ABTRACT: The accounting rules and laws are made to guide the accountants to prepare a financial statement that show a true and fair view. When an account did not show an accurate balance, then we prepare a suspense account. Coming to loaning in banks, there are rules and regulations that guide lending.
This write-up clearly defined and discus all in the way it wills clarity all arguments about loaning in Nigeria banks.
TABLES OF CONTENTS
CHAPTER ONE
CHAPTER TWO
CHAPTER THREE
CHAPTER ONE
Bank lending or granting of loan is a very important obligation of the commercial bank. After sourcing of funds, the commercial bank will apply it into lending out to the public in the aim of making profits and deriving interest from it. Commercial banks have to take feasibility studied before they grant loan to public. And the loans granted by commercial bank have gone long way to help in infrastructure and social development of our country. It has been a help to the sole proprietors, expertise even partnerships and public or private companies.
But the problem of obtaining it has been a social hazard because of the behavior of customers and some parts played by the bankers. On the side of the customers who have it mind of getting his own National cake through a loan granted to him by our commercial banks. And some men of the underworld called banker.
ORIGIN OF BANKING SYSTEM IN NIGERIA
The origin of banking in Nigeria can be trace back from the origin of commercial bank in the country. Because the first bank that came and commenced work is commercial bank.
Meanwhile the commercial bank that came and commenced work was invited by our colonial govt. This action lead the demand of African Banking Corporation based in South Africa to be invited in Lagos Nigeria to commenced work in 1892. Then historically, the Africa banking was therefore the first modern commercial bank to open a branch office and in Lagos.
In the year 1894, the Bank or British West Africa came into existence in 1899, the bank of Nigeria was established by the Royal Niger Company. Meanwhile in 1912, the bank of British West Africa absorbed the bank of Nigeria and exercised monopoly over banking in Nigeria.
In the year 1925, the Barclays bank and other colonial bank came after all these ones. Specifically, the operations of the above-mentioned banks brought about lending in Nigeria. Credit creation (lending, granting of loan) is a very important function of commercial banks. The commercial banks accept deposit from private and institutional depositors. The fund so granted or generated by the banks are made available to borrowers in the form of overdraft and loans.
Virtually, every business has a credit relationship with a financial institution especially banks. Some rely on periodic short-term loans to finance temporary working capital needs. Others primarily new acquisition or permanent increase in capital. Regardless of the type of loan all credit request mandate a systematic analysis of the borrowers ability to repay.
The lapses in granting bank loan in Nigeria should not be over emphasized. Because granting of loan is the primus inter pares in the investment process of the country. Notwithstanding, it has brought about dilapidation in our infrastructure development.
Meanwhile, granting of loan from commercial banks, development banks and other financial institutions have the same problems. The modus operands of custom are those grant loans are nothing to write home about. Most a times, customers are like collecting their own share of the Nigeria economy.
Another carps is the attitude of the banker as regards to supervision. Clearly speaking, any loan that does not have a good supervision is always a problem loan, which means a baldest. But loan is a seasonal problem. It does not come geometrically. The capacity of the customers to payback the loan is very important because one of the main problems of baldest is incapability of the customer to pay back because of customers financial handicap and bankruptcy.
Furthermore, the purpose of granting the loan is very important because some dubious persons tacked customers sometimes collect loan just for ceremony or fun, therefore before a loan is granted to customers, we should be emphasizing on the purpose of taking the loan. If a reasonable answer is not given, we will not lend out the money, it became a baldest.
Meanwhile the amount that is to be granted is another aspect the bank needs not to play with. Because some customers that took bulky amount of money always come back with nothing.
The researcher hypothesis in the curse of the appraisal of the impact of problems of bank loan in Nigeria formulates the following hypothesis.
The researcher hopes strongly that this study will enable the bankers and the customers change their unpleasant attitude as it concerns loan. The study will also enlighten the customers on which bank loan is and importance to pay back at the expected time without minding the misleading factors around them.
The study will also act as a literature review to those that are interested in doing further studies in this area of study of problem of obtaining bank loans.
The study supposed to have covered the whole commercial and development banks in the eastern part of the country but because of financial handicap on the side of the researcher and economic constraints, the study was shallowly made on few commercial and development banks in Enugu and Imo States.
Furthermore the researcher supposed to have gone more to Abia State, but because of circumstances beyond the research’s control, as regards to academic pursuit, made this study to be limited.
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