Credit Management and Bad Debt In Nigeria Commercial Banks –Implication For development

Agu, Osmond Chigozie; Okoli, Chuka

doi:10.9790/0837-1234756

Cited by 4 publications

(4 citation statements)

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“…Nonperforming Loans are caused by debtors' failure to pay back their principal and interest when they fall due, which has a negative impact on the creditor's cash flow (Agu & Okoli, 2017). As soon as they are described as nonperforming debt, there is concern that the borrower will not be able to cover the whole amount owed, plus interest (Chelagat, 2020;Awunyo, 2017).…”

Section: Nonperforming Loansmentioning

confidence: 99%

Effect of Credit Monitoring Practices on Loan Nonperformance among Microfinance Institutions in Nairobi County, Kenya

Wafula

Maingi

Bulla

2023

AJERNET

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The Kenyan microfinance industry faces many challenges. Studies point to nonperforming loans as one of the main problems facing microfinance institutions in Kenya, which has led to reduced profitability and institutional collapse in some cases. Noncompliance with credit monitoring and loan policy provisions have been cited as some of the factors leading to increased non-performing loans. The main objective was to determine the effect of Credit Monitoring on nonperforming loans among microfinance institutions in Nairobi County. Information Asymmetry theory guided the study. The study’s main goal was to assess how credit management methods in Nairobi County’s microfinance institutions influence the amount of non-performing loans. The study employed correlation research design where a quantitative approach was adopted. Stratified proportionate random sampling was adopted where data was obtained from 48 microfinance institutions in Nairobi County. The population constituted 192 respondents comprising general managers, credit managers, finance officers, and accountants. The study sampled 128 staff who responded to questionnaires designed on a 5-point Likert scale. Data were subjected to analysis by use of SPSS, where correlation demonstrated possible relationships of variables while regression predicted the effects of changing variables on the defaulted loans. The study found that there was a positive significant effect of credit monitoring practice (β=-0.498, t=-5.099, p< 0.05). The null hypotheses were rejected and alternative hypotheses were accepted that credit monitoring practice had a significant influence on loan nonperformance among microfinance entities in Nairobi County, Kenya. Based on the findings of the study, the researcher recommends that microfinance entities should strengthen credit-monitoring practices to minimize debt writing off and loan nonperformance.

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Section: Nonperforming Loansmentioning

confidence: 99%

Effect of Credit Monitoring Practices on Loan Nonperformance among Microfinance Institutions in Nairobi County, Kenya

Wafula

Maingi

Bulla

2023

AJERNET

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“…But experiences over the years have shown that inadequate credit analysis and sound judgment of loans application have resulted in unperforming loans. Provision of credits according to Agu and Basil (2013), which are in the form of loans and advances, are the total amount of money a given bank lends out to its customers at any given period of time. In providing credits for business ventures, banks should as a matter of importance take all necessary steps to ensure that advances are granted to those customers who can and will make judicious use of loans so that repayment will not become a problem.…”

Section: Introductionmentioning

confidence: 99%

Effect of Credit Management Systems on Loan Recovery Efforts of Microfinance Banks in Akwa Ibom State

Usendok,

Akpan,

Ajibade

et al. 2023

IJBMR

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This study set out to ascertain the effect of credit management techniques on loan recovery efforts by microfinance banks. To guide the study, 3 objectives specific objectives, 3 research questions and three null hypotheses tested at 0.05 alpha levels were formulated. The study covers all microfinance companies operating in Akwa Ibom State. A descriptive survey research design was employed for the study. The population was 85 operations and marketers in microfinance banks in Akwa Ibom State that have been in existence from 2014 to 2017. The sample size was 60 and the stratified random sampling technique was employed. The research instrument used for the study was a researcher- made questionnaire tagged “Credit Management and Loan Recovery Questionnaire” (CMLRQ). The instrument developed by the researcher was face and content validated by three experts in the Faculty of Social sciences, Akwa Ibom State University. All corrections and inputs were built in to the final version of the instrument. The reliability coefficient of the instrument was determined using Cronbach alpha method after the instrument was trial-tested on 20 respondents who were part of the population but not part of the sample. The result showed reliability co-efficient of 0.78. The data generated was analyzed using regression analysis to answer the research questions and to test the null hypotheses at .05 alpha level. It was concluded that Credit appraisal, credit risk control and collection policy were found to be very important in influencing loan recovery. It was recommended among others that Microfinance banks should ensure that credit appraisal is carried out by the technical people who are experienced and competent credit officer in order to stem out those with intolerable credit risk at the earliest possible opportunity.

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“…The effect of the imports of such magnitude to other sectors of the economy is causing great concern to government and scholars (Akudugu, 2013). This predicament will continue to rear its ugly head especially when lowly financial reserve of the smallholding farmer, the farming population is put into considerations to engage into innovative farming activities (FAO, 2021) The aforesaid the farming group financial scenario could be related to among others, the poor rural financial market that exits in most countries in sub-Saharan Africa (Agu, and Okoli, 2013). In effect, most of the farmers satisfy their credit needs through engaging in institutional loan source.…”

Section: Introductionmentioning

confidence: 99%

“…Agricultural credit precisely is necessary in order to take advantage of new technologies in order to boost their production frontiers, enhances the welfare of the poor through consumption smoothening that decreases their vulnerability to short-term income and among others (Olomola;and Ade, 2002;Okonkwo -Emegha, 2018, Achoja andAnarah, 2018). However, empirical studies on the loan repayment performances of the farmers have been with great dismay (Agu and Okoli, 2013;Chaudhary, M. A., and Ishfaq, 2003;Ume, Ezeano and Obiekwe, 2018;Okonkwo-Emegha et al, 2018).…”

Section: Introductionmentioning

confidence: 99%

Loan Repayment and Credit Worthiness of Farmers Under Bank of Agriculture in Enugu State of Nigeria

Kaine¹,

Ume²

2023

njaat

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The loan repayment and credit worthiness of farmers under Bank of Agriculture (BOA) in Enugu State were studied. One hundred and twenty respondents were randomly selected for the study using multi stage random sampling technique. The data for the study were collected using a well-structured questionnaire and interview schedule. Multiple regression analysis and logistic analysis were used to address the objectives of the study. The determinant factors to loan repayment in the study area were off -farm income, educational level and membership of organization. In addition, the factors affecting the farmers’ credit worthiness were distance from the bank, all-weather road, educational level and off-farm income. The need to ensure farmers’ access to educational programme, off- farm income employment and to form or join cooperative society were proffered.

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Credit Management and Bad Debt In Nigeria Commercial Banks –Implication For development

Abstract: This paper examines the causes of bad and doubtful debt in

Cited by 4 publications

References 1 publication

Effect of Credit Monitoring Practices on Loan Nonperformance among Microfinance Institutions in Nairobi County, Kenya

Effect of Credit Monitoring Practices on Loan Nonperformance among Microfinance Institutions in Nairobi County, Kenya

Effect of Credit Management Systems on Loan Recovery Efforts of Microfinance Banks in Akwa Ibom State

Loan Repayment and Credit Worthiness of Farmers Under Bank of Agriculture in Enugu State of Nigeria

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