A PERISCOPIC VIEW OF CREDIT POLICY AND LOAN ADMINISTRATION: A CASE STUDY OF FIRST BANK PLC, OYO STATE IN NIGERIA

Abstract

This research work is on credit policy and loan administration in banks. The two branches of First Bank Nigeria Plc in Oyo State were used as the case study. The objective of the study is to examine how credit policy and loan administration lead to sound lending decisions and also to determine their effectiveness in reducing lending risks. Data were collected majorly through the use of questionnaire. Survey design was used, hypothesis was tested for its validity and conclusion was drawn from the analysis made on data gathered from the research instrument to issue under study. The data obtained were analyzed using simple percentage method and the formulated hypothesis tested using chi-square method. Thus, it was discovered that credit policy reduces lending risks and such policy, in addition provides useful guide for loan administration. Findings also revealed that ineffective credit management will lead to bank distress. It was recommended that banks, in addition to credit guideline issued by the monetary authorities should have their own internal credit policy aimed at effective administration and control of credits as such as banks will be able to manage credits effectively and continue to be in business.