BANK LENDING POLICIES AND RECOVERY PROCEDURE IN NIGERIA

ABSTRACT

This term paper was tailored at designing bank lending policies and recovery procedures in Nigeria. The piece of work looked into bank services and the rules that guide their monetary policies.

Research was carried out on ways of improving bank lending policies and good measures on how money could be recovered. Recommendation for the future improvement ion this policies was described.

I vividly described procedures for taking securities for Bank lending. To those in the financial industry, this piece of work could serve as a reference manual to them.

The manual can also educate people on the roles of Banking in economic development of Nigeria.

CHAPTER ONE

1.0     INTRODUCTION

A bank could be described as a major financial institution, other such institution include finance house, insurance companies, mortgage companies etc. the main function of these financial institution are to provide financial support to those who are in need. Apart form this function, banks perform other functions like rendering advice and counseling, acceptance of deposits, provision of loans and advances of providing a safekeeping place for people valuable many banks plays intermediary roles in the financial sector of the economy which focus primarily on the following.

1.     Moderation of the rate of inflation

2.     reduction of pressure on the external sector so as to achieve a sustainable balance of payment positions.

3.     establishing the Naira exchange rate in Nigeria

banks could be classified into the following categories below.

a.     Central bank

b.     Commercial bank

c.      Merchant bank

d.     Development bank

e.      Community bank.

Obviously, with an observer first contact with a developing economy, all those categories of bank plays crucial roles in stimulating the economy. They deal with members of the public.

Firstly, they all provide first information and investment advice to willing customers community banks for instance, were established primarily to spread banking services to the grass root, considering the fact that a greater percentage of the country’s population reside in the rural areas.

Development banks by implication tend to carry out their function effectively because they diversify into specialized areas such as agricultural and industry. Example of development bank are the Nigeria Agricultural and industrial development (NACB) and Nigeria industry development bank (NIDB). Hence the development of economy is stimulated through these agency function.