THE PROBLEMS OF DEBT MANAGEMENT IN FINANCIAL INSTITUTION

Thesis Overview

INTRODUCTION1.1  BACKGROUND OF THE STUDY       Financial institution is that sector of the economy that providing the community with money balance and payment up of the banks and sector of the economy is made up of banks and non-banks financial institutions like financial house, mortgage house and other institutions that provide financial services and inter-mediation to the various segment of the economy.       In modern society, economic prosperity and progress depend largely on level of savings in a Nation.  It happens that someone’s savings is made available to an investor for productive venture like what happens in Commercial Banks.  When this happens, a debt is created.  A debt has been described as an obligation to made future payment. It is against the borrower’s promise to make future payment. As a result of this, the owners of these funds face the risk of not getting their money in good time or losses it entirely when the custodian of these funds cannot manage them well hence debt management becomes a singvenon to guarantee the confidence of the individual depositor that his money is safe.Debt management involves arrangement put in place for repayment of these credit facilities       In the same way, it is also fulfill a wider role in safe guiding the stability of the individual bank and thus the banking system as a whole. At this juncture, the research mentioned that this work is based on the constraints in relation to Debt tagged on the problems of management in Nigeria Financial Institutions (A study of Union Bank of Nigeria Plc. Garden Avenue Enugu).       Recently, the Banking sector undergo a traumatic experience whereby some Banks were judged distressed; this, however was a direct manifestation of improper debt management.1.2  STATEMENT OF THE PROBLEMS1.    Failure to pay back loan granted by the creditors as and    when due.2.    Inability to function well by the bank due to inability of the       creditors to pay back.3.    Inadequate measures of working capital management in the     bank.1.3  OBJECTIVES OF THE STUDY1.  To find out if creditors do not pay back loans as and when due.2.  To expose the reasons behind banks failure to function well.3.  To discover how inadequate the measures of working capital management is.1.4  RESEARCH QUESTION1.   How can the debtor be considered responsible for their debts management?2.  Will good analysis of trade debt management help to measure an effective working capital management in the financial institution?3.   How does debt  exposes banks to credit   risks?4.  How will bank managers know the capable borrowers in order not to expose the capital structure of the  banks to debt?5.  Can financial institutions apply some measures to recover their money from their borrowers?1.5     RESEARCH HYPOTHESISHYPOTHESIS ONEH1­:The debtors exposes banks to credit riskH0­:The debtors do not exposes banks to credit riskHYPOTHESIS TWOH1:The analysis of trade debt management help to measure an effective working capital management in the financial institutionH0:Th