THE EFFECT OF BAD AND DOUBTFUL DEBT ON THE LIQUIDITY OF UNITY BANK PLC

ABSTRACT The major energizer of economic and development in Nigeria since independence is the financial industry. The government has been formulating various monetary and fiscal policies commercial banks under the strict supervision of the Central Bank of Nigeria. To be able to pursue these policies towards ensuring methodical, economic, industrial and socio-political development, the need enough fund to support lending to various individual and corporate customers, so when any of the loan facilities granted become bad or doubtful debts for commercial banks are not able to fulfill perfectly this responsibility and this has been the effect of mounting bad debt in book of commercial bank especially with the recent withdrawal of deposits by government department and parastatals. Deposits now are expensive, and the banks need money to back up their lending. This research study is on “effect of bad and doubtful in commercial bank”. The study was carried out through administration of questionnaire on both employees and customers of Unity bank. The aim was to find out the effect and control of bad and doubtful debt in commercial bank. And interview was also conducted the only cheapest source of loanable fund for commercial bank is the amount on their bad and doubtful account, this is shown by the findings effects towards recovering substantial portion of such debt becomes imperative and compelling on the bank. It also shows the slip shot manner with each loan facilities granted, and treated by bank employees and customers alike, additional control of new debts have been identified and recommended for adoption by banks.   TABLE OF CONTENTS Title page-- -i Declaration-- -ii Certification- --iii Dedication-- -iv Acknowledgement -v Abstract-- -vi Table of Contents- -vii
CHAPTER ONE 1.0Introduction -1 1.1Historical background of unity bank- 6 1.2Statement of problem-- 9 1.3Aims and objectives of the study- -10 1.4Hypothesis- -11 1.5Significance of the study------11 1.6Scope of the study-------12 1.7Definition of terms-------13
CHAPTER TWO 2.0Literature Review 2.1Introduction -15 2.1.1Concept of Bad and Doubtful Debts- 16 2.1.2Lending In Commercial Banks- -26 2.2Causes of Bad Debts- 37
CHAPTER THREE 3.0Research Methodology 3.1Introduction- 40 3.2Sources and Methods of Data Collection---41 3.3Method of data analysis -46 3.4Data analysis techniques- --48
CHAPTER FOUR 4.0Data Presentation, Analysis and Finding 4.1Sample Size --50 4.2Data presentation- -50 4.2.1Analysis of bank employees responses---51 4.2.2Analysis of bank customer (respondents)--64 4.3Findings-- -71
CHAPTER FIVE 5.0Summary, Conclusion and Recommendation 5.1Summary- 76 5.2Conclusion - --8 5.3Recommendations- --79 Bibliography-- -82  Appendix I --- -84  Appendix II -- -90