In conducting the research for this topic the researcher do hope to visit union bank Okpara Avenue Enugu and administer questionnaires to the top ranked staff, the research will be based on oral interview after which critical analysis of data collected will follow.
Moreover some constraint that tends to limit the research quest for information are inadequate financial resources and time factor due to constantlature in the classroom there by making it impossible together enough information needed for the research work.
In conclusion since he commercial banks do not have their individual lending policy but take directives form central banks of Nigeria in other to adjust within the stipulated standard and aim of utilizing their customers deposit they should know whether this loan is actually given to the poor individuals and also consider their liquidity base and current government monetary policies to limit the problem of short maturity of loans.
TABLE OF CONTENT
1.0 Introduction
References
2.0 Review of related literature
References.
3.0 Research design and methodology
References
4.0 Data presentation and analysis
5.0 Summary of finding conclusion and recommendations
References
1.1 BACKGROUND OF STUDY
Over the years the Central Bank of Nigeria had stipulated the amount of interest and lending rates that are obtainable in our commercial banks, with a view to harmonize these rates in all commercial banks in all the country it will be of interest to note that the central banks credit policy guideline had been a reflection of the country’s economy form year to year.
The monetary and credit policy measures were designed to accelerate the rate of domestic production maintain healthy balance of payment position reduce the arte of domestic price inflation. Monetary policy measures were also aimed at increasing the flow of credit to the priority sectors of the economy particularly the agricultural and manufacturing sectors so as to expand the production of home made goods and services. The stand of monetary policy continued to be tight to complement a disciplined fiscal policy in order to achieve moderation in inflection any measure and ensure exchange rate stability.
The Nigerian banking ordinance of 1952 and the banking act of 1958 and various amendments and innovations through 1969 laid the foundation for the operation of commercial banking in Nigeria. The number of commercial banks operating in the country rose from eight (8) in 1959 to twenty five (25) in 1983. as at 1995 there are 65 commercial banks in Nigeria with 1634 branches in urban areas 763 branches in rural area and 6 branches abroad totaling 2403 branches a significant increase. While bank branches and offices increased from 160 to 1108 branches and offices in these period. The total deposit liabilities also rose from 13.6 million Naira in December 1969 to 13.9 billion Naira at the end of 1983. Since 1977 and following the enactment or promulgation of Nigeria Enterprises promotion decree 1972 it has become mandatory for all banking institutions in the country to be at sixty percent (60%) Nigeria owned. This showed that with the promulgation of Nigeria enterprises promotion decree Nigeria have started loving more than fifty percent (50%) shores in the commercial banks operating in the country following the current capitalization that us map out by the central banks on all the commercial banks operating in Nigeria.
The commercial banks have over the years proved to be the most important financial intermediary. They have facilities for the rapid transformation and improvement of our economy far and ways they are the largest single group in financial sector out weighting by shore volume of transactions all the other non-banks financial institution joined together throughout the whole world the commercial banks is playing a big role in shaping the economy. They provide the tools contact and expand the money in circulation through the mass of bank rates. In Nigeria however the government has sustained shareholding in the equity capital of the banks. They have contributed immensely to the economic development through their deposit holding and credit to the Nigeria economy.
This study entitled “ empirical analysis of commercial banks lending policies to the private sector” attempt to appraise the various ways through which the commercial banks disburse money in from of loans and advances to the private sector with a view to determine the extent of compliance with the central banks of Nigeria credit guidelines.
For sometime now there have been a large stream of articles books and researches on commercial banks lending polices. This is so because of the need for fund by both the private and public sectors for development purposes. Frankly commercial banks do not have their individual lending policies but can adjust within the stipulated standard with an aim to utilize their customer’s deposit to attain the goal of optimum profit.
It is disheartening to team that the efforts of various government (federal and state) towards the attainment of self-sufficiency in the industrial agricultural product have been on persistent increase. There have been great shortage of most of the essential food product and raw materials. They do not seem to be any significant improvement with regard to output or productivity of private sector. In the area of loans and advances that people now cast doubt over the ration ate of commercial and allied bank loans or credit scheme.
Some people have gone as far as asking the following questions. Do real and deserving industrialists and agriculturist especially in the areas actually receive these loans? What impact have these loans created in the private sector of the economy?
In an attempt to answer the above questions and more it because necessary to review an why other:
OBJECTIVES/PURPOSE OF THE STUDY
This study entitled “ empirical analysis of commercial banks lending policies to the private sector” is discuss toward appraising the central banks of Nigeria credit policy guideline regarding loans and advance disbursed by the commercial banks to individual and companies with a view to determine it’s effectiveness and compliance to the rules laid down. Whether the individual/ companies that benefited from the loan actually make use of the fund for the purpose they applied the money for.
The researcher will also have on insight (understanding) into the sectoral allocations of these loans and advances from the view point of preferred and less preferred sectors of the economy. The study is directed towards determining the use to which this borrowed money are put by the beneficiaries with a view to determine whether or not the loans are utilized for the purpose for which they are meant for.
The study is also geared towards borrowing whether these commercial banks actually give these loans or they give these with stringent conditions making it impossible for poor individuals or small-scale industries to obtain these and repay with much high interest rate accompanying it.
This study is important in the sense it shows the ways loans and advances This study is important in the sense it shows the ways loans and advances made available to individuals and companies by commercial banks with a view to enable them carry on their business and operations with intention to repaying back such loans at an agreed future period and the agreed interest rate being the cost of the loan.
The study is also significant because the finding will be help to commercial banks customers (the beneficiaries) and there fore help the policy makers to make amend the exists lending policy and formulate new and appropriate lending polices or facilities in such a way to reduce these problems to list minimum.
It will also be of immense benefit to future researchers on the same subject matters or in a similar circumstances. The study will also provide data for planning purpose.
Furthermore it will help central banks of Nigeria to know whether their credit guideline are being followed as prescribed.
1. Through what sources do you raise your find?
2. What find of loans do you grant to your customers?
3. What type of securities qualifies one for your loans?
4. What problem do you encounter in the issuance of loans in relation to:
To beneficiaries:
However due to loan resources and time the researcher has concentrated he work on commercial banks operating within Enugu state.
In a study of this type a lot of constraints are bond to come up the work will be constrained by many variables. The greatest identifiable ones are time finance literacy level of the respondents and general economic problem.
TIME: Since the research work is carried out on student level in particular during the time of lecture and examination the researcher has to allot her time in such a way that the demands of other courses had to be met.
FINANCE: Second to the time factor is the insufficient fund which is another factor inhibiting this research work. The project will be single handedly financed by the researcher. And as a result it will be cumbersome to cover some inevitable expenses like transport purchase of stationary typing and binding labour etc. this will in turn effect the sample size and geographical area of coverage of this study.
RESPONDENTS: The unwillingness of the bank official to provide adequate and relevant information required for this research. Some of the official interviewed though technically skillful in the area of loan and advances were not allowed to give all the information in view of the confidentiality o
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