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Challenges to bank loan recovery - case study of First Bank Plc, Makurdi

 Department: Banking and Finance  
 By: usericon Johngrey  

 Project ID: 4663
   Rating:  (3.1) votes: 16
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   Price:₦3000
Abstract
This 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 ...
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