TABLE OF CONTENTS
1.0 INTRODUCTION 1
1.1 BACKGROUND OF THE STUDY 1
1.2 STATEMENT OF PROBLEM 3
1.3 OBJECTIVES OF STUDY 4
1.4 SIGNIFICANCE OF THE STUDY 4
1.5 LIMITATIONS OF THE STUDY 4
REVIEW OF RELATED LITERATURE
2.1 HISTORICAL DEVELOPMENT OF COMMERCIAL BANKING IN NIGERIA 6
2.2 STRUCTURE OF THE NIGERIAN
COMMERCIAL BANKS 10
2.3 FUNCTIONS OF COMMERCIAL BANKS 12
2.4 LOANS AND ADVANCES BY COMMERCIAL BANKS16
2.5 LOAN AND ADVANCES TO PREFERRED AND LESS PREFERRED SECTOR 20
2.6 IMPORTANT OF LOANS AND ADVANCES TO THE PREFERRED 20
2.7 FACTORS THAT AFFECT GRANTING OF LOANS22
RESEARCH DESIGN AND METHODOLOGY
3.1 SOURCES OF SECONDARY DATA 26
3.2 LOCATION OF DATA 26
3.3 METHODS OF DATA COLLECTION 27
RECOMMENDATION AND CONCLUSION 30
THE APPRAISALS OF COMMERCIAL BANKS
SECTORIAL DISTRIBUTION OF LOANS AND ADVANCES
Commercial bank is a financial institution or banks that specialized in keeping money and other valuable safely and in granting short term loans, Advances to individuals and corporate bodies.
This project topic in chapter I will state the introductory aspects of commercial bank and their ability to influence economic activities through creation and distribution of loans and advances to their customers being the preferred and less preferred sectors of economy.
Chapter 2 will base on the evolution of commercial banks, their functions and the C.B.N. guidelines towards the distribution of loans and advances to the various sectors. It will also state the objectives of commercial banks towards the distribution of loans and advances which is profit maximization.
Chapter 3 will be the method which I will use on the research topic which is secondary data like Newspapers, textbooks and Journals for more information needed for the topic and for the topic to be well emphasize so that I will benefit from the information.
In chapter 4. I will discuss the findings towards the topic like the solutions of the problems that will be encounter by Commercial Banks.
Chapter 5 will discuss on the concluding aspects or parts of the topic which means how Commercial Bank should abide by the rules and regulation guiding them when lending which will put inflation to an end in our economy.
1.1 BACKGROUND OF THE STUDY
I got interested in the topic of this project owing to the fact that the preferred sector of the economy is being marginalized in its attempt to secure loans and advances from the Commercial Banks.
The Commercial Banks with their ability to influence economic activities through the creation and distribution of money has become the major focus of monetary activities.
The Central Bank of Nigeria has through the years sought ways and means of mobilizing funds for the development of the country’s economy.
Though equipped with various instrument of controlling and directing credit, the Central bank has found the method of credit guidelines most effective in directing credit to specified sectors of the economy.
Thus, the government has through the Central Bank succeeded in directing the Commercial Banks sectoral distribution of loans and advances. It is not always easy to set guidelines and expect full compliance. Guidelines have always been set to achieve certain objectives and the achievement of such objectives are always dependent upon full compliance by those affected by the guidelines.
The Central Bank of Nigeria guidelines on sectoral distribution of loans and advances are aimed at developing the productive sectors of the country’s economy as well as curbing price inflation.
The Commercial Banks who are expected to follow the Central Banks guidelines have their corporate objectives of making profits, the Commercial Banks have auxiliary objectives of meeting the demands of their shareholders, customers and government.
Therefore, the research problem rests on whether the Commercial Banks will be able to show full compliance with the Central Banks guidelines in the light of the risk involved and the lending rate prescribed for lending to the preferred and less preferred sectors of the economy.
1.3 THE OBJECTIVES OF THE STUDY
The objectives of this research project can be stressed as follows:
- a. To find out whether the Commercial Banks give out loans and advances to the preferred sectors of the Nigerian economy.
- b. To find out whether the Commercial Banks give out loans and advances to the less preferred sector of the Nigerian economy.
- c. To find out what makes up the preferred and less preferred sectors of the Nigerian economy.
1.4 SIGNIFICANCE OF THE STUDY
This research project will be of immense benefit to the academic world in the sense that it will stimulate future research.
It will equally be of immense benefit to the federal government of Nigeria in the sense that the activities of Commercial Banks affect the economy as a whole.
The study will also be of advantages to the business world and customers who wish to know why they are not given long term loan as requested by them.
1.5 LIMITATIONS OF THE STUDY
The study into Commercial Banks sectorial distribution of loans and advances is an inexhaustible one but the researcher could not be able to achieve much as she liked due to time constraint.
Another limitation is lack of statistical data. All the necessary data required for this research project would not be brought owing to non availability and also the reluctant attitude shown by some workers in the places where these data were to be collected.
Also, pressue from classwork added to the limitation of the project because as there are so many assignments to be written and submitted within a stimpulated time, it could be very difficult for the researcher to be combining classwork and writing of project.
Another thing is financial constraint.
There was no money to run around to collect more data on the topic.
There was therefore no option but to use available data and journals.
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