Loan Syndication A Source of Business Financing in Nigeria

Loan Syndication: A Source of Business Financing in Nigeria

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Reference ID: PS-11855-TM

DEDICATION

This research material titled “Loan Syndication: A Source of Business Financing in Nigeria” is dedicated to God for his enabling grace, and to all computer enthusiasts who contributed to make life a pleasant experience during my research documentation.

ACKNOWLEDGEMENT

I extend my sincere gratitude to all those who contributed to the completion of this project. Special thanks to my Supervisor (Name of your Supervisor), the Head of Department (Name of your HOD), the Lecturers in the department of Banking and Finance (BF), Book Authors and Profound Scholars of existing or related project material on “Loan Syndication: A Source of Business Financing in Nigeria” for their invaluable guidance, support, and expertise throughout the journey.

I am also grateful to your study area (mention any funding organizations, if applicable) for their financial assistance. This research would not have been possible without the encouragement and assistance of some stakeholders (mention any mentors, teachers, or colleagues). Additionally, I would like to acknowledge the understanding and patience of my family and friends during this endeavor. Your unwavering support has been a constant source of motivation. Thank you all for being part of this meaningful endeavor.

TABLE OF CONTENTS

PRELIMINARY PAGES

CHAPTER ONE

INTRODUCTION

    CHAPTER TWO

    LITERATURE REVIEW

    • 2.1 Introduction
    • 2.2 Conceptual Review
    • 2.3 Theoretical Framework
    • ⋮
    • 2.4 Empirical Studies

    CHAPTER THREE

    RESEARCH METHODOLOGY

    • 3.1 Introduction
    • 3.2 Research Design
    • 3.3 Population of Study
    • 3.4 Sampling and Sampling Technique
    • 3.5 Validation of Research Instrument
    • 3.6 Method of Data Collection
    • 3.7 Method of Data Analysis
    • 3.8 Questionnaire Administration
    • 3.9 Ethical Consideration
    • 3.10 Statistical Analysis

    CHAPTER FOUR

    DATA ANALYSIS, RESULT AND DISCUSSION

    • 4.1 Introduction
    • 4.2 Presentation and Analysis of Data
    • 4.3 Re-statement of Research Questions
    • 4.4 Test of Hypotheses
    • 4.5 Discussion of Findings

    CHAPTER FIVE

    SUMMARY, CONCLUSION AND RECOMMENDATION

    • 5.1 Introduction
    • 5.2 Summary of Findings
    • 5.3 Conclusion
    • 5.4 Recommendation
    • 5.5 Suggestion for Further Study

    REFERENCES

    APPENDIX A - “QUESTIONNAIRE”

    Loan Syndication: A Source of Business Financing in Nigeria

    CHAPTER ONE

    1.1 Introduction

    The relative insufficiency of funds for capital investment is a common factor in every economy especially in developing countries of the ward, like Nigeria.

    Finding a solution to these problems of providing funds for capital investment has been a major pre-occupation of financial institutions in Nigeria one of the solution that come up is syndicated loan, which h is aimed at spreading risks and weakening the impact of restricting laws and regulations lending by financial institutions.

    Loan syndication is basically defined as an agreement between two or more lending financial institution to provide a borrower with credit facility using common roan documentation.

    The spectacular growth of Loan syndication as source of financial instruments for business organization occurred as response to several economic factors in Nigeria.

    Notable among these were:

    1. Restrictions on credit expansion of government and monitoring authorities to minimize.
    2. The scraping of import licence requires which enables more users of imported equipment and machineries to source and warning some into the country.
    3. Deregulation of interest rates made Loan syndication attractive to both business organization and financial institutions.

    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 banking Act of 1969 section 13 (1), the liquidity requirements etc.

    In order to surmount these legal and regulation, limitations on lending activities of commercial and merchant banks. Loan syndication has become an attractive credit delivery technique aimed at spending risks and reducing the impact of the restricting laws and regulations.

    Currently, there exist a comprehensive enacted law on Loan syndication in the country as to regulate the activities of the financial, institution who lead and participate in the syndication.

    What is not the rapid growth of financial institution involved in Loan syndication but their activities, which have been quite remarkable over the years.

    1.2 Problems Identification

    There are conflicting views as to whether business organization shold be financed by syndicate loan or not. The opposition to theuse of alternative and involve much administrative work

    Also, there is need to point out in very clear terms the advantages inherent in syndicate loan as medium and long-term financing.

    1.3 Statement Of Objective

    The purpose of this study includes:

    1. To examine the general terms of the various issue involved in Loan syndication
    2. To find out whether Loan syndication is really a new approach to or another Loan syndication can help in industrial development of the country.
    3. To examine the extent of penetration of syndicated loan financing among business organization in the country.

    1.4 Limitation To The Study

    This work would have been more comprehensive and perfect if not for the constrains imposed on the researcher by the following factors.

    1. Death of statistical data:
    2. Lack of statistical data from our financial institutions like the central bank of Nigeria (CBN).
    3. Ministry and Economic Development posed as constraints to the researcher.
    4. Cost: The researcher would have extended the survey but for the enormous cost of transportation, it was impossible.

    1.5 Significance Of The Study

    Lender:

    The lender bank is appointed and it is called the agent bank it is an agent of the lender and its main duty is to monitor the syndicated growth loans. This has contributed to the economic growth of the nation.

    1.6 Scope Of The Study

    SCOPE: The scope of the study dealt with Loan syndication as a source of business financing in Nigeria and its important to the industrialists and economy in Nigeria.

    1.7 Definition Of Terms

    Loan:

    This is a credit facility granted to a customers which is install mentally repayable over a period of time.

    Syndication:

    This is an association of Industiralists or banking customer formed to carry out industrial project.

    Loan Syndication:

    This is basically defined as an agreement between two or more lending financial institution to provide a borrower with credit facility utilizing loan documentation. utilizing loan documentation.

    …

    CHAPTER TWO

    2.0 Literature Review

    2.1 Introduction

    This chapter focuses on the review of related literature. A literature review includes the current knowledge as well as theoretical and methodological contributions to a particular topic. It documents the state of the art with respect to the topic you are writing. It surveys the literature in the topic selected. In this research work the literature review includes the …

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