Effect of Bad Debts in Nigeria Money Deposit Banks in Nigeria A Case Study of First Bank of Nigeria Plc

ABSTRACT

This project studied the management of bad and doubtful debts by Nigeria commercial banks. It noted problems associated with the wide spread development of bad account by banks as being occasioned by so many changes that are unfolding as a result of the deregulation of the Nigerian Financial System. It viewed the incidences of bad debts as one of the greatest problems facing both old and new generations of banks today with adverse consequences on their profitability level. This project traced the origin of bad accounts to a number of factors some which may be internal, external or by act of God. e.g. the death of the owner of business. It was help that an account becomes bad the very day the facility is granted. Carelessness on the part of lending officers and his inability to interpret and respond promptly to warning signals may cause an untold loss in addition collusion by lending officers with the borrowers and absence a clearly defined lending guideless by banks may be responsible for high loan default. It is even difficult to identify control once a facility has been agreed by management.

The most effective way of limiting one’s losses however is to stop paying out but trading margins are particularly important.  

TABLE OF CONTENT

TITLE PAGE                                                                                          i

CERTIFICATION                                                                         ii

DECLARATION                                                                           iii

DEDICATION                                                                                        iv

ACKNOWLEDGEMENT                                                               v

ABSTRACT                                                                                  vii

TABLE OF CONTENTS

CHAPTER ONE

1.0     Introduction                                                                                1

1.1     Background of the Study                                                           1

1.2     problems of the Study                                                                4

1.3     Objective of the Study                                                                4

1.4     Significance of the Study                                                           6

1.5     Research of the Study                                                                8

1.6     Plan of the Study                                                              9

CHAPTER TWO  

2.0     Literature Review                                                             10

2.1     Meaning of Bad Debt                                                                  10

2.2     Management Of Bad Debt                                                          11

2.3     Effects of Bad and Doubtfully Debts                               18

2.4     Risk Analysis                                                                              22

CHAPTER THREE       

3.0     Research Methodology                                                                25

3.1     Historical Background of First Bank                               25

3.2     Sample and Population of the Study                               26

3.3     Population                                                                                   28

3.4     Method of Data Analysis                                                  29

3.5     Validity of Instrument                                                                31

3.6     Administration of Instrument                                          32

3.7     Observed Problem                                                            33

3.8     Limitation of the Study                                                    36

CHAPTER FOUR

4.0     Data Presentation and Analysis                                                 38

4.1     Data Presentation                                                                       38

4.2     Data Analysis                                                                              41

4.3     Test of Hypothesis                                                            47

4.4     Findings                                                                                      49

CHAPTER FIVE

5.0     Summary, Conclusion and Recommendations               51

5.1     Summary                                                                                    51

5.2     Conclusion                                                                                  55

5.3     Recommendation for Improved Management                 

of Bad Loan                                                                                57

REFERENCES                                                                             59