LENDING POLICIES AND PROCEDURES OF BANKS IN NIGERIA Case Study of Skye Bank Plc

ABSTRACT

Lending is the most important activity of the Bank. It is the utmost activity of financial intermediation whereby fund mobilized from the surplus sector of the economy is judiciously redirected to the deficit sector, for investment purposes and economic growth of the country. However, this lending activity is frosted in many dangers especially that of default and delay in repayment. This is what prudential guidelines try to curtail by creating performing and nonperforming credit portfolios. Various Banks equally respond to this by creating lending policies, detail what to do and how is to be done concerning their various credit portfolios in order to minimise their exposure. Skye Bank plc formerly cooperative Bank plc Osogbo Branch is our case study in this work and we shall examine some of these policies aim at reducing non performance credit by various corporate bodies and customers by enhancing the Banks profitability.

TABLE OF CONTENTS

Autorisation/Approval Page. iii

Certification.. iv

Dedication.. v

Acknowledgementvi

Abstractvii

Table of Contents. viii

List of Tables....x

CHAPTER ONE.. 1

1.0 Introduction.. 1

1.1 Research Problem.. 3

1.2 Objectives of the Study. 5

1.3 Research Hypothesis. 5

1.4 Significance of the Study. 6

1.5 Scopes and Delimitation.. 6

CHAPTER TWO.. 8

2.0 Literature Review.. 8

2.1 Lending Principles. 8

2.2 Forms of Bank Lending. 15

2.3 Methods of Credit Control18

2.4 Principal Ratios in Credit Analysis. 19

2.5 Parties Involved in Credit Facilities Made by Banks. 22

2.6 Lending Policies and Objectives. 22

2.7 Lending Loan Policies. 23

2.8 Objectives of Credit Control24

2.9 Brief History of Banks in Nigeria. 24

CHAPTER THREE.. 29

3.0 Research Methodology. 29

3.1 Research Design.. 29

3.3 Population and Sampling Techniques. 30

3.3 Data Analysis Technique. 30

3.4 Determination of Critical Value. 31

CHAPTER FOUR.. 32

4.0 Data Presentation, Analysis and Interpretation.. 32

4.1 Data analysis. 32

4.2 Testing of Hypothesis. 40

CHAPTER FIVE.. 45

5.0 Summary, Conclusion and Recommendation.. 45

5.1 Summary. 45

5.2 Conclusion.. 46

5.3 Recommendations. 47

References. 48

Appendix. 49