AN ANALYSIS OF CREDIT DELINQUENCY IN COMMERCIAL BANKING (A CASE STUDY OF UNION PLC ENUGU)
ABSTRACT
As a result of inherent problem of Nigeria commercial Banks, the researcher aim to study “credit delinquency” with a target of improving the financial sector of Nigeria.In this study, credit delinquency sums up to refers to all those polices, acts practices that are incidental to the smooth running or practice of banking business that has to do with loan analysis and management.For the purpose of this research, data was collected from primary and secondary sources such as published annual reports and account. (Secondary Sources)  personal interview (Primary sources). Structure questionnaire. The respondents were analyzed with the use of ratios tables percentage etc.
The research revealed that the major problems of financial sector are bad management line efficiency and the adverse economic condition of the country based on the above findings the researcher recommend training loans and advances officers, strict adherence to principles of good lending proper credit analysis should be adhered to both banker and supervisors.
LIST OF TABLES
A         comparative analysis of balance sheet extract
B         Responses to research Question                         No1
C         Responses to research Question                         No2
D         Responses to research Question                         No3
E         Responses to research Question                         No4
F          Responses to research Question                         No5
G         Responses to research Question                         No6
H         Responses to research Question                         No7
I           Responses to research Question                         No8
LIST OF FIGURES
LIST OF FIGURES
4.1         Normal curve – Decision of Hypothesis  i
4.2       Normal curve – Decision on Hypothesis ii
 TABLE OF CONTENT
CHAPTER ONE
1.0         Introduction                                                              
1.1       Statement of problem                                                         
1.2         purpose of the study                                  
1.3         Significance of the study                          
1.4         Statements of Hypothesis                         
1.5         Scope of the study                                      
1.6         Limitations of the study                              
1.7         Definition of terms                                      
CHAPTER TWO
2.0         Review of Related Literature                                
2.1       Credit of commercial bank loans             
2.2         Types of commercial banks loans                       
2.3         Classification according to period of maturity
2.4         The lending guidelines                             
2.5         Commercial banks lending guideline                 
2.6         Cause of bank failure                                                        
2.7         Bank customers                                                      
2.8         Credit delinquency in commercial bank
CHAPTER THREE
3.0         RESEARCH DESIGN AND METHODOLOGY
3.1 sources of Data                                                
-                      Primary data                                                       
-                      Secondary data                                     
3.2         Sample used                                                           
3.3         Method of investigation                 
CHAPTER FOUR
4.0       DATA PRESENTATION AND ANALYSIS
CHAPTER FIVE
4.0         SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1         Findings                                                                   
5.2         Conclusion                                                  
5.3         Recommendation                                                   
BIBLIOGRAPHY                             
APPENDIX                                                  
QUESTIONNAIRE
CHAPTER ONE
1.0         INTRODUCTION
Every financial institution be it bank or non bank institution aim at profit and wealth maximization, to achieve this objective, appropriate care should be exercise on their operations mainly on granting of loan and overdraft to the public through which bank fund the economy such as production general commerce services. The major role of bank in economic development is transferring savings in generating investment. The saving surplus units than earn income inform of interest while the saving deficit units earn profit from investment according to Orjih John investment Analysis (2003). Lend has become a vital function in banking operation because of its direct effect on economic growth and business development loan therefore constitute the major and crucial part of commercial bank assets and the interest of the loan avoid credit risk. Credit risk is the risk that the principal or the interest or the part whereby the credit extended to a customers will not repaid by him in accordance with the loan agreement. When this happens, the bank will end up classifying the credit, as bad debt and in due course it will be written off. According to Utomi, Pat of Lagos business school said that, bad debt is referred as debt due to creditor but which for some inherent weakness the full or partial recovery is considered not possible.
All business incurred bad debts but, bank whose stock in trade is money view them with dread, hence it could be regarded as occupational hazards in business and for that banks must kept reasonable margin of the total lending port folio of the bank. Hence a senior banker once told a young enthusiastic banker that the only way to avoid bad debts was to refuse to lend money out at all, by Utom.
 Lemo said, the avoidance of lending by bankers is not possible because the greatest source of banker’s profitability is through lending. Thus, judgment of individual borrowers can be determine by three factor namely character, capacity and capital, the classic three C’5 of credit and this will be followed with condition and collateral making all 5c,s of credit from the study, the researcher discover that commercial bank do not make amount of loan and advances granted and their customers (Borrowers). This being the case, there is need for provision for bad debt so as to reduce the growth rate of bad debt which could be attributed to poor feasibility study reports, credit management, inefficiency, political instability etc. so as to be enable the banks continue to effectively meet their obligation of profitability liquidity, solvency and provision of credit for the economic development of Nigeria. Said by Emerhor Otega chairman of First Atlantic Bank Plc. Credit delinquency refers to those activities that limit the development and growth of financial institution regarding to their business operation such as
i           Bad management
ii          inadequate capital base
iii         Assets /liability management
iv         Credit Administration
V         Board Room Crisis
1.1       STATEMENT OF PROBLEM
The huge amount of provision for bad and doubtful debt in Nigeria commercial banks financial report and rate of bank distress and liquidation as below connotes that there is credit delinquencies in the banking industries.
Then, introduction of credit bureau by the CBN was calculated to save as Panacea to credit defaults, but the use of multiple registration of business has allowed borrowers to siding from one company to another.
According to Tilije is Md, fortune Bank Plc (2003) Page is financial standard. The credit management in Nigeria commercial banks in an inherent problem in the banking industry and will continue to linger on as long transaction because of it dynamic nature.
 The aims of this project is as follows: -
ø    To ascertain the causes of credit delinquencies in our commercial bank and its incidences on the economy
ø    To identify measures that can be adopted in solving the problems of credit delinquency.
1.2       PURPOSE OF THE STUDY
a.            To ascertain the causes of credit delinquencies in our commercial banks and its incidences on the economy.
b.            To ascertain the extent of increasing credit delinquency and regulatory deregulatory measures of federal Government.
c.            To assess and give recommendations that will aid in solving the problem of credit delinquency.
d.            To assess the extent of compliance with annual credit policy guidelines in line with bank and other financial institution decrees and Nigeria deposit insurance corporation decree.
 1.3       SIGNIFICANCE OF THE STUDY
1.            The study will also be useful to policy makers especially CBN who will be ready to manage the credit portfolio of the bank.
2.            The study will help in partial fulfillment of requirement for the award of Higher National Diploma (HND) in Accountancy.
3.            proper evaluation of  credit delinquency will enable the government to understand the need of the bank and the public which will form a yards stick for government monetary and fiscal policies.
 4.            The result obtained from the study will be beneficial to the management, the shareholders financial institutions non- financial institutions, business entrepreneurs, students of Accountancy and those of other discipline. Also it will be of help for future researchers.
1.4         STATEMENT OF HYPOTHESIS
A hypothesis is a tentative statement, which is subject to further proof based on this, the researcher has generated the following tentative statements for purpose of this study. This study will test the following hypothesis and then use the result to arrive at the answers.
HYPOTHESIS
H1:      For the positive (+)
HO:     For the negative(-)
 1.         HO:     Bad management is not the major causes of
                        Bank failure.
H1:      Bad management is the major causes of bank failure.
2.         HO:     Inadequate capital base may not lead to credit
                        Delinquency in commercial bank.
H1:      Inadequate capital base may not lead to credit delinquency in commercial bank.
3.         HO:     The incidence of credit delinquency to the
                        Economy     is not high.
 HI:       The incidence of credit delinquency to the economy is high.
4.         HO:     Cannons of lending are not measures of
                        Preventing credit delinquency.
            H1: Cannons of lending are measures of
                        Preventing credit delinquency.
1.5         SCOPE OF THE STUDY
The study focus attention on the causes effects and remedies of credit delinquency in commercial banks in Nigeria.
1.7       DEFINITION OF TERMS
1.         CREDIT:       The  term credit is derived from Latin word “CREDERE” meaning to trust. In economy sense, it means to give or extends economic value to someone else on faith that the economic requirements will be returned in future.
2.            DELINQUENCY: This includes those activities that limit the activities and business operation of financial institution (Commercial banks). E.g Fraud, Loan defaults etc.
3.            BANKS: A bank is an institution that is duty incorporated and posses valid license to perform banking functions of accepting deposit for the purpose of lending and investment.
4.            LOAN:      The borrowing of a sum of money at an agreed rate of interest, usually for a specific period of time from the bank.
5.            BAD DEBT: This is money lent to a bank customer for which repayment is not possible in the foreseeable future.
6.            UBN: Union Bank of Nigeria Plc. This is the one of the top four commercial banks operating in Nigeria. It was establishment in1917 and it’s the second commercial bank.
7.            PLC:         This means public Limited company whose shares are subscribed by the general public.