AN EVALUATION OF THE IMPACT OF CREDIT INSURANCE ON BANK PERFORMANCE IN NIGERIA

This research work is carried out with a view to Evaluate the Impact of Credit Insurance on Bank Performance in Nigeria, a case study Union Bank Of Nigeria Plc. So far, the above has been the purpose of the study, and while in the course of doing this work, questionnaire, journals, publications, prudential guidelines by “Regulating Bodies CBN, Banking Act, NDIC Act, Union Bank Annual Report and other relevant instruments in credit insurance in commercial Banks were reviewed. The Central bank of Nigeria and other regulators should focus attention on identifying potential problem debts in the banks and ensure that banks properly classify loans according to predetermined criteria based on the loan servicing record and make appropriate provisions for non-performing loans. Unless this is done, the credit insurance measures are virtually meaningless. Simple percentage was used to analyse the demographic data while the ordinary least square (OLS) econometric method was used to examine the implication of the regulator’s directive on problem-loans i.e. bad debts. The results of the analysis showed that the credit insurance levels of bank in Nigeria (Union Bank Nigeria Plc) enhanced bank performance. Some of the recommendations made in the research project are that priority should be given to the quality of management of banks, good credit policy and control should be put in place and reviewed regularly and a functional internal central system should be established in order to prevent the incidence of problem-loan in the banks.

TABLE OF CONTENTS

CHAPTER ONE: Introduction

1.0       Background to the Study

1.1       Statement of Research Problem

1.2       Research Questions

1.3       Research Objective

1.4       Scope of the Study

1.5       Purpose of the Study

1.6       Significance of the Study

1.7       Formulated Hypotheses

CHAPTER TWO: Literature Review

2.1       Introduction

2.2       Conceptual and Theoretical Framework

2.3       Operational and Credit Guidelines

2.4       Lending Procedure in Nigerian Banks

2.5       General Reasons of Credit Risk

2.5.1    Detection of Credit Risk Loans

2.5.2    Cost of Credit Risk

2.5.3    Collection of Problem Loans

2.6       The Impact of Bank Credit on the Economy System

2.6.1    Credit Analysis by Banks

2.6.2    Forms of Credit by Banks

2.6.3    Credit Control by Banks

2.6.4    Importance of Credit Control

2.6.5    Restricting Bad Debt

2.7       Legal Framework for Management of Bank Credit Risk: Bank Credit

2.8       Prudential Guidelines Given By SAS

2.8.1    Major Provisions of the Guidelines

2.8.2    Credit Portfolio Classification

2.8.3    Provisioning

2.8.4    Required Provision for Non Performing Credits

2.8.4    Accruable Interest

2.8.5    Off-Balance-Sheet Items

2.8.6    Some Implication of the Provision of the Guidelines for Banks

2.8.7    The Level of Provisioning

CHAPTER THREE: Research Methodology

3.1       Introduction

3.2       Methodology

3.3       Research Design

3.4       Sources of Data

3.5       Sample Size

3.6       Method of Data Analysis

3.7       Decision Rule

3.8       Restatement of Research Hypotheses

CHAPTER FOUR: Data Presentation, Analysis and Interpretation

4.1       Introduction

4.2       Analysis of Questionnaire

4.3       Testing of Hypotheses and Interpretation

4.3.1    Restatement of Research Hypotheses

4.3.2    Testing of Hypotheses

4.3.3    Hypotheses Being Tested

4.3.4    Testing Hypothesis One

4.3.5    Testing Hypothesis Two

CHAPTER FIVE: Summary, Conclusion and Recommendations

5.1       Summary of Findings

5.2       Conclusions

5.3       Recommendation

References

Appendix: Data Table/Questionnaire