Challenges to bank loan recovery - case study of First Bank Plc, Makurdi Department: Banking and Finance By: Johngrey Project ID: 4663 Rating: (3.1) votes: 21Rate this project12345 Price:₦3000 Get the Complete MaterialAbstractThis research was carried out to determine the challenges of loan recovery in deposit money banks in Nigeria, using First Bank Nigeria Plc Makurdi as a case study. A sample size of 50 staff of the bank was used. The data collected were subjected to statistical analysis using descriptive statistics and a 4 point Likert scale analysis was used to decide whether a factor is agreed or not. The result revealed that the major cause of loan default are Excessive dependence on financial statements of customers (96%, mean 3.79, connected lending (88%, mean 3.65 ), loan Diversion (96%, mean 3.81) and Inadequate initial capitalization (76% mean 3.12). The major effect of loan default is a financial loss to banks and increased overhead (mean rating 3.91), limited credit creation capacity (mean 3.91), the decline in revenue (3.86) and distress to the bank (3.79). The measure to the recovery of loans by banks are the use of law enforcement agencies (80%, mean 3.72) and the use of courts and/or tribunals (82% mean 3.68). It was therefore concluded that connected lending, excessive dependence on financial statements of customers and loan diversion are major causes of loan default and the effect of loan default are financial loss and increased overhead. The measure to the recovery of loan is the use of law enforcement agencies and the use of courts and/or tribunal, it was recommended that banks should ensure that all the requirement that qualifies a customer for the loan are met before loans are granted monitor projects for which loans are granted to avoid loan diversions and also ensure that customers are educated on the policies and concept of bank loans to avoid loan misconceptions. Keywords Challenges, loan recovery, deposit money banks ...Preview Download Preview +Other Banking and Finance project topics and materials you might be interested in»The role of central bank of Nigeria (CBN) in the development of Nigeria financial sector»Appraisal of the economic implication of electronic banking in Nigerian banks (A case study of diamond bank)»The impact of strategic planning on banks performance in Nigeria (A case study of united bank for Africa plc)»Evaluation of the impact of liquidity management on banks performance in Nigeria ( A case study of UBA )»The roles of central bank of Nigeria in the prevention of bank failure or liquidation (A case study of central bank of Nigeria 2005-2009)»The role of financial institutions in promoting banking habit and saving capital formation in Nigeria»The effect of electronic banking on fraud reduction in bank (A case study of access bank plc)»The effectiveness of monetary policy measures in controlling inflation in Nigeria»Problems and challenges facing finance houses in the Nigerian economy ( A case study of mortgage bank owerri )»The role of deposit money bank in Nigeria in economy development in Nigeria - a case study of Access Bank Plc»Motivation as a way of reducing fraud in banking industry ( A case study of UBA and Fidelity bank )»The impact of insurance industry on the economic growth of Nigeria (A case study of nicon and hallmark insurance companies 2005-2009)»Identification and management of bad debts in Nigeria commercial banks(A case study of UBA plc)»The contribution and effect of computer to modern day banking in Nigeria (A case study of zenith bank and first bank plc)»The use of accounting information in assessing control and performance in an organization (A case study of first bank of Nigeria owerri)