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Significance Of Bank Credit To The Development Of Nigeria Economy
[A CASE STUDY OF UNITED BANK OF AFRICA PLC, ILORIN]
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These four expatriate bank have since been joined by many other varied national interest the Banking sector in Nigeria has undergone significant trans for motion both in term of number and product creatively and the level of operation which was a result of economic reform embodied in the structural adjustment programme (SAP) in 1986. In term of growth in the number of banks, the commercial bank operating during that year were 12 with 27 branches nation wide, this number grew to 54 with 2193 branch for the commercial bank and 38 with branches for the merchant bank in 2000 with the introduction of Universal Banker's in 2001. However, in 2003 and 2004, the number fell to 89 and 87 respectively.
In order to make Nigeria bank globally competitive, the central bank of Nigeria, July 6, 2004 announced a reform programme for the national banking industry, the main thrust of which required the 89 deposit money bank their the system to raise their capital base to minimum of #25 billion each through injection of French capital and or mergers and acquisition.
At the close of first phase of the consolidation program in December 2005, 25 banks, have emerged having met the minimum capitalization requirement through mergers, acquisition and injection of fresh capital.
However, at the expiration of the December 31, 2005 deadline, 14 banks failed to secure merger partners and were not able to make minimum capitalization requirement in their own.
1.2 STATEMENT OF THE PROBLEM
Banks make most of their profit from lending but there are some problems limiting the ability of bank to lend. However, this study provides solution to the problem of bank credit and some of the problems are.
[i] Operation of Central Bank in regulating the volume of money in circulation for example the uses of Bank rate open market operation, special directive and cash deposit ratio.
[ii] Inability of borrower to present acceptable security to bank.
[iii] Unwillingness of customer to deposit their money in the bank.
[iv] Less liquid cash label to the bank.
[[v] Unwillingness of some bank to grant loan in order to avoiloan in order to avoid drain and a particular bank so that they can meet their customer deposit with drawer
[vi] Unwillingness of member of public to borrow from the
bank.
vii] High interest rate charged by commercial bank on loan granted to public.
1.3 OBJECTIVE AND PURPOSE OP THE STUDY
This study is aim to examine the impact of bank credit to development of Nigerian economy.
Secondly to expose the prospective investors to various credit available in the bank, which the banks are ready and willing to grant such investors provided they meet-up the require for the credit facility.
The research, also feels obliged, to let the reader of the project, know how the bank, through its credits helps, in encouraging small scale firms towards the development of the nation's economy.
Finally, after a thorough perusal of this project, reader will come to know who is qualified to apply for bank credit the procedure for obtaining such credit and how such credit mist be applied.
The project will not fail to commend the bank for its services and give recornmendation on where necessary, hence, thus who are business oriented but do not have the mean or resources to execute such business, will arrive maximum benefits from the write up since it will expose those to the various bank credits opened to them and how it can graded to
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