MANAGEMENT OF BAD DEBTS IN MICRO FINANCE BANKS IN NIGERIA ( A CASE STUDY OF SIX SELECTED MICRO FINANCE BANKS IN ANAMBRA STATE)

Articles on this site are extracts from literature review of research projects, Get the full Project

CREDIT AND DEBIT MANAGEMENT The place of banks in national economy is a significant one, which acts as prime mover of the economic life of any nation. The importance and  significance of banks with respect to economic and social development of a nation cannot be under emphasized. Banks are known to perform many functions of deposits; mobilization and tending which is perhaps to most significant of their functions. Indeed the two prime functions portray banks as the agent who redirects funds from the surplus sector to the deficit sector while earning a comfortable margin surplus sector and then selvey for their services as the intermediaries. Whole deposit mobilization can be categorized as a relatively executing activity. Lending is essentially a logical follow up of deposit mobilization. The banks are responsible for the safety of funds entrusted to them, while also responsible for channeling the funds to the owners. The quality of the banks fund lending decision significantly  determines the banks ability to effectively play the role they have assumed. Apart from the fact that lending is a significant function of the banks. For the above reason, loans and advance have been found to constitute the largest proposition of the banks assets and assets possess the highest rate of return released to the other alternative investment. This is to determine the various techniques of methodologies of credit, the appropriate combination of these techniques so as to achieve success and minimize losses were not in banks credit and lending activities, this basic aim offers the opportunity to bridge the gap between savings and investment in the economy. Credit management also involves monitoring of operations of account at the branch bank have been taken for a ride in the past by “smart” customers, who give the impression that turnover was being done, granted by then, where all that was being done kite flying or cash recycling. Adekowary (1986) acquired that a customer who indulges in this practice usually have two or more accounts at two or more different banks or branches he draws a cheque on his account. The bank knowing fully well that there are no funds in that account with the bank, he then draws all the uncollected funds out at bank “P” and immediately deposits in bank ”x” another cheque drawn on non-existence funds in his account by bank “T”. This is a simple example of kiting, by this, it means a customer can fraudulently make use of bank funding without proper authority. Bank staff must therefore watch program operation on customers’ account closely and report unusual activities to their managers. However, some indication of kiting suspect as recently enumerated by Kotawa of (Savana Bank) as an experienced operating officer are;

  1. Consistent increase in deposit amount
  2. Excessive account activities in relation to type of account, that is, high turnover with constant daily balance.
  3. Depositors usually concern with daily states of account
  4. A pattern of daily deposit made to cover cheque received  for payment on the current day and finally
  5. Frequent purpose of the customers related to company or other banks

OTHER QUANTITATIVE CREDIT MANAGEMENT TECHNIQUE This involves the control through loan disbursement and other drawn down conditions. Olalusi (1989) argued that no loan should be disbursed to the customer when necessary agreement forms have not been duly completed by the customer or the security document have been signed yet. Osiayemia (1981) maintained that there are dangers Inherent in providing a personal or corporate body with much or two little fund at a given moments. The loan disbursement is therefore linked with the flow cycle of the customers hence an appropriate disbursement arrangement must be applied. Also to be applied are certain empirical disbursement criteria and consideration is specific type of credit such as housing loan, agricultural loans and over draft for specific purpose.

SECURITY CONSIDERATION IN DISBURSEMENT INCLUDESLoans should not be disbursed until customers satisfied all security formalities. The danger of allowing him to drawn down the loan while he is yet to comply with the security documentation cannot be over emphasized. When drawn down has not been effected, customer is over willing to co-operate to finish the required documentation which is not always the case once he has the money. No disbursement should be allowed against anticipating approvals. Valid approvals needs to be attained from the approving authority before disbursement is allowed because jumping the gun in loan disbursement is dangerous as the banks position maybe jeopardized by opting it in a fail accomplished position. Finally all disbursement should pass through the customer’s current accounts.

DANGER SIGNALS ON BAD AND DOUBTFUL DEBTS Dangers signal are usually not lacking through sometimes they descend like sudden foundation without prior notice with experience instinct for sensing and spotting troubles. The following points will serve as a useful question;

  1. Excessive rigidity in the accounts for examples difficulty in obtaining cover for cheque, dividing monthly saving low or non-existence turnover on the account.
  2. Evidence of delay in payment of trade accounts
  3. Long debt in producing financial statement particularly audited account
  4. Heavy borrowing from other sources
  5. Inability to meet loan installment
  6. Increase in number of cheque being jopped at customer instances or returned from lack of funds
  7. Poor quality of current assets
  8. Failure to honour banks, inculcate to come for discussion particularly in the customers used to make enforcement calls at the Bank in the first.

CAUSES OF BAD DEBTS IN MICRO FINANCE BANKS In the Nigeria context, there has been increasing trends of bud and doubtful debts in the banks and bankers and their shareholders and also the government officials are begging to show concern on this issues by making pronouncements insisting on the need to correct the situation. However, for effective coverage on organized reviews the causes of bad debts in micro finance banks are as follows;

.

Click Here To Get The Complete Project »

How To Write Chapter Three Of Your Research Project (Research Methodology)

  • Methodology In Research Paper


    Chapter three of the research project or the research methodology is another significant part of the research project writing. In developing the chapter three of the research project, you state the purpose of research, research method you wish to adopt, the instruments to be used, where you will collect your data, types of data collection, and how you collected it.

    This chapter explains the different methods to be used in the research project. Here you mention the procedures and strategies you will employ in the study such as research design, study design in research, research area (area of the study), the population of the study, etc. You also tell the reader your research design methods, why you chose a particular method, method of analysis, how you planned to analyze your data.

    Your methodology should be written in a simple language such that other researchers can follow the method and arrive at the same conclusion or findings.

    You can choose a survey design when you want to survey a particular location or behavior by administering instruments such as structured questionnaires, interviews, or experimental; if you intend manipulating some variables.

    The purpose of chapter three (research methodology) is to give an experienced investigator enough information to replicate the study. Some supervisors do not understand this and require students to write what is in effect, a textbook.

    A research design is used to structure the research and to show how all of the major parts of the research project, including the sample, measures, and methods of assignment, work together to address the central research questions in the study. The chapter three should begin with a paragraph reiterating the purpose of research. It is very important that before choosing design methods try and ask yourself the following questions: Will I generate enough information that will help me to solve the research problem by adopting this method?

    Method vs Methodology

    I think the most appropriate in methods versus methodology is to think in terms of their inter-connectedness and relationship between both. You should not beging thinking so much about research methods without thinking of developing a research methodology.

    Metodologia or methodology is the consideration of your research objectives and the most effective method and approach to meet those objectives. That is to say that methodology in research paper is the first step in planning a research project work.

    Design Methodology: Methodological Approach

    Example of methodology in research paper, you are attempting to identify the influence of personality on a road accident, you may wish to look at different personality types, you may also look at accident records from the FRSC, you may also wish to look at the personality of drivers that are accident victims, once you adopt this method, you are already doing a survey, and that becomes your metodologia or methodology.

    Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident.

    The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter.

    Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.