Skye Bank Plc                                            9

2.8       Loan recovery procedure                                                                                10       

CHAPTER THREE

3.0       Research methodology                                                                                   11

3.1       Data collected                                                                                                             11

3.2       Method of data and resources of data                                                            11

CHAPTER FOUR

4.0       Data analysis                                                                                                   12

4.1       Interpretation of result                                                                                    13

CHAPTER FIVE     

5.1       Summary                                                                                                         14

5.2       Conclusion                                                                                                      15

5.3       Recommendations                                                                                          15

5.4       Suggestion for further research studies                                                          15

References                                                                                                      17

Appendix                                                                                                        17

CHAPTER ONE

1.0       INTRODUCTION

Bank plays important roles in the economic life of a country particularly a developing nation through the provision of banking services. As agent of development, they provide loans and advance including a variety of contingent facilities, which could either be short term or long terms. This explains why credit guidelines contained in governments monetary circulars stipulate aggregate causing on credit creation as well as the sectionals avocation which bank   other financial institution must comply with during a fiscal year.

In recent time, banks have witnessed a phenomenal growth in term of loans in their portfolios and the need to finance industrial project in line with the nation’s rapid growth industrialization.

Some of the facilities generally provided by bank included: short term finance, medium term finance, long term finance building / mortgage wars advance against produce etc.

When banks are providing these kinds of facilities and some others, they are exposed to some risks. Lending has some other are exposed of some risks lending has become a vital function inn banking operations because of its direct effect on economic growth and business development.

Though a banker is expected too exercise consideration skill, use his experience techniques in analyzing credit proposal and assessing the risks, it has been established from experience that unforeseen situation sometimes affect the borrowers ability to pay and this has banks to insure themselves in case the unexpected happens by demanding some form security.

Securities and perfection are particularly relevant to our situation in this country. Bad debts simply means loans or facilities granted to a customer but cannot be recouped by the bank from the customer after all efforts it has been intensified.

1.1              STATEMENT OF THE STUDY  

In the years past it has been observed that undocumented unperfected loans accounted mainly for the couapsed near couapse of many bank both in Nigeria and abroad (First –bank of Nigeria Bi journal  Vo1.  6 1998 December)

1.2       OBJECTIVE OF THE STUDY

             The objectives of this study banks plays important role in the economic life of a country particularly a developing nation through the provision of banking services. As agent of development, they provide loans and advance including a variety of contingent facilities, which could either over be short term or long term.

1.3       RESEARCH QUESTION

The research questions of this study were borne out of the huge debts which come about as a result at bank liability to realize the security pledged due to poor credit documentation and perfection. The questions therefore are:

i.                    What are the affects of poor credit documentation on bank credits?

ii.                  What are the types of acceptance securities and documentation procedure for the purpose of lending?

iii.                What are the various types of method adopted for debt recovery?

iv.                What should bank do when they notice any sign credit becoming doubtful?

1.4       STATEMENT OF HYPOTHESIS

The research hypothesis employed for verification is stated below:  

HO There are a lot agitation on the significance of good securities to  and     bank  lending prior to this write –up some bank customers complained  that their bank deprived them from financial assistances in time of need for investment purpose due to their inability to procedure reasonable counteracts not minding their wing standing good record  with them,

In the same vein bank also in them bitter experiences in loan   reconciler argued their position even securities are taken for loan and advances.

1.5       DEFINITION OF TERMS      

            This section embraces a brief explanations on specific terms not of common usage that appeared in the body of the work such terms includes.

           Credit this term used for an amount of money granted by bank calendar to a customer (Borrower) in form of loan and advance in order to finance capital.

Perfection: - This is the process of investigating the trade owner of a security, its documentation   and obtaining the governors consent (incase of legal mortgage)

Documentation: - This is the term used in obtaining security in the legal form and the process of recording, perfecting and security.

Security: - In the legal from and the process of recording, perfecting and security.

Security; this term denotes property pledge by a borrower as a means of guarantee for the credit grantee e.g lends shares e.t.c

Default: - This term sued when a borrower fails to fulfill his obligation or when he fails to repay the amount granted to him as credit.

Debenture; it denote an instrument issued by a company or individual acknowledging the indebtedness at a stated time with   interest there of.

Stamping: - This term is used as an evidentiary created on the mortgage created. The mortgage created should be stamped within 30 days of the execution.

Registration: - It can notes that document created must be required incompliance with either case law or statute and is done at corporate affairs commission within 90 days.

Insured: - This terms is used by insurance company which loans, “Risk Against loses”.

Ubcirmaefidel: - This is an insurance term, which explain that every information required must be given is utmost good truth.     

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