IMPROVING THE MANAGEMENT OF LOANABLE FUNDS IN COMMERCIAL BANKS IN NIGERIA
ABSTRACT
This study centered on improving the management of loanable funds in commercial banks in Nigeria. The research was prompted by the growing rate of bank loans default cases that result to collapse or disaster and serious situation led to distress of many banks institution in our country. However, the objectives set of this study includes; to ascertain the best conditions that will be appropriate to manage and checkmate the granting of loans in the Nigeria commercial banks, to determine the causes of repayment failure and defaults of loanable funds, to investigate the factors that influence high degree of bad debt and doubtful debts etc. The researcher equally formulated hypotheses in line to the objectives and research question. The primary data was collected using questionnaire that was distributed to the four banks of the study at the end 180 questionnaires was returned. The data was presented using percentage frequency and the hypotheses were tested using the z-test statistical tool. Then the study discovered the following, - that honesty of the credit applicant, provision of adequate collateral security, economic condition prevailing in the country, banking regulatory guideline of transparency and accountability, strength of the applicant business and the viability of the project are the pre-requisite factors banks considered before granting loanable funds, that the major causes of failure and default of loans repayment include, fund diversion, risk/ unstable environment, fluctuation of exchange rate and inflation, poor evaluation and inadequate managerial skills, poor supervision and monitoring, poor sighting and hasty investment, illiquidity of financial instrument and high interest rate, and that the factors that influenced high degree of bad debt and doubtful debts in the bank includes, poor record-keeping and transaction, over-the counter (OTC) trading and excessive insider abuse, poor transparency and honesty excess load non-recovery, favouritism and incompetence & poor management etc. While the following suggestions were given - there should be an increased and renewed vigour on training continuously the workforce on the measure to curtail incompetence in their operation, there should be an improve laws, regulations and conditionalties that must strictly enforced and uphold to minimized load repayment default, and distress, there should be strengthened attempt to regulate, measure appraisal commercials banks regularly to discover and punish any bank that “abuse” the prudential guidelines for loans etc. The general and pertinent view of the study support the statement that the success or failure of the commercial banks in achieving their objective of maximizing profit depend s on how well the loans are managed.
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