1.1 BACKGROUD OF THE STUDY
The background of the study shows the impact of managerial risk on credit facilities on Zenith Bank.
1.2 STATEMENT OF THE PROBLEMS
The statement of the problems of this research work among others was as follows:
- The availability of collateral for loan facility.
- Low level of public awareness for the application, process and the terms of payment of the credit facilities.
iii. Difficulty in understanding the impacts of managerial risk on credit facilities to the customer.
- The availability of collateral for loan facility.
1.3 OBJECTIVES OF THE STUDY
The broad objective of this study is to analyze the impact of managerial risk on credit facilities in Zenith Bank.
1.4 RESEARCH QUESTIONS
The research questions of this study is to evaluate the impact of managerial risk on credit facilities on credit facilities on Zenith Bank, and also answers would be provided to the following questions.
- Is the first time implementation of credit facilities costly and expensive?
- What is the level of public awareness of stakeholders on these banking products?
iii. Does existing Nigerian laws has any influence on the smooth transition process to credit facilities?
1.5 SIGNIFICANCE OF THE STUDY:
This shows the relevance and significance of the managerial risk on credit facilities in Zenith Bank.
1.6 THE SCOPE OF THE STUDY
This study focuses on the challenges and evaluation on the impact of managerial risk of credit facilities evaluation in Zenith Bank.
1.7 DEFINITION OF TERMS
- a) Risk: This can be defined as the uncertainty of loss.
- b) Credit facilities: This is called the loan obtained from the bank for a purpose.
- c) Management: This can be defined as the organization and coordination of activities in order to achieve defined objectives.
- d) Bank: A bank is a place where we go to make our financial activities.
- e) Collateral: It represents the document presented to the bank in default of the loan facility.
- f) Money: This is anything generally accepted as a means of exchange for the payment of debts and services and it is backed by law.
In this literature review, it is the opinion of the researcher to examine and review various views of scholars and researchers of every related concept to this topic of discussion. This section was categorized into Conceptual, Theoretical and Empirical Framework.
2.2 CONCEPT OF MANAGERIAL RISK
Managerial risk is connected with ineffective, destructive or underperforming management, which hurts shareholders and the company or the fund being managed. This refers to the risk of the situation in which the company or shareholders would have been better off without the choices made by the management.
2.3 BRIEF HISTORY OF ZENITH BANK IN NIGERIA
Over the years, Zenith bank has through strategic deployment of its people information and communication technology (ICT) redefined customer service standards and created diverse service delivery channels. The bank was incorporated as Zenith International Bank Limited on 30 May 1990, a private limited liability company and was licensed to carry on the business of banking in June 1990. The name of the bank was changed to Zenith Bank Plc on 20 May 2004 to reflect its status as a public limited liability company. The bank’s shares were listed on the Nigeria stock exchange on 21st October 2004 following a highly successful initial public offering (IPO). Nigerian individuals and institutions numbering over 700,000 shareholders currently own the bank.
Over the years the Zenith brand has become popular with the use of information and communication technology (ICT) in banking and general innovation in the Nigeria banking industry. The groups main service delivery channels remain its local and foreign subsidiaries and its business offices (Branches and cash offices); which currently stand at over 315 while offering electronic banking services, such as internet banking, bills payment, and telephone banking services amongst others. These business offices are located in prime business and commercial cities in each state of the Nigeria and they are easily accessible to all the central bank of Nigeria’s clearing zones all over Nigeria.
Within the first decade of commencing operations, the bank made its mark in profitability and all other performance indices in Nigeria and has maintained this prime position to data.
Zenith Banks Service: offerings cover most aspects of banking needs of our customers that cut across the entire public and private market spectra with emphasis on the following major market segments and lines of business:
Corporate and investment banking
Commercial and consumer banking
Personal and private banking
Trade services and foreign exchange
Treasury and cash management services
Other non bank financial services mainly through subsidiaries
2.4 THE EFFECTS OF MANAGERIAL RISK ON CREDIT FACILITIES
This enumerates the effects of managerial risk on credit facilities in Zenith bank as follows;
- a) Will the customer comply with the terms and condition of the credit facilities?
- b) Will the credit facilities be readily available for use?
- c) Will the bank and the customer come to terms on the interest rate and the possible payable dates?
This section highlight the methodology adopted: it includes the types and sources of data, research design and population of the study, sampling technique, method of data collection and method of data analysis.
3.2 RESEARCH DESIGN
In order to achieve the aim of this research, a survey research design was employed to study the adoption of managerial risk in Nigeria and the implementation challenges in the banking industry. Research survey involves studying a group of items that are sample of a bigger population for the purpose of analyzing data collected.
3.3 POPULATION OF THE STUDY
The population for this study was made up of all the staff of Zenith bank in Kaduna.
3.4 SAMPLING AND SAMPLING TECHNIQUES
The sampling for this study was made up of the marketers of the bank.
3.5 METHOD OF DATA COLLECTION
The method used in collecting data for the purpose of this research is the use of questionnaires and interview. However, Journals, textbooks and other online materials were reviewed.
3.6 METHOD OF DATA ANALYSIS
In analyzing the data collected for the study, the simple percentage method of analyzing was adopted.
DATA PRESENTATION AND ANALYSIS
This chapter covers presentation and analysis of data obtained through questionnaires and interview and using them to provide answer to the research questions and for the purpose of the study.
4.2 INTERPRETATION OF ANALYSIS
This interpretation of analysis is derived from the questionnaire been answered by the respondents and the responds of the interviewer and presented in a tabular form for proper interpretation of each question.
SUMMARY, CONCLUSION AND RECOMMENDATIONS
This chapter summarizes the findings of this research work and likewise presents the conclusion and recommendations. It also covers the limitations of the studies and the suggested areas for further research.
5.2 SUMMARY OF FINDINGS
The study examined the adoption of managerial risk on credit facilities Zenith bank Nigeria; Implementation and Challenges among the Nigerian banks. The study reveals that Nigerians agree to adopt credit facilities but in a gradual manner, and it was found out that:
- First time Implementation of credit facilities is very expensive and costly;
ii.There is a low level of public awareness on the use of credit facilities by the customers; and
iii.Existing Nigerian laws have influence on the smooth transaction of credit loan.
iv.Most potential loan collectors have no collateral document.
- The religious beliefs hinder some people from accessing loan facilities.
The study inspected the on managerial risk on credit facilities implementation challenges in the Nigerian banking sector. It covers the conceptual framework and theoretical review on the subject.
Sequel to the above summary and conclusion, in other to reduce managerial risk on credit facilities, the following are suggested:
- Introduction of product awareness by banks to improve the level of patronage on credit facilities.
- Adequate resources should be put in place by the bank for credit facilities.
iii. Continual training of staff and bank personnel on the use of credit loan product.
- Reduction of high interest rate by commercial banks.
- There should be more incentives through the credit facilities in other to encourage customers.