This work was carried out to appraise credit management techniques in United Bank for Africa (UBA) Plc, Gboko. Primarily, the work sought to find out the credit management techniques adopted in United Bank For Africa (UBA) Plc. Gboko, to trace the loads and advance granted by United Bank for Africa (UBA) Plc, Gboko and to establish the relationship that exist between credit management techniques and the performance of the Bank, among others. A survey research method was used in the work and the data collected analysed using the descriptive and inferential statistics. From the analysis, it discovered that in United Bank for Africa (UBA) Plc, Gboko, the major credit management techniques used are the appraisal, approved limit and installment disbursement techniques. These techniques have positive influence on the performance of the bank. The conclusion is that even through the financial institution has high performance rating as a result of the use of sound credit mismanagement techniques, the bank still needs to improve upon its efficiency level by giving its credit management staff more orientations on self discipline and adherence to professional ethics and by reducing its organizational levels to reduce bureaucratic tendencies.

Lending is one of the main functions of the Banks. Banks extend credits to their customers in the form of loans, overdraft and advances. The sum of these credits forms the debt or credit portfolios of the financial institutions. Debts are presented as liabilities to the customers as they are under obligation to pay interest and principal upon maturity (Edwin, 2005).

One outstanding problem in lending is that some customers fail to pay the interest and principal as agreed in the loan contract. This constitutes a major risk element to Banks, shareholders and the financial system as a whole. Credit risk as noted by Ehbodaghe (1995) is the chance that those extended credit by an organization will not repay with the result that the moment, the risk with the largest loss incidence to Nigerian Banks. For example, at the end of 1990, total classified (bad and doubtful) loans and advances which could not be recovered by Banks stood at N11.9 billion. This represented 44.2% of the total Bank loans and 43.8% of total Banks shareholder’s funds Ehbodaghe (995).

Similarly, Adeyemi (2005) observed that as at June 2004, nonperforming assets (i.e bad debt) constituted 19.5% of total loans and advance granted by Banks in Nigeria. Situation as reported here hinders the performance pf many Banks in the country and cause distress in the system hence Banks require effective and efficient credit management strategies in order to cope with the environment. Personal observations over the years indicate that some Banks in the midst of this problems are still performing very well. This implies that such Banks have adopted more effective and efficient credit management techniques which give them competitive advantage over others. One of such banks is UBA. It therefore became necessary to appraise the credit management techniques of this bank in order to identify their strength factors and recommend same to the other banks for improved performance.

The focus of this work has been on an appraisal of credit management techniques in UBA Gboko. As noted above, the choice of this topic was informed by the observed high level performance and stability of the Bank.


One of the main functions of Banks is to grant loans and advances to customers (i.e borrowers). The loans and advance created are the prime sources of income to the Banks which enable the financial institutions to achieve their profitability and shareholders wealth maximization objectives.

However, as noted by Davidson (2005) a high proportion of the total loans and advances granted by Banks are not usually repaid as at when due. Some turn into bad debts which may not be recovered. The implications are:

(a)                     Higher write-off of bad debts by Banks with negative consequences for Banks profitability and shareholders wealth.

(b)                    High reduction in the quality of the Bank’s risk assets and;

(c)                     Gradual reduction in customers’ confidence in the Banks e.g as happened to Spring Bank Nigeria Plc and sky Bank Nigeria Plc among others.

It is instructive therefore that for improved performance, banks need more effective and efficient credit management techniques. Personal observations as noted earlier indicate that UBA has a higher performance rating as compared to what is obtainable in other Banks (such as mentioned above) which prompted this research in order to recommend the techniques of credit management used by the firm to the other Banks......

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