AN OVERVIEW OF THE RISKS ASSOCIATED WITH BANK LENDING IN THE BANKING SECTOR. A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
An overview of risk associated with bank loading in the banking sector is a topic Chosen from the financial field.
The purpose of this research work is to identify the factors and effect of risk in the financial institutions with special reference to banks.
This research work will expose us to:
2. find out the extent to which risk is associated with lending in the banking sector.
3. Find out the need for effective & efficient of risk in the growth of banks.
4. Find out the need for effective & efficient analysis of risk inherent in bank lending.
Risk as we know it, is an action taken with varied and unlimited certainty, when applied in the course of lending several options and end points are obtained.
Why do you lent?
As bankers we lend to fill the gap created from those having deficit to those having surplus, but at a profit.
In the course of lending, several things have to be noted, investigated, amitiorated and controlled, ranging from industry risk, credit risk, price risk, micro economic instability, fluctuation in govt policy, globalization etc.
In chapter one of this study, we shall attempt to introduce the concept of risk and illusidate on its core and periferials.
Chapter two comprise of the literature review whereby we shall by to harmonize past and present data/events as regards to risk as expanciated by several leading authors and authorities.
Chapter three comprises of the made made at which the questionnaires were distributed, oral & written interview carried out and mode at which information were sourced.
1.1 BACKGROUND OF THE STUDY
Banking can be aptly described as a high-risk business. For this reason a lot of attention is directed at risk management in banking. The need of such emphasis on risk management becomes even more urgent as banks go apple with large volumes of non-performing assets. This thinking is shared by Rose (1987:54), who points out that while the 1950s focused on techniques for the management of banks assets and the 1960s and 1970s emphasized liability management banking in the eighties was concerned with risk-how to measure risk and how to control risk for the betterment of banks and its customers. This view of risk remains true and on issue for bank management in the lending functions.