ABSTRACT
Poor credit management and its effect is a contemporary issue, affecting banks adversely. In fact it is the reason why many bank records losses and become bankrupt and distressed. The methodologies employed appropriate sample plan and size as well a data analysis done with regression model as well as simple percentage and chi-square. Base on the information from the respondents and the computations from the annual reports of the banks, it was discovered that poor loan loss provisioning has a negative significant effect on the return on equity (ROE) return on Assets (ROA) and on the loan performance of the commercial banks which as a result, affect the overall profitability and performance of the banks. It was also revealed that there is significant relationship between interest income and loan loss (bad debt). It was further revealed that there are significant canons of credit as practiced by the banks in arriving at their lending decisions. Also, the information collected from the banks show that the CBN's credit policies affect their appraisal methodologies. Finally, the researcher proffers solutions to the problems facing banks in credit management which were to adhere strictly to the principle of good lending. Banks should constantly monitor the customers they granted loan and ensure that repayments are made. Following CBN's prudential guidelines, banks are advised to appoint men of good integrity at the credit department as well as training them. Loan monitoring, evaluation of collateral and establishment of adequate internal control system is also recommended. Banks are advised to make provisions for loan losses (bud debts) to cushion the effect of bud debts and non- performing loans on the banks. By observing all these, it will reduce the incessant cases of bad debts and its effect as well as improve credit management and the performances of the commercial banks.