NWANNUNU, CHIDERA PROMISE (2021) IMPACT OF CREDIT BUREAUS, ACCOUNT HOLDINGS AND LOAN PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA FOR A PERIOD OF 10 YEARS (2009-2019). Masters thesis, Covenant University Ota..
![[img]](http://eprints.covenantuniversity.edu.ng/style/images/fileicons/application_pdf.png) |
PDF
Download (470kB) |
Abstract
Good Loan Performance and Profit making is an important objective of deposit money banks in Nigeria. Much emphasis has been laid on the importance of credit management and good loan performance in the present-day financial sector. Credit bureaus not only increase the chances of reducing Non-performing loan ratio of deposit money banks but also better equips management of banks with appropriate and sufficient information when lending. In light of this fact, the recent decline in the loan loss provisions and non-performing loan ratios in Nigeria constitutes a challenge to the source of growth. In this study, attempts were made to explain the impact credit bureaus have had on account holders with multiple accounts and how it has impacted the loan performance of deposit money banks. The central argument is that credit bureau improves loan performance of deposit money banks and therefore, reduces the non-performing ratio. This argument derives from the Credit Scoring Systems theory which states that all customers and their past credit history should be rated and ranked. It states that financial institutions should rank their customer based on credit rating through credit bureaus. Hence, greater investments in credit bureaus and legally assessing the credit information of a customer would lead to better decisions. Based on this expectation, the study specifically sought to uncover the effects of loan loss provisions and non-performing loan ratios over the years on loans and advances and to determine the nature of causality existing between loan performance indicators and deposit money banks. The study employed data from financial statements and the central bank of Nigeria bulletin from 2009 to 2020 using Haussmann tests. The methodology employed in this study was panel data, the study showed that the variables influenced by credit bureaus (Non-performing loan ratio and loan loss provisions) have a statistically significant influence on loan performance both in the short-run and in the long run. Monetary policy rates were found to have a significant negative effect on loan and advances in the short-run as well as in the long-run. The findings also established the propositions of the cost plus loan pricing model since a higher credit reserve ratio was found to lead to lower loan loss provisions as deposit money banks were more careful with their funds. Profit after tax was found to have lead to an increase in loans and advances. The study recommends improvement on existing credit bureaus information by increasing the range of information to collateral, links to defunct companies and related parties. Efforts should also be made to improve the quality of information on particular customers for there to be full disclosure to make paramount decisions. Finally, efforts should be made by credit bureaus, asset management corporation of Nigeria and the central bank of Nigeria to be able to integrate a portal in which banks can view records of collaterals that has been utilized by borrowers in the past
| Item Type: | Thesis (Masters) |
|---|---|
| Subjects: | H Social Sciences > HF Commerce H Social Sciences > HG Finance |
| Divisions: | Faculty of Law, Arts and Social Sciences > School of Management Faculty of Law, Arts and Social Sciences > School of Social Sciences |
| Depositing User: | Mrs Patricia Nwokealisi |
| Date Deposited: | 15 Oct 2021 13:47 |
| Last Modified: | 15 Oct 2021 13:47 |
| URI: | http://eprints.covenantuniversity.edu.ng/id/eprint/15378 |
Actions (login required)
 |
View Item |
