REVIEW OF DEBT MANAGEMENT IN FINANCIAL INSTITUTIONS (A case study of Union Bank Plc. Nig. and First Bank Plc. Nig)

TABLE OF CONTENTS

Declaration.. iii

Certification.. iv

Dedication.. v

Acknowledgment. vi

Table of Contents. vii

List of Tables. ix

CHAPTER ONE.. 1

1.0 Background of the Study. 1

1.1 Research Question.. 3

1.2 Purpose of the Study. 3

1.3 Statements of Hypothesis. 4

1.4 Significance of Study. 4

1.5 Scope of the Study. 5

1.6 Limitation of Study. 5

1.7 Plan of Study. 6

1.8 Definition of Terms. 6

CHAPTER TWO... 8

2.0 Literature Review.. 8

2.1 What is Debt Management. 8

2.2 Types of Debt Financing. 9

2.3 Principles of Good Lending. 10

2.4 Major Things to consider in granting loans to customers. 13

2.5 Approaches for the provision of bad and doubtful debts. 15

2.6 Management Function.. 16

2.7 Inconsistent Economic policies. 19

2.8 Bad debt Analysis. 20

2.9 Diversion of Loans and Advance Funds. 21

2.10 Managerial Inadequacies. 22

2.11 Indications of Emergence Bad Debts. 22

CHAPTER THREE.. 24

3.0 Historical Background of Case Study. 24

3.1 Population of Study. 26

3.2 Sampling Methods and Techniques. 26

3.3 Method of Data Collection.. 27

3.4 Techniques of data Analysis. 28

CHAPTER FOUR... 29

4.0 Data Analysis and Processing. 29

4.1 Presentation and Appraisal of Questionnaires. 29

4.2 Test of Hypothesis. 35

4.3 Analysis of Debt to Loan and Advances Portfolio.. 36

4.4 Analysis of Bad Debts to Total Assets. 38

4.5 Effects of Recoveries on Profitability Index.. 40

CHAPTER FIVE.. 42

5.0 Summary, Recommendation and Conclusion.. 42

5.1 Summary of Findings. 42

5.2 Conclusion.. 43

5.3 Recommendation and Suggestion.. 43

Bibliography. 45

Appendix. 46

CHAPTER ONE

1.0 BACKGROUND OF THE STUDY

The frequent and incessant bank distress in recent time in Nigeria makes it indispensable to understand what is meant by Debt generally in the banking sector before analysing the bad aspect of it.

Denotatively, debt is a payment which must be paid but has not yet been paid. In a simple definition DEBT is an obligation owned by a person called debtor to another person called creditor demands payment as specified future date. Therefore debt management is the process of and granting loan from initial till payment is made by strict adherence to lending policies.