Credit Management And Bank Lending

Commercial bank are profit-making venture and as such they share with other business the same set of expectation concerning the health of the economy.
It is in the light of this that they make loans available to borrowers on interest, which is a source of profit to them. Along side the growth of the credit sector is the growth of the bad debt among other to poor credit management.
The hallmark bank limited like most other bank has recorded a high inadence of bad debt and has one of the years declared loss in 1994. The bank purpose is to find out the cause of the bad debt and suggest the possible solution to the bank poor credit management.
In order to archive the objective, the writer set out some hypothesis which were tested with the following; statistical techniques, sample percentage, chi-square, (Yates’s correction method) and candells coefficient of concordance . The information requirements for this research were generated from the secondary data and primary source through the use of questionnaire.
The hallmark bank limited, which is essentially a private bank, has been confronted by a lot of problem, which is responsible for his poor credit management as revealed by the writer’s analysis. It is shown that the bank has inadequate credit assessment and control mechanism. The analysis shows that there is a significant relationship between the level of loan granted by the bank and the profit made. The bank granted considerable amount of unsecured loans, which pared way for high level of default, which characterized it. Giving this problem that are face by the bank, the writer made some recommendation amongst others
1. That the bank be changed to a public liability company
2. The bank should adopt a planning strategy to forecast and predict their business and behavioral element, which causes bad debt.
3. Men of integrity should be offered job in the bank
4. The board of directors should reduce to minimum, there interference I the process of loan administration.