The author very conscious of the fact that responsibility for food lending rise with the banks and government and in the writing of this problem obtaining a banking loan by small scale industries from Nigeria banks which is intended to y-ray the difficulties encountered by bank customer in obtaining loan. I hope that have been able to alert the banks and government of this ugly situations which hampers general economic.
The content has been segmented into chapter and each chapter treating district aspect of bank loan all of then culmination to emphasis the importance of bank lending and why three should not be any obstruction to obtaining it.
The book starts by first of all explaining the different types of bank lending and the types of banks involved so as to point out the different credit guide-time affecting each banks as regards its capacity to lend and to what extent. It is also worth while to mention that the general element of good lending are also incorporated at least to justify the banks and the government in some of their restrictive measures of lending.
Severed more banking services have been added to the chapters to elucidate the negative economic effect or low bank lending cum services.
There is also included the appropriate recommendation and conclusion necessary to direct the lending sector towards the correct way of obtaining bank loans.
In this place we have to known the definition of bank loan. It may be defied as a financial facility/granted by a bank which is specific purpose. Usually a loan has a definite fixed repayment programme and a defined due ration, which has a complete repayment of a loan and other charges associated with if which include the loan contract is automatically determined.
This chapter will also deal with the different type of bank credit which the short there for working capital requirement the medium and long term loans
The project financing the acceptance credits/bills discounting. The bank guarantees and endorsement first I start with the first type
This is a process of “short term loan” of a credit facility with a comparatively short duration ranging from (one – five years) although it varies with the different financial houses
This type of bank loan an inherent advantages which the borrowers enjoys. They are.
An “overdraft” is an authority by commercial banks to customers to overdraft their current account on a certain limit on the agreement that the repayment must be made within the stipulated time, that is being allowed for it. Some of the customer enjoys the overdraft because.
ii It is very flexible and quickly obtaining.
Iii There is no minimum that is attached to it.
iv. The interest is being paid only on the reasonable fund (which is
the fund drawn).
v. It is usually renewable
vi. It can sometimes be unsecured is the customer may not be required to pledge any of his property in order to obtain the overdraft. Overdraft and the short lending in primarily the responsibility of commercial banks. At present, there are at least fifty (50) commercial banks in Nigeria operating side by side with over twenty (20) mordant banks different stages of development.
Although these financial institution have up to two hundred (200) commercial bank branches and over seven hundred (700) merchant bank branches distributed throughout the states of this country and Abuja compose with the record of commercial bank growth before the 1980s it might be said that their has been a considerable equally noteworthy that the growth has been agendered more by the governments efforts to promote the expansion of banking facilities in the country. Rather the banks voluntary expansion programmes in a bid to achieve nationwide coverage or to take advantage vast and wildspreding population. Commercial banks also involves themselves on medium term credit but are frequently-seared by loan moving above 6 – 9.
Medium term loans, these are those loans that are been granted to customers between three to five (3 – 5) years as being regarded by some banks while some banks regards that as being between five to ten (5 – 10) years i.e. is precisely for a maximum of 10 years
B “long term loan” are those loans that are being granted to customers that last from ten years and above. This type of loans is got from commercial banks and specialized financial institution like the development banks. It is noteworthy that commercial banks are out of long term loan except through consortium because they borrow short and lend short. Long-term loans are mainly for merchant banks and insurance companies.
Project financing.
This is an undertaken by some specialized banking institution like Nigeria industrial development bank. The Nigeria Agricultural and commercial banks, the federal mortgage bank the federal saving banks e.t.c. these institutions Carter for the credit need of sector of the economy.
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