The Effect of Bad Debt Management in Nigerian Banking Industry and Dissertation

The Effect of Bad Debt Management in Nigerian Banking Industry and Remedies - Dissertation Example2. writings Review102.1Nigerian Banking Industry and its Role in Economic Growth102.2deregulation of the Banking System122.3Credit Risk and its Management Strategies132.4Impact of Credit Risk17CHAPTER THREE193.Research Methodology193.1Justification of the Methodology193.2Research Methodologies203.2.1 Qualitative Methodology203.2.2 Quantitative Methodology213.3Data Collection213.3.1 uncomplicated Data223.3.2Secondary Data233.4Sampling233.5Reli king and Validity233.6 Ethical Considerations24References25CHAPTER ONE1.IntroductionThe history of Nigerian banking industry dates back to the course of instruction 1892 when the first bank was incorporated by the colonial British Empire (Okezie, Tella, and Akingunola, 2011). The business operation of the fundamental Bank of Nigeria (CBN) was initiated in the year 1959. The autonomy of CBN was lost to the Federal presidency during the period 1968 to 1999. It resulted in Nigeria organism surrounded by a loose m one and only(a)tary policy that was implemented by the Federal Government then. In the year 1999, the last of the military regime in Nigeria, gave back the banks legal autonomy in the field of exercising monetary policy and regulatory functions (Central Bank of Nigeria, n.d.). After the independence of Nigeria in 1960 savings bank the beginning of 1980s, the banking industry of the country was mainly dominated by the three banks namely First Bank, confederacy Bank, and United Bank for Africa. The banking welkin was deregulated by the Nigerian government in 1986 which resulted in easement of launch barriers for the new entrantsin the banking industry of Nigeria. As a result of this deregulation, many new banking firms made an entry into the Nigerian banking sector and the number of banks in the country rose to over 100 (Ekpenyong, and Acha, 2011). Many of these new banking firms were seedy managed and weakly capit alised. The regulatory supervision was also quite weak. This resulted in a series of bank failures and moody up to be banking crisis in the year 1990s. At the beginning of 1989, almost 20% of the loan portfolios were adjudged to be non-performing assets. Since the year 2002, the banking industry of Nigeria comprised of 24 commercial banks, 5 development finance institutions, 5 discount houses, 50 class A bureau de change, 598 class B bureau de change, 84 finance companies, 98 primary winding mortgage institutions, and 914 microfinance institutions (Iwukemjika, n.d.). One of the major concerns for the policy makers is the increasing level of cases of banks in being distress. Hence no-count debt forms an important aspect of the banking industry in Nigeria. 1.1 Background of the Study It is a fact that the banking system is considered to be the engine of growth in any economy. It is so because of its function of financial intermediation. With the help of this function the banks are able to increase their performance, facilitate capital formation, and ultimately help in promoting economic growth (Badun, 2009). However, the ability of the banks to foster economic development and growth depends on the stability, health, and soundness of the system. The shareholders fund constitutes only a piffling portion of the total liability of the banks. This fact undermines the need for a reliable, viable and strong banking system. Hence, not surprisingly, the banking sector is found to be one of the most regulated sectors in an economy. In a modern economy, one can find clear distinctions between deficit and surplus economics units and also in the serve of separation of the mechanism related to saving investment. This fact has led to the emergence of financial institutions whose primary tariff includes