IMPACT OF COMMERCIAL BANK LENDING ON THE ECONOMIC DEVELOPMENT OF NIGERIA
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IMPACT OF COMMERCIAL BANK LENDING ON THE ECONOMIC DEVELOPMENT OF NIGERIA
ABSTRACT OF THE IMPACT OF COMMERCIAL BANK LENDING ON NIGERIA’S ECONOMIC DEVELOPMENT
The primary goal of this research is to unveil, disclose, and provide a thorough analysis of commercial bank lending and economic development in Nigeria.
Nigeria’s economy and economic development are not encouraging due to the conceptual disregard of ethnic groups and conventions, as well as adaptability in the creation of lending policies by competent authorities and financial banks.
Since the end of the civil war, the agriculture sector of the economy has seen a significant reduction in output.
Industrialization was underutilised, although the commercial sector has always had the blessing of commercial banks at some point in time. It is critical to have adequate performance review of commercial banks now when our economy is in disarray,
because they (commercial banks) are regarded as the most powerful sector of the function they should play in assisting our economic progress.
In a nutshell, the subject of this project study is the impact of commercial bank lending on Nigeria’s economic development.
INTRODUCTION TO CHAPTER ONE
1.1 STATEMENT OF THE PROBLEM AND THE PURPOSE OF THE STUDY
Lending is the act of lending money by a bank. It is also the act of allowing someone to use something temporarily with the idea that it will be repaid or a major manner of investing bank funds. While an impact is a significant impetus or effect on someone.
The purpose of this research is to determine the impact of commercial bank lending on Nigeria’s economic development.
Over lending may result in fund misappropriation and, as a result, repayment difficulties.
Few Nigerians are interested in using commercial bank credit facilities, resulting in poor banking habits among the public.
Misuse and mismanagement of facilities as a result, loans should determine whether the request is in the preferred or less preferred sectors of the economy. Before proceeding, the bank must ensure that the lending is profitable.
The goal of the research
The goal of this research is to empirically examine the influence of commercial bank lending on Nigeria’s economic development and, in light of the financing, make recommendations on how to remedy the bank lending problem.
1.2 THE RATIONALE FOR THE STUDY
If this study is successful and the recommendations are implemented, we can change the country we reduce lending, which can systematically attract the much required conditions to reduce poverty in the banking industry in Nigeria.
1.3 SIGNIFICANCE OF THE STUDY
The study’s relevance is to attain more success in providing what little researcher can. There is growing acknowledgment that the banking industry, particularly commercial banks, must play a larger role in the country’s economic development.
In general, any economy, including those of the world’s wealthy countries, need consent surveillance, which can only be obtained through analysing the components of that economy. Any area that is missed will, in the long run, be like a drop of ink that colours an ocean of water.
In light of the foregoing, this study will go a long way towards bringing to light the problem and prospect of the Nigerian economy as an exponent of commercial bank lending; the problem, once identified, will be half solved, and the prospect, once recognised, will be encouraged to be improved on.
Many respondents were hesitant to provide the necessary information since it related to financial. People use continuous techniques when providing or answering questions about finance.
Similarly, as students, the researcher was confined to gathering information from the library, journals, periodicals, newspapers, and inquiries from surrounding banks.
As a result, the researchers concluded their assessment and analysis on material information in reference to the researcher’s demands in reaching their objectives.
1.4 BACKGROUND OF THE STUDY
This research is likely to benefit the Nigerian economy and national development. Lending in Nigeria has been gradually increasing for many years.
Savings mobilised by banks are invested in many ways, according to Dr. J. Orjih (1996) Element of banking. Lending is a popular strategy for banks to invest their funds. Beak holds the money that the bank receives from its customers as debtors, and the money is repayable on demand.
Because of the banks’ bankrupt status, they exercise caution while handling depositor funds. They follow several principles known as cannons of bank lending, which are key elements that a banker should consider before issuing a loan or overdraft to a consumer. They consist of
Customer integrity and dependability
The customer to whom the loan should be issued must be extremely dependable and of unquestioned honesty. The lending bank must request information on the customer in order to make an informed choice on the lending proposal.
The loan’s intention
The bank should determine the objective of the loan; this is critical since the bank must adhere to certain internal and external operating policy requirements while lending.
Security
After the customer has passed all previous tests, this factor is assessed last. If all other considerations fail to operate as expected and repayment becomes uncertain, the bank will resort to security.
DEFINITION OF TERMS
These are some definitions of terminology used in this study. They are as follows:
Bank commercial
These are primarily significant retail banks that focus on borrowing (including deposit acceptance and lending).
Lending
Lending is a method of putting bank capital to use.
Fund
This is to spread out a debt over a long period of time at a set interest rate.
Economic advancement
This is the process through which a country’s real capital income increases over a long period of time as a result of increased productivity in various sectors of the economy.
Mismanagement
This means to handle something incorrectly. Mismanagement of natural resources or the economy, for example.
Profitable
This is a condition in which profit or benefit can be gained or a beneficial investment can be made.
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