ABSTRACT

The purpose of this research is to examine the impact of credit management on commercial banks.   The introduction of the prudential guideline in banking industry, the volume and value of loans and advances classified into non-performing account ahs continued to increase in bank lending.  Obviously this has adverse effect on banks since it affects their cash flow and impair profitability.

Most loans and advances go bad because of the inadequacy in credit management and recovery procedure of banks.  Appraisal of lending vis a vis the credit management of banks and the impact of the application of prudential guidelines on credit, form the major objective of this study.  Union bank of Nigeria Plc Okpara Avenue Enugu was used as a case study with a view to highlight the effectiveness, the adequacy or otherwise of the credit management policy of Nigerian commercial banks with a view to finding the causes and consequences of non-performing loans and advances.  The causes are excessive lending on security values and bad management of borrowers.  Having analysed the data, the following findings were made, the principal objective of bank lending is to generate revenue, the loan deposit ratio affects the liquidity position of commercial banks, non- performing account kept on increasing the frequent occurrence of non- performing accounts was discovered to be as result of the banks inability to put in place an effective process of loan recovery, implementation of prudential guidelines by Nigerian commercial banks reflect the real income of banks.  In conclusion, the prudential guidelines reduced the profitability of commercial banks and made banks classify their loans clearly.  In the recommendation, the researcher suggested   that the provisions of the prudential guidelines should be adhered to and an effective loan monitoring unit should be set-up in al commercial banks.

TABLE OF CONTENTS

Title Page i

Approval page ii

Dedication iii

Acknowledgement iv

List of Table v

Table of Content vii

Abstract x

CHAPTER ONE

1.0 Introduction 1

1.1 Background of the Study 1

1.2 Statement of the Problem 6

1.3 Purpose of the Study 6

1.4 Scope of the Study 7

1.5 Significance of the study 7

1.6 Hypothesis 8

1.7 Definition of Terms 9

CHAPTER TWO

2.0 Review of Related Literature 11

2.1 The role of commercial Banks in Nigeria Economy 11

2.2 Causes of Non-performing accounts/ credits 13

2.3 Techniques though which banks can minimize 15

2.4 The purpose and importance 

of commercial banks in Nigeria. 20

2.5 The positive impacts of the prudential guideline 

on Nigeria banking industry and the economy. 23

2.6 Historical background of union 26

CHAPTER THREE

RESEARCH METHODOLOGY 29

3.1 The Design of the Study 29

3.2 Population of the Study 29

3.3 Sample and Sampling Techniques 30

3.4 Instrument for Data Collection 32

3.5 Validity Reliability of Instrument 33

3.6 Method of Data Collection 33

3.7 Method of Data Analysis 35

CHAPTER FOUR

4.0   Data Presentation and Analysis 37

CHAPTER FIVE

DISCUSSION OF RESULTS 61

5.1 Discussion of Findings 61

5.2 Recommendation 64

5.3 Limitation of Study 65

5.4 Suggestion/ Area for further studies 65

5.5 Conclusion 66

Appendix I 67 Appendix II 68