This project work was written on the Impact of Inflation on Bad Debts In Nigerian Banking Industry.
Since an organization is an integrated system of activities in achieving some aims or objectives, it is therefore necessary to involve some plans, processes for the effectiveness and efficiency of the Banking Industry.
The sample of 80 respondents are to be used and the method of sample will be random sampling.
This study will be carefully planed to look into the Impact of Inflation on Bad Debts In Nigerian Banking Industry. (A Case Study of Union Bank of Nigeria plc Ilorin Branch.)
Chapter one contain introduction, background of the study, statement of the study, the need for the problem , the scope of the study, the signifianbce of the study, the objective of the study, and definition of the terms.
Chapter Two contain, literature review, Review on Inflation and bad debts, bank credit, causes of bad debts, debt recovery, Advantage and disadvantage of inflation, causes of inflation, effect of inflation, control of inflation.
Chapter three contain, Research Methodology, Historical Background of the Banking Industry, method of Data collection, the effect of inflation on bad debt in Banking Industry, Growth and Development of Band debt.
Chapter four contains, Data presentation, Analysis of data and Interpretation of data.
Chapter five contains summary, conclusion, recommendation, and bibliography.
TABLE OF CONTENT
- Background of the study
- Statement of the study
- The need for the problem
- The scope of the study
- The significance of the study
- Objective of the study
- Definition of the terms
- Review on inflation and bad debt
- Bank credit
- Causes of bad debts
- Debt recovery
- Advantage and disadvantage of inflation
- Causes of inflation
- Effect of inflation
- Control of inflation
- Historical background of union bank
- Method of data collection
- The effect of inflation on bad debt in union bank
- Growth and development of bad debt
- Analysis of data
- Interpretation of data
Bed debts are usually associated with the function of commercial banks and the incidence of bad debt remain as told as the essential function itself. Commercial banks like other business entities have one objective of being in business maximize their profit since banking is service industry.
Commercial bank also strive to give efficient service to their customer at all time to make profit and remain in banking business.
Therefore, commercial banks most learn in other to earn interest, which provides the revenue commercial bank can lend on loan or over draft to their customers, the choice of facilities repayable could be agreed installment over a good period of time while an over draft is short time which could be involving and required to be made good after one year. An over drat facility is the working capital of the business man.
The lending function of the commercial bank can only be accomplished if such commercial, bank are in a position to collect deposit from other lending and the size and mode of lending loan an advice constitute a greater proportion of credit available in the economy, lending therefore, helps to satisfied the legitimate credit needs of the society. Credit like money finds its main function in the production and service in facilitating the exchange of good credit has also help to make possible modern like scale production and wide spread division of labour.
Because of the direct impact lending can have any economy, government all over the world usually integrate the activities of banks in to policy formulation. The commercial banks intermediation ruled in the economy is highlighted in the deposit creation lending of those banks. While the commercial banks collect deposit from those who have surplus funds, the part give out part of this funds to those who required more funds to expand an existing business or established in a new one.
The depositor’s relationship with their banks is base mainly on their mutual trust while it is known from experience that all depositors can not call for their deposit at the same time commercial bank must always ensure that these are always a find to meet depositors requirement.
In addition to the profitability and efficiency objective of commercial bank therefore the needs for sounds liquidity at all time is always emphasized.
The liquidity object of commercial banks compelled most commercial to lend on short term basis since most of their deposit is kept over a short period of time the depositor’s fund, which form the lenders working capital required prudent management if the working capital is to grow and not depleted. This position explain the reason why commercial banks take time to study business requesting for financial assistance.
The bank manger and other officers appointed to give surplus of these credit appraise each proposes thoroughly ensuring their can on of lending which improved purpose and the amount required the sectorial classification of the loan required, the proprietors stake in the business and the security offered.
Experience has shown however that money business that were appraised and which appeared attractive in the past continual of fall in recent years Nigeria now funds herself.
Many business that appeared initially attractive failed because they can no longer obtain raw materials with which to produce some failed because they can not raise enough local currency to produce spare parts for their grounded machine while some find the current cost of capital too much to bear such business try to avoid the repayment of both interest and principal debt against them by switching to other banks.
Business failures have for reaching effect on the ability of borrowers of banks fund to repaid their debts. The resultant effects if these failure is the ever growing incidence of bad debts in Nigerian banks for example union bank which is the one of three leading banks in the country has had an unpleasant share of the burden of those debts.