ABSTRACT
This research was carried
out to focus attention on the Problem and Prospect of Credit Creation in Banking
Industry. Using Wema Bank Plc as a case study.
This function reveals the
problems and prospect associated with the credit creation services and the
causes of it.
TABLE OF
CONTENTS
Title of Page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table of Content vi-vii
CHAPTER ONE
1.0
Introduction 1
1.1 Background
of the Study 1-2
1.2 Statement
of the Problem 2
1.3 Research
Question / hypothesis 2-3
1.4 Purpose
of the Study 3
1.5 Scope
of the Study 3
1.6 Limitation
of the Study 4
1.7 Significance
of the Study 4
1.8 Definition
of Term 5
CHAPTER TWO
2.0
Literature Review 6-8
2.1 The
Problem and Prospect of Credit in banking Industry 8-10
2.2 Procedure
for Creating Credit Facility in Banking Industry. 10
2.3 Reason
for Credit Creation in Commercial Bank 11
2.4 Steps
in Credit Planning in Commercial Bank 11
2.5 Principle
and Practice Guiding Lending at WEMA BANK 11-12
2.6 Credit
Administration & Securities Acceptance To WEMA BANK PLC. 13-14
CHAPTER THREE
3.0
Research Methodology 15
3.1 Research
Design 15
3.2 Area of
the Study 16
3.3 Population
of the Study 16
3.4 Sample
and Sampling Techniques 16
3.5 Instrument
of Data Collection 17
3.6 Method
of Data Collection 17
3.7 Method
of Data Collection 18
CHAPTER FOUR
4.0
Data Presentation Analysis & Interpretation 19
4.1 Data
Presentation Analysis 19-21
4.2 Testing
of Hypothesis 22
4.3 Finding
& Interpretation of Result 22-23
CHAPTER FIVE
5.0
Summary, Conclusion and Recommendation 24
5.1 Summary 24
5.2 Conclusion 25
5.3 Recommendation 25-26
References
Appendix
CHAPTER ONE
1.0
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
Commercial Banking operation
in Nigerian started sometimes in 1891 when it become apparent that banking
facilities was urgently needed especially. IN 1892, THE African Banking
Corporation – the first commercial bank in Nigeria was established to cater for
the distribution of Bank of England notes on behalf of the British treasury.
The bank later wound up its operation in 1892, and in 1893, Elder Dempster and
Co. were approached and through the initiative of Sir Alfred Jones, another
Bank was opened the Bank of British West Africa (B.B.W.A) in 1893, the bank was
thus registered in England as a Limited Liability Company on 31st
March 1894. Its Head Office was in Liverpool
(with a staff of only two). The Lagos
branch office was also opened in the same year.
The credit creation in the banking industry in Nigeria handled
the import and export of mint coins, until 1959 when the Central Bank of Nigeria was
established.
Commercial bank can be defined as dealer in money and
credit holding itself out to receive from the public, deposits repayable on
demand by cheque. The National Bank of
Nigeria was established on a sound footing due to greater post activities, the
bank had to close down, between 1915 and 1947, four indigenous banks was setup
only to show and survived, the two banks that survival were African Continental
Bank (ACB) and Agbon-magbe Bank which is
now called Wema Bank of Nigeria Plc.
Commercial banks play an important role in the allocation
of funds to individual and business organization in the society. One of the
principal functions of Wema Bank in the creation of credit facilities which is
the process of distributing of fund to potential utilized to ensure that
anticipated to fits to the borrower and lending bank.
Credit facilities are being enjoyed by the account holders
individuals and co-operate bodies, monetary aspect of the economy which
involves the mobilization of founds from their trade for expansion purpose from
other sources through friends and others, their last result is to source for
funds from the government bank which play with attention to the flight of the
leader.
1.2
STATEMENT
OF THE PROBLEM
In the course of
study, a close critical examination of commercial banks in Nigeria reveal that
commercial banks help their customers in the provision of banking services in
Banking Industry it is also noted that all banks are profit oriented and
thereby fail to meet up with their customers in the provision of banking
services in Banking Industry it is also noted that all banks are profit
oriented and thereby fail to meet up with their customer’s demand. There is
also unhealthy compilation in the industry, which has made it difficult for
banks to perform necessary function to their respective customers.
The problems of
credit creation in the Banking Industry makes the researcher to note that the
objective of banks to meet up with their customers services go in a long way to
achieve the stated objective of banking system. Liquidity which is highly important
to meet with customers demand as a result of this problem in this sense, the
study is set up to find out what were responsible for that failure and offer
suggestion on how bringing desirable improvement in Banking Industry.
1.3 RESEARCH
QUESTION AND / HYPOTHESIS
The instrument used are factual question and direct
personal interview, by using factual questions the respondents were allowed or
given maximum freedom to discuss at length for their understanding and opinions
about the project topic, however in addition to factual question, direct
interview method was also adopted to add other necessary information for the
effectiveness of the study.
As the topic deals with in these project, is making
oriented. Therefore people of total number of twenty questionnaire was sent to
select number of people who we believed, and knowledgeable of the study within
the marketing circle of the organization.
Also, in this project the use of a question called
STRUCTURED QUESTIONNAIRE was to explain the purpose of the research to the
respondents and to elicit their co-operation in answering the question there
in.
The question set in the questionnaire are of two type
1. DICHOLOMON QUESTION: These types of question requires the
respondents
to pick what
he/she considers corrects by ticking the box; Yes ( ) or No
( ).
2. SUGGESTED QUESTION: Here
the respondent are expected to write what they feel is/are correct response the
question(s) asked. Both systems were used as part A and B.
A question
analysis and evaluation of the question will be facilitated which part B allow
respondents to give a direct response to secure a more general response for an
opened question.
1.4 PURPOSE
OF THE STUDY
This project work aims verifying the contribution with
effectiveness of the problems and prospect of credit creation in banking
industry in Nigeria.
1.5
SCOPE OF
THE STUDY
This study would
concern itself with the procedure of creating credit facilities.
The
administration and encountered by commercial banks in credit creation and also
will be collection procedure.
Wema Bank Plc
Mokola Ibadan Branch chosen as a case study was visited to collect the
necessary material and a cross section of their customers.
1.6
LIMITATION
OF THE STUDY
This project
work is prone to some constraints since it will not be easy if not impossible
to carry out study of all banking organization.
Also, the cost
of writing material and other stationeries are also one of the constraints
facing the researcher, other limitations was insufficient time for collection of data in writing the project
work and combining it respondents to reasons for limitation in the case study.
Furthermore,
there is a problem arising from collection of questionnaire from respondents,
when administering the questionnaire assumed that the respondent were answer
question objectively and without any bias, some customers are illiterates and
hence some questionnaire left un-answered also questions are given in
appropriate answer.
1.7
SIGNIFICANCE
OF THE STUDY
It is a fact
that the problems of credit creation in banking industry in Nigeria brings an
end to surverness of people in the country in an organization, the most
critical executive is the accomplishment of the corporate objectives varies and
differ from the organization to the other. Commercial Banks may offer them and
how to take advantage of such opportunities to improve upon their economic well
being.
The study may
open the eyes of the general public to the usefulness of banking for economic
i.e progress and prompt, more people to patronize commercial banks which will
look effect of having large profit by banks.
This project
work provide some general practicable approach and theory in creation of credit
in Banking Industry.
1.8
DEFINITION
OF TERM
1. CREDIT CREATION:- This is the process of distributing of find to
potential by djlending and borrower in bank.
2. CHEQUE:- A bill of exchange drawn on a banking payable on demand.
3. COMMERCIAL BANK:- A financial institution set up for keeping and
lending money to people owned by an individual, organization or Government.
Examples are: U.B.A, WEMA BANK, G.T.B. e.t.c.
4. LOAN:- This is a bank money that bank gives its customers that met
the requirement for such money.
5. OVER DRAFT:- This type of credit facility are enjoy by those who own a
current account.
6. CREDIT TRADING: This is a type of credit which a trader provides to
its customers.
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