ABSTRACT
The research work is aimed at determining how effective credit management is with a view to meeting the requirement and satisfaction of the various categories of customers that is to find out whether bank customers are satisfied with the granting of loans and advances and also to examine the regulatory provisions of banks in terms of granting of facilities vis-à-vis customers requirement. The analysis of this work was done using the Z-test under normal distribution method. Primary data were obtained through the use of questionnaire, and personal observations. This enabled us to know the relationship between the bank’s provision of credit facilities and customer’s satisfaction. It was found that the procedure of granting credit facility by banks is a factor that affects the satisfaction of bank customers. It is expedient that management should do away with stringent and unnecessary procedures that dissuade clients from obtaining bank credit.
CHAPTER ONE
INTRODUCTION
1.1Background to the Study
The banking system is a very strong element of the entire edifice of the nation. A bank is simply an institution that provides the minimum banking services and which is licensed by the federal government as a banking institution. Such minimum banking services includes;
(a) Acceptance of deposit from the general public
(b) Making payments to the depositors on demand to the extent of the money available in their accounts
(c) Granting loans and advances to credit-worthy customers
(d) Be involved in the clearing of cheques.
(e) Keeping current account in their books which credits and debits are entered.
The bank credit facility to customers is of two forms which are overdraft and advancesand the maximum benefit derived from this goes a long way to know how satisfied these customers are. One of the important factors for the success of a bank is customers; a bank must try to institute a credit policy that will not discourage a customer from seeking credit facility. It is observed that customers are dissuaded from obtaining credit facilities from banks as a result of stringent and complex procedures in obtaining credit facilities. In most case, loan seekers are not literate enough to cope with the complex procedures and requirements needed in obtaining credit facilities from the bank. The banks are expected to follow a rationalized credit policy based on credit standing of customers and other relevant factors should be put into consideration. Also, banks should evaluate the credit worthiness of existing customers.
1.2Statement of Problem
It has been observed that banks have failed in instituting an effective and efficient credit policy in meeting customers demand for credit facility and this has resulted in reduction of customers seeking credit facility.
Many business have gone down the drain due to lack of fund collateral security which otherwise would have been averted. And as a result of this problem, the following questions becomes an issue to tackle, firstly does the credit policies operated by the bank favorable to customers? What effect does the credit policy have on the customers? It is an inescapable fact however that customers cannot do without these bank facilities. What are the factors which influence their decisions in obtaining these facilities?
Most of the credit policies instituted by the banks are derived from regulatory framework. However, regulatory frameworks have an impact on the credit policies of the bank. Not farfetched, the interest rate has an effect on customer’s satisfaction this is as a result of the fact that the higher the interest the lower the customer’s satisfaction and the lower the interest rate the higher the customer’s satisfaction.
1.3 Objectives of the Study
This research work seeks to determine how satisfied customers are with regard to bank credit facilities. The study aims at achieving the following objectives:
1. To determine the effectiveness of credit management with a view to meeting the requirements and satisfaction of the various categories of customer’s.
2. To examine the regulatory provisions of bank in terms of granting of facilities vis-à-vis customer’s requirement.
3. To find out whether bank customers are satisfied with the granting of loans and advances.
4. To examine the effectiveness and efficiency of bank credit management in commercial banks.
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