LOAN SYNDICATION AS AN ALTERNATIVE BUSINESS FINANCING STRATEGY IN NIGERIA. (A CASE STUDY OF UNION BANK OF NIGERIA PLC. NEW MARKET ROAD ONITSHA).

  • Type: Project
  • Department: Banking and Finance
  • Project ID: BFN1299
  • Access Fee: ₦5,000 ($14)
  • Pages: 107 Pages
  • Format: Microsoft Word
  • Views: 915
  • Report This work

For more Info, call us on
+234 8130 686 500
or
+234 8093 423 853
1.1 INTRODOUCTION OF THE STUDY
The velalive insufficiency of fund for capital investment is a common factor in every economy especially in developing counties of the world. In developing counties like Nigeria; the low level of capital investment manifest in high unemployment rates; low productivity and corresponding low standard of living for greater majority of the population.
      Finding a solution to this problem of providing fund for capital investment has been a major  pre-occupation of financial institutions in Nigeria. Beyond the traditional term loan; share offers; bonds and on; business organizations and   financial institutions alike have sought out avenue to tackle the problem of insufficient fund for capital investment. One of the solutions they have come up with is syndicated load or multiple  credit facilities , which is aimed at spreading risks and weakening the impact of restricting laws and regulation on lending by financial institutions . 
Syndicate has been defined as an association of industrialist , or financial or banking consortium forced to carry out some industrial projects . 
Accordingly, loan syndication is basically defined as an agreement between two or borrower with credit facility utilizing common loan documentation.
The spectacular growth of loan syndication as an alternative financial instrument for business organization occurred as response to several economic factors in Nigeria. Notable among these were:
- The National industrial policy of 1989, which is aimed at achieving, accelerated pace of industrial growth in Nigeria economy.
- The Introduction of structural adjustment programmed in 1986, culminating in the establishment of foreign Exchange market (F E M) and depreciation of the aria, This made imported machinery and equipment very expensive and requiring hung capital outlays which most companies or financial institution can not comfortably afford.  
- Restriction on credit expansion by government and monetary authorities to minimize inflation. Central bank of Nigeria dose not included syndicated loan finance with in the credit checking, banks are there fore, able to syndicate loans with out interfering with the credit ceiling.
- The scrapping of import license regime which enabled more users of imported equipment and machineries to source and bring into the country. 
- Deregulation of interest rate made loan syndication attractive to both business organizations and financial institutions. The above factors concerned with the persistent domestic inflation and arising cost of domestic production have increased the magnitude of credits demand by vanoys users of fund particularly the industrial producers.
In addition, there are certain legal and regulatory limitations on lending activities of commercial and merchant banks such as the statutory lending limit as provided in the banking act of 1969s. 13 (1) , the liquidity requirement ,e t c . In order to surmount these legal and regulatory limitations on lending activities of commercial bank (union bank) and merchant banks, loan syndication has become an attractive credit delivery technique aimed at spreading risks reducing the impact of the restricting laws and regulations. 
Currently, there exists no comprehensive enacted law on loan syndication in the country as to regulate the activities of the financial institution that lead and participate in the syndication. What is perhaps significant about loan syndication in the country is not the rapid growth of the financial institutions involved loan syndication, but their activities which have been quite remarkable over the years. 
Also, the study of the extent to which union bank of Nigeria plc. Employ syndicated loan as an alternative financing means with particular reference to Anambra and Enugu states respective financing means with loan as an alternatively have been carried out in this study. The researcher carefully appraised all aspects of loan syndication as financing alternative in the country from the point of view of the borrower. It is also made clear in this work that consideration of numerous merits of syndicated loan financing as against its demerits. It is not to be used as a last resort but should be considered alongside with equivalent alternatives. All these notwithstanding the most important of this study (it empirical study) is to know the popularity of syndicated loan financing among business organization in the country and the extent to which they employ it as financing alternative, no such study has been carried out in Nigeria.  
For the empirical study, Anambra and Enugu State respectively have been chosen due to constraint imposed by cost and short-term on the researcher, otherwise the researcher could have conducted the survey throughout the country.

TABLE OF CONTENT 

Title page 
Approval page
Dedication 
Acknowledgement 
Abstract 

CHAPTER ONE 
INTRODUCTION 
1.1 Background of the study
1.2 Statement of the problem
1.3 Objectives of the study
1.4 Significance of the study 
1.5 Scope, limitations and delimitations
1.6 Statement of hypothesis 
1.7 Definition of terms.

CHAPTER TWO 
REVIEW OF RELATED LITERATURE 
2.1 Types and sources of loan to Union Bank of Nigeria Plc. 
2.2 Factors to be considered by Consortium of Financial Institutions before giving out Loans to business Organization.
2.3 Factors to be considered by Union Bank of Nigeria before using Loan syndication as a source of finance.
2.4 Securities and interest rates acceptable to the Union Bank of Nigeria. 

CHAPTER THREE 
RESEARCH DESIGN AND METHODOLOGY 
3.1 Sources of data 
3.2 Survey Instrument or Instrument of Data collection. 
3.3 Location of data
3.4 Research questions. 

CHAPTER FOUR 
DATA PRESENTATION AND ANALYSIS 
4.1 Presentation of Data 
4.2 Analysis of data 
4.3 Interpretation of Data.

CHAPTER FIVE
FINDINGS, CONCLUSION AND RECOMMENDATION
5.1 Findings 
5.2 Recommendation 
5.3 Conclusion 
Bibliography 
Appendix 
LOAN SYNDICATION AS AN ALTERNATIVE BUSINESS FINANCING STRATEGY IN NIGERIA. (A CASE STUDY OF UNION BANK OF NIGERIA PLC. NEW MARKET ROAD ONITSHA).
For more Info, call us on
+234 8130 686 500
or
+234 8093 423 853

Share This
  • Type: Project
  • Department: Banking and Finance
  • Project ID: BFN1299
  • Access Fee: ₦5,000 ($14)
  • Pages: 107 Pages
  • Format: Microsoft Word
  • Views: 915

500
Leave a comment...

    Related Works

    LOAN SYNDICATION AS AN ALTERNATIVE BUSINESS FINANCING STRATEGY IN NIGERIA. (A CASE STUDY OF UNION BANK OF NIGERIA PLC. NEW MARKET ROAD ONITSHA). PROPOSAL Lack of fund has been one of the major problems militating against the progress and growth of our business organization. This is caused by a lot of factors such as low savings (vicious circle of... Continue Reading
    1.1 INTRODOUCTION OF THE STUDY The velalive insufficiency of fund for capital investment is a common factor in every economy especially in developing counties of the world. In developing counties like Nigeria; the low level of capital investment manifest in high unemployment rates; low productivity and corresponding low standard of living for... Continue Reading
    1.1 INTRODOUCTION OF THE STUDY The velalive insufficiency of fund for capital investment is a common factor in every economy especially in developing counties of the world. In developing counties like Nigeria; the low level of capital investment manifest in high unemployment rates; low productivity and corresponding low standard of living for... Continue Reading
    INTRODOUCTION     The velalive insufficiency of fund for capital investment is a common factor in every economy especially in developing counties of the world. In developing counties like Nigeria; the low level of capital investment manifest in high unemployment rates; low productivity and corresponding low standard of living for greater... Continue Reading
    INTRODOUCTION The velalive insufficiency of fund for capital investment is a common factor in every economy especially in developing counties of the world. In developing counties like Nigeria; the low level of capital investment manifest in high unemployment rates; low productivity and corresponding low standard of living for greater majority of... Continue Reading
    TABLE OF CONTENT  Title page  Approval page Dedication  Acknowledgement  Abstract  CHAPTER ONE  INTRODUCTION  1.1 Background of the study 1.2 Statement of the problem 1.3 Objectives of the study 1.4 Significance of the study  1.5 Scope, limitations and delimitations... Continue Reading
    ABSTRACT  Lack of fund has been one of the major problems militating against the progress and growth of our business organizations.  This is caused by a lot of factors such as low savings (Vicacious Circle of Poverty), Ignorance of the Public to invest, mismanagement etc.  There are many ways of solving the problems of Finance and Providing... Continue Reading
    ABSTRACT Lack of fund has been one of the major problems militating against the progress and growth of our business organizations. This is caused by a lot of factors such as low savings (Vicacious Circle of Poverty), Ignorance of the Public to invest, mismanagement etc. There are many ways of solving the problems of Finance and Providing adequate... Continue Reading
    ABSTRACT This research was undertaken to evaluate the extent of application of management by objective programme in the operations of financial institutions in Nigerian – A case study of union Bank of Nigeria Plc. New market road Onitsha. Motivated by the low productivity and poor job attitudes of staff of the study area caused by the job... Continue Reading
    ABSTRACT This research was undertaken to evaluate the extent of application of management by objective programme in the operations of financial institutions in Nigerian – A case study of union Bank of Nigeria Plc. New market road Onitsha. Motivated by the low productivity and poor job attitudes of staff of the study area caused by the job... Continue Reading
    Call Us Get this work