Credit Administration in Commercial Bank.


This research work was undertaken to assess the CREDIT ADMINISTRATION IN COMMERCIAL BANK (A CASE STUDY OF UNITY BANK NIGERIA PLC). This work was intended to achieve the following objectives: to appraise and determine the lending procedure of banks, to highlight the extent to which improper project evaluation influence bad debt of Money-Deposit Banks.

Relevant data were collected from both primary and secondary sources. Questionnaire was the main primary data collected instrument employed while data from various relevant publications constituted the sources of secondary data. Upon the analysis of data, the following conclusions were drawn; that sound lending requires a clear-well articulated and easily accessible policy document which spells out the philosophy of lending.

On the basis of the above findings, it was recommended that banks should ensure that loans given out to customers should be backed by adequate collateral security. Finally, it is the opinion of the researcher that the management of the Money-Deposit Banks should prevent the incidence of bad debts in Nigerian Banks. 


In a modern economy, there is distinction between the surplus economic units and the deficit economic units and inconsequence a separation of the savings investment mechanism. This has necessitated the existence of financial institution whose jobs include the transfer of funds from savers to investors. one of such institution is the money deposits banks, the intermediating roles of the money-deposit banks places them in a position of “trustees´´ of the saving of the widely dispersed surplus economic units as well as the determinant of the rate and shape of the economic development.

The techniques employed by bankers in this intermediary function should provide them with perfect knowledge of the outcomes of lending such that funds will be allocated to investments in which the probability of full payment is certain. However, in practice no such tool can be found in the decision of the lending banker. Virtually all lending decisions are made under creditors on uncertainty. The risk and uncertainty associated with lending decision, situation is so great that the concepts of risk and risk analysis need to be employed by lending bankers in order to facilitate sound decision-making and judgement.

This statement implies that if risks are to be objectively assessed, lending decisions by the money deposit banks should be based less on quantitative data and more on principles too subjective to provide sound and unbiased judgement. Furthermore, the banks depend heavily on historical information as a basis for decision making. Apparently aware of the inadequacies of his decisions base, the lending banker has often sought solace in tangible and marketable assets as security giving the impression that lending against such securities is an insurance against bad debts. This makes the banker complacent with his loan portfolio. 



Egginton, O.A. (1982). Accounting for the Lending Banker: London. Longman
Group Ltd.

Fumes, E.L. (1975) . Money and Banking in Developing Countries: London.

Holden, D.M. (1978). The law and Practice of Banking: London. Pitman Publishers.

Hundeyin, A.W. (1985).Debt Management in Money-Deposit Banks in Nigeria,
Lagos. First Bank of Nigeria Ltd.

Hutchinson, H.U. (1981). Interpretation of Balance Sheets: London. Institute of

Mandel, E.(1979). Marxist Economics Theory: London. Merline press.

Mather, I. (1979). Introduction of Financial Management: New York. Macmillan.

Mather, L.C. (1979). The Lending Banker: London. Waterloo and Sons.

Nwankwo,W.(1980).The Nigerian Financial System: London. Macmillan

StudentsandScholarship Team.

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *