CREDIT ANALYSIS AND LOAN MANAGEMENT IN BANKING INDUSTRY

CHAPTER ONE

INTRODUCTION

Credit financing could be seen as back backbones of the economy. This is because one can hardly see any business transaction without the mechanism of credit.

As financial intermediaries, banks have the function of procession, these facilities in form of loans and advances, to the deficit units of the economy to ensure equitable distribution of resources development of the real manufacturing agricultural etc loans and advances are geared to acids industrialization and development especially in an economy like ours, which is characterized by low capital base, inflation, low pre capital income and other unfavourable Economic indications.

Banking lending through the most profitable activity of the bank industry, is the most risky venture that is undertaken by the banks.

Hence, excellence in the field of lending and credit management is excellence in the fields of lending and credit management is essentially through practical experience. The key to successful lending for business is a systematic credit analysis, which deals with the process of investing those factors that give rise to non payment of debts. The efficiency of credit decision shall b all standards depend upon sound judgements of the officer or manager.

Hence to succeed, the lending officer must combine expertise and flexibility in appraisal of individuals application it is against this background that credit analysis and loan management of fidelity bank plc is evaluated to determine it impact in the economic development of the nation.

1.1  BACKGROUND OF THE STUDY

       This research work is essential for efficient credit and loan management in the banking industry. This is because of the problems it has created. In the banking industry which has led to non compliance by some banks to the credit guidelines of the Central Bank of Nigeria (CBN). Above all, given global economy these are a need to address the issue.

1.2  STATEMENT OF THE PROBLEM

i.     Lending an operation which forms the major problems area if most bank activities are inadequately highlighted by bank inspectors.

ii.    The credit files of most of the borrowing customers carry little or no information of value.

iii.   Monies are not periodically removed to the head office/branches in respect of loan and advances.

iv.   These are poor control of loans management with respect of performance of loans and advances.