LOAN SYNDICATION AS AN ALTERNATIVE BUSINESS FINANCING STRATEGY IN NIGERIA, A SURVEY AND SYNTHESIS. (A CASE STUDY OF UNION BANK OF NIGERIA PLC NEW MARKET ROAD ONITSHA)

INTRODOUCTION
    The velalive insufficiency of fund for capital investment is a common factor in every economy especially in developing counties of the world. In developing counties like Nigeria; the low level of capital investment manifest in high unemployment rates; low productivity and corresponding low standard of living for greater majority of the population.
      Finding a solution to this problem of providing fund for capital investment has been a major  pre-occupation of financial institutions in Nigeria. Beyond the traditional term loan; share offers; bonds and on; business organizations and   financial institutions alike have sought out avenue to tackle the problem of insufficient fund for capital investment. One of the solutions they have come up with is syndicated load or multiple  credit facilities , which is aimed at spreading risks and weakening the impact of restricting laws and regulation on lending by financial institutions .
    Syndicate has been defined as an association of industrialist , or financial or banking consortium forced to carry out some industrial projects .
Accordingly, loan syndication is basically defined as an agreement between two or borrower with credit facility utilizing common loan documentation.
The spectacular growth of loan syndication as an alternative financial instrument for business organization occurred as response to several economic factors in Nigeria. Notable among these were:
-    The National industrial policy of 1989, which is aimed at achieving, accelerated pace of industrial growth in Nigeria economy.
-    The Introduction of structural adjustment programmed in 1986, culminating in the establishment of foreign Exchange market (F E M) and depreciation of the aria, This made imported machinery and equipment very expensive and requiring hung capital outlays which most companies or financial institution can not comfortably afford. 

-    Restriction on credit expansion by government and monetary authorities to minimize inflation. Central bank of Nigeria dose not included syndicated loan finance with in the credit checking, banks are there fore, able to syndicate loans with out interfering with the credit ceiling.
-    The scrapping of import license regime which enabled more users of imported equipment and machineries to source and bring into the country.
-    Deregulation of interest rate made loan syndication attractive to both business organizations and financial institutions. The above factors concerned with the persistent domestic inflation and arising cost of domestic production have increased the magnitude of credits demand by vanoys users of fund particularly the industrial producers.

    In addition, there are certain legal and regulatory limitations on lending activities of commercial and merchant banks such as the statutory lending limit as provided in the banking act of 1969s. 13 (1) , the liquidity requirement ,e t c . In order to surmount these legal and regulatory limitations on lending activities of commercial bank (union bank) and merchant banks, loan syndication has become an attractive credit delivery technique aimed at spreading risks reducing the impact of the restricting laws and regulations.

    Currently, there exists no comprehensive enacted law on loan syndication in the country as to regulate the activities of the financial institution that lead and participate in the syndication. What is perhaps significant about loan syndication in the country is not the rapid growth of the financial institutions involved loan syndication, but their activities which have been quite remarkable over the years.
    Also, the study of the extent to which union bank of Nigeria plc. Employ syndicated loan as an alternative financing means with particular reference to Anambra and Enugu states respective financing means with loan as an alternatively have been carried out in this study. The researcher carefully appraised all aspects of loan syndication as financing alternative in the country from the point of view of the borrower. It is also made clear in this work that consideration of numerous merits of syndicated loan financing as against its demerits. It is not to be used as a last resort but should be considered alongside with equivalent alternatives. All these notwithstanding the most important of this study (it empirical study) is to know the popularity of syndicated loan financing among business organization in the country and the extent to which they employ it as financing alternative, no such study has been carried out in Nigeria. 
    For the empirical study, Anambra and Enugu State respectively have been chosen due to constraint imposed by cost and short-term on the researcher, otherwise the researcher could have conducted the survey throughout the country.