ABSTRACT
In summary of this, the objective of this study therefore are to look at the
operations of loan syndication in Nigeria. The study will also give
suggestions on how the problem of loan syndication can be solved to improve the
practice of loan syndication in Nigeria.
TABLE OF CONTENT
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 LIMITATION
OF THE
STUDY
CHAPTER TWO
REVIEW OF RELATED
LITERATURE
2.1 FEATURES
OF LOAN
SYNDICATION
2.2 PARTIES
OF LOAN
SYNDICATION
2.3 THE
BORROWER
2.4 THE
LEAD BANK
2.5 THE
PARTICIPATING BANKS
CHAPTER THREE
RESEARCH DESIGN AND
METHODOLOGY
3.1 SOURCES
OF
DATA
3.2 LOCATION
OF
DATA
3.3 METHOD
OF DATA
COLLECTION
CHAPTER FOUR
THE
FINDINGS
CHAPTER FIVE
RECOMMENDATION AND
CONCLUSION
PROPOSAL
Since money is the machine that carter ports the economic growth and
development in its economy, then this study has to examine the role of
financial institutions in the management of loan syndication. The study
delves into identifying the parties and procedure involved in a loan
syndication business and its important to the economy.
Loan syndication as we will observe, helps in spreading risk of lending between
different banks, it also helps in putting the management of lending on experts
hands, this study was also carried out in other ascertain to what extent banks
have contributed to the Nigeria economy through their provision of loan
syndication to firms or contractors.
The objectives of this study therefore are to took at the operations of loan
syndication in Nigeria. The study will also give suggestions on how the
problem of loan syndication can be solved to improve the practice of loan
syndication in Nigeria.
For an economy to develop, there must be the existence of viable investment
opportunities. That is why the project also examined both development
banks, agricultural banks commercial and merchant banking in the financing of
large scale enterprises through loan syndication in Nigeria economy. In
this study, a total of 5 (five) banks made up of commercial banks development
banks, agricultural banks and merchant banks, would be used as the sample of
banks that carry out loan syndication business. Also four companies that
benefited from loan syndication business.
Some of the finding is that financial institutions do not give priorities to a
particular sector of the company before giving syndication loans. Also
there is no effective government regulation that is governing loan syndication
operation in Nigeria. Customer’s view the terms of syndication loan
agreement so favourable compare to the magnitude of the service rendered.
As a result of the above findings, the following recommendation is made.
The customers should negotiate carefully the terms and condition of syndication
loan. The financial institution should also try to improve on
infrastructural facilities, improve on documentation and also reduce the
consortium lending charges.
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Financial institutions occupy a vital position and play a landable role in the
economy of the nation. Their major purposes are proper mobilization of
find as well as provision of capital for industrial development, which is aimed
at enhancing economic growth and development.
In the early year of banking operation in Nigeria, banks performed their
intermediary function by giving loan mainly on individual basis (i.e
separately) but as the country entered the threshold of development and more
investment opportunities opened up, industrialist started demanding large sums
of money which is provided by bank on medium or long term basis.
However, banking is a highly regulated industry the world over with restrictive
monetary and credit guideline in loan growth and reserve requirement, sectoraol
allocation to priority sector of the economy, and excess liquidity mop-up
through the assurance of stabiclation securities to the bank to mention a few
due to these restrictions, it is difficult for a bank to meet up with the huge
loan demanded of their customers. Also, it is well know that lending is
not risk free, and that bank prefer to spreas their risk with others in the
banking industry.
Against this background, banks come together forming what is know as
“Consortium” to advance finds is called loan syndication and is sometimes
called “Cosortun”. Lending it can also be define as the agreement between
two or more lending institution to provide a borrower with credit facility
utilizing common loan documentation.
Loan syndication is now being practiced in Nigeria starting formteh 1960’s when
a constrtuim of commercial banks and acceptance houses discounted trade bills for
marketing boards under the produced bill finance scheme. Formalized loan
syndication came into being during the oil boom of the 70s when there was need
for adequate capital of finance the industrialization programmes. During
this period, few merchant bank had been incorporated.
Loan syndication has assumed international dimension because of the need to
provide adequate capital to finance the fast growing world economy. An
international syndicated credit is manage and under written by one or more
finance. Institution normally from a location other than the domicile of
the borrower, lenders from different countries could provide the borrower with
access from their countries or to move its own currency from other contracts of
domicile.
1.2
STATEMENT OF THE PROBLEM
To investigate why Loan syndication is not properly managed given priority
attention by monetary authorities. Despite it’s strategic place in
financing viable projects, capable of injecting foreign currency, creating
employment, and facilitating grapid economic development.
To examine critically the place of financial institutions in the management of
Loan syndication in the economy.
Loan syndication is a child of circumstances arising from legal lending
restrictions, risk sharing and liquidity problems. The researcher would
like to know despite the constrains prevailing is it still a supplementary
option for business financing.
1.3
OBJECTIVES OF THE STUDY
For an economy to develop, there must be a supplemtary source of financing
viable investment projects beyond the limits of an individual financial
institution, it is on this basis that we would like to define the objectives.
The research study is to include the followings:
i. To
identify those fundamental problems confronting Loan syndication and suggest
how much problems can be solve.
ii. To
ascertain the effect of Loan syndication in the economic development.
iii. To
highlight the potential s of Loan syndication in the economy
iv. To
recommend that syndicated loan is not deferent from other loan. Rather it
is subject to conditionalities, attracts higher interest rate, subject to
default, and time lapses in packaging as a result of bureaucracy involved by
consortium banks.
1.4
SIGNIFICANCE OF THE STUDY:
This study is expected to provide useful information on Loan syndication to the
following. The students by the use of this project make researchers and
source information on the rule of financial institution in the management of
Loan syndication.
Financial institution via this project will learn how to keep to their Loan
syndication agreements, it will also encourage the financial institutions to
give financial accommodation through Loan syndication because it is more
beneficial to them financial institution will also learn how to reduce the time
frame in packaging a syndicated loan.
The borrower, with the aid of this projects will know the appropriate
procedures involved in obtaining loan through syndication. Since Loan
syndication contributes immensely to the development of our economy both the
government and the targeted audience will benefit from the project. The
government with the help of this project know more about the benefit of Loan
syndication in our economy.
Department | Banking and Finance |
Project ID Code | BFN0029 |
Chapters | 5 Chapters |
No of Pages | 36 pages |
Methodology | Descriptive |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2348039638328 |
Contact Us On | +2347026816414 |
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