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Abstract
This paper examines credit management and issues of bad debt in deposit money banks in Nigeria, using Access Bank Plc, Bida branch as the case study. It presents a framework to x-ray the risk and to validate the checks and balances to prevent or rather reduce the risk. The study uses both primary and secondary tools for data collection to determine the causes of bad debts and the management of credit. Chi-square model and simple percentage were applied to validate the result spanning the period 2013 to 2018. Lending is one of the major functions of banks though the riskiest. Yet any bank that wants to remain in business must lend. Due to the fact that a bank’s primary function is to act as an intermediary between savers and borrowers, the barometer for measuring their earnings is interest from lending. Lending is a risk. Granting of credit is a risk that can be viewed as the most important risk which Nigerian banks face bearing in mind the staggering size of their non-performing assets. Credit risk, therefore, is the risk that could occasion a loss for a bank due to a default by a customer in meeting its obligation. It is observed that an incessant increase in interest rate is a strong and statistically important factor that causes bad debt in Nigeria commercial banks. Banks Management should establish sound lending policies, adequate credit administration procedure and effective and efficient machinery to monitor lending function with established guidelines, reduce interest rates on lending. They should study the character and financial statement of the borrower before granting them loans.
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