CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF STUDY

A bank is a deposit – taking institution which is licensed by the Central Bank(The Bank of Ghana)
to act as the repository for money deposited by persons, companies, and institutions and which
undertakes to repay such deposits either immediately on demand or subject to due notice
being given.
Banks lend out money deposited with them in the form of loans and overdraft and also used
their funds to purchase financial securities in order to operate at a profit.
A bank could also be described as any financial institution that accept deposits in the form of
current account, savings account, fixed deposit and granting of loans as well as the collection
and payment of cheques.
In effect, banking is the process of executing the functions outlined above and also performing
various services for their customers, including monetary transmission, investment advice and so
on.
It must be emphasised that not all financial institutions are banks. Other financial institutions
such us insurance companies and credit unions cannot be referred to as banks, because such
institutions do not perform banking services of receiving customers deposit and paying them on
demand.
Ghana has a well-developed banking system that was used extensively by previous
governments to finance attempts to develop the local economy. By the late 1980s, the banks
had suffered substantial losses from a number of bad loans in their portfolios. In addition, cedi
depreciation had raised the banks' external liabilities. In order to strengthen the banking sector,
the government in 1988 initiated comprehensive reforms. In particular, the amended banking
law of August 1989 required banks to maintain a minimum capital base equivalent to 6 percent
of net assets adjusted for risk and to establish uniform accounting and auditing standards. The
law also introduced limits on risk exposure to single borrowers and sectors. These measures
strengthened central bank supervision, improved the regulatory framework, and gradually
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improved resource mobilization and credit allocation. (Source: The Library of Congress Country
Studies and the CIA World Factbook)

Other efforts were made to ease the accumulated burden of bad loans on the banks in the late
1980s. In 1989 the Bank of Ghana issued temporary promissory notes to replace non-
performing loans and other government-guaranteed obligations to state-owned enterprises as
of the end of 1988 and on private-sector loans in 1989. The latter were then replaced by
interest-bearing bonds from the Bank of Ghana or were offset against debts to the bank.
Effectively, the government stepped in and repaid the loans. By late 1989, some ¢62 billion
worth of non-performing assets had been offset or replaced by central bank bonds totaling
about ¢47 billion.

In the early 1990s, the banking system included the central bank (the Bank of Ghana), three
large commercial banks (Ghana Commercial Bank, Barclays Bank of Ghana, and Standard
Chartered Bank of Ghana), and seven secondary banks. Three merchant banks specialized in
corporate finance, advisory services, and money and capital market activities: Merchant Bank,
Ecobank Ghana, and Continental Acceptances; the latter two were both established in 1990.

These and the commercial banks placed short-term deposits with two discount houses set up to
enhance the development of Ghana's domestic money market: Consolidated Discount House
and Securities Discount House, established in November 1987 and June 1991, respectively. At
the bottom of the tier were 100 rural banks, which accounted for only 5 percent of the banking
system's total assets.

By the end of 1990, banks were able to meet the new capital adequacy requirements. In
addition, the government announced the establishment of the First Finance Company in 1991
to help distressed but potentially viable companies to recapitalize. The company was
established as part of the financial sector adjustment program in response to requests for
easier access to credit for companies hit by ERP policies. The company was a joint venture
between the Bank of Ghana and the Social Security and National Insurance Trust.
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Despite offering some of the highest lending rates in West Africa, Ghana's banks enjoyed
increased business in the early 1990s because of high deposit rates. The Bank of Ghana raised
its rediscount rate in stages to around 35 percent by mid-1991, driving money market and
commercial bank interest rates well above the rate of inflation, thus making real interest rates
substantially positive. As inflation decelerated over the year, the rediscount rate was lowered in
stages to 20 percent, bringing lending rates down accordingly.

At the same time, more money moved into the banking system in 1991 than in 1990; time and
savings deposits grew by 45 percent to ¢94.6 billion and demand deposits rose to ¢118.7
billion. Loans also rose, with banks' claims on the private sector up by 24.1 percent, to ¢117.4
billion. Banks' claims on the central government continued to shrink in 1991, falling to a mere
¢860 million from ¢2.95 billion in 1990, a reflection of continued budget surpluses. Claims on
nonfinancial public enterprises rose by 12.6 percent to ¢27.1 billion.

Foreign bank accounts, which were frozen shortly after the PNDC came to power, have been
permitted since mid-1985, in a move to increase local supplies of foreign exchange. Foreign
currency accounts may be held in any of seven authorized banks, with interest exempt from
Ghanaian tax and with transfers abroad free from foreign exchange control restrictions. Foreign
exchange earnings from exports, however, are specifically excluded from these arrangements.

The Ghana Stock Exchange began operations in November 1990, with twelve companies
considered to be the best performers in the country. Although there were stringent minimum
investment criteria for registration on the exchange, the government hoped that share
ownership would encourage the formation of new companies and would increase savings and
investment. After only one month in operation, however, the exchange lost a major French
affiliate, which reduced the starting market capitalization to about US$92.5 million.

By the end of 1990, the aggregate effect of price and volume movements had resulted in a
further 10.8 percent decrease in market capitalization.

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Trading steadily increased, however, and by mid July 1992, 2.8 million shares were being traded
with a value of ¢233 million, up from 1.7 million shares with a value of ¢145 million in
November 1991. The market continued to be small, listing only thirteen companies, more than
half in retailing and brewing. In June 1993, Accra removed exchange control restrictions and
gave permission to non-resident Ghanaians and foreigners to invest on the exchange without
prior approval from the Bank of Ghana. In April 1994, the exchange received a considerable
boost after the government sold part of its holdings in Ashanti Goldfields Corporation. (Source:
The Library of Congress Country Studies and the CIA World Factbook)

Commercial banking can also refer to a bank or a division of a bank that mostly deals
with deposits and loans from corporations or large businesses, as opposed to normal individual
members of the public (retail banking). Commercial bank is the term used for a normal bank to
distinguish it from an investment bank or retail bank.
This is what people normally call a "bank". The term "commercial" was used to distinguish it
from an investment bank. Since the two types of banks no longer have to be separate
companies, some have used the term "commercial bank" to refer to banks that focus mainly on
companies. In some English-speaking countries outside North America, the term "trading bank"
was and is used to denote a commercial bank. During the great depression and after the stock
market crash of 1929, the U.S. Congress passed the Glass-Steagall Act 1933-35 (Khambata
1996) requiring that commercial banks engage only in banking activities (accepting deposits and
making loans, as well as other fee based services) whereas investment banks were limited to
capital markets activities. This separation is no longer mandatory.

Commercial banks are empowered to carryout the following functions:

 Provide current deposit and savings account to their customers in that locality.
 Maintaining a safe-deposit vault, where space may be rented by an individual to keep
his valuable papers, jewels, etc.
 Acting as trustee and business manager for passive investors, and especially as executor
and administrator of estates or as guardian of a minor heir.

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  Act as agent of financial and non-financial institutions.
 Acting as money-charge to buy and sell money of different nations.
 Selling its credit, that is giving its promise to pay at some other place, or at some other
time, in return for a payment that yields a profit.
 Selling bond and other investment to customers.
According to banking law 1989 PNDCL 225, it states that no person shall qualify to hold a
license unless the business maintains a minimum paid up capital as the Bank of Ghana may
prescribe. The bank of Ghana determines the maximum share capital of the bank. The
authorized capital share in 1970 was ¢1,000,000(GH¢100) while the minimum paid up share
capital was ¢250,000(GH¢25) of which 50% shall be made up of ¢1 per ordinary shares and 50%
in the form of preferred stocks.
Following broad consultation with the banking industry on proposals embodied in the Bank of
Ghana’s Consultation Paper on minimum capital requirements, the Bank of Ghana has set the
minimum capital requirement for obtaining a Class 1 banking license (universal banking) at GH
¢60 million.

Existing banks are required to attain a minimum capitalization of GH¢ 60 million by December
31st 2009.

Ghanaian-owned banks have been given a longer time period to meet the new minimum capital
requirement. Under the directive, banks with local majority share ownership will have to attain
a capitalization of at least GH¢ 25 million by the end of 2010 and GH¢60 million by 2012.

The researcher has therefore taken the trouble upon himself to undertake this study to
establish how effective loans are disbursed and recovered by the commercial banks.

1.2 STATEMENT OF THE PROBLEM

Recovery of loans by commercial banks is not encouraging enough to boost the banks to
improve and expand its credit scheme.

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Granting of loans has therefore become a problem whiles the banks officials continue to blame
loan defaulters for the management of loan collected, the beneficiaries also accuse the bank for
its high interest rate and very short period for repayment of loans collected.
(Source: The loan officer of Ghana Commercial bank.)

1.3 IMPORTANCE OF THE STUDY

The study has an important contribution to offer to the society more especially the general
customers. It will help customers to understand why and how to seek for bank loans to improve
their business activities. Thus it will serve as an information house for future researchers and
students who want to do further research in this area of study.
It will as well help to improve upon their disbursement policies on commercial banks
administration.

1.4 RESEARCH QUESTIONS

With regard to the information outlined in the background to the study and problem stated on
the disbursement and recovery of loans, the researcher found solutions to the following
questions;
Are customers to blame for poor loan repayment?
Should managers of the commercial banks be blame for bad/poor recovery of loans?

1.5 OBJECTIVES OF THE STUDY

The objectives of the study are;
 To find out rate of recovery on loans disbursement.
 To find out the problem that hampers the beneficiaries of loans to repay the amount as
and when they fall due.
 To identify the problems and potentials in the structure or system of operation for
effective disbursement of loans by the commercial bank.
 To offer suggestions and make recommendations that would be a possible guide for
effective management and operations of commercial banks.

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1.6 LIMITATIONS OF THE STUDY
Due to the constraints of the study, the researcher limited the studies to five (5) commercial
banks in Kumasi metropolis. Among some of the constraints which forced the researcher to
limit the study are as follows;

 Financial difficulties.
For a researcher to be able to come out with a very good research work, he needs a
strong financial backing. In our case the funds needed to undertake the research is very
limited, hence our inability to extend our research to cover a wider area.
 Time factor. For a researcher to be able to come out with a good research work he needs
adequate time. In our case, time is a very limited factor because we combine academic
work with the research which hinders our ability to come out with a very good research
work covering a wider area.
 Most commercial banks do not have time to attend to researchers. Staffs of banking
institutions have very busy schedule for these reason they do not have enough time to
attend to researchers. For these reason researchers do not obtain the necessary
information needed for their work.

CHAPTER TWO

LITERATURE REWIEW

2.1 THEORETICAL FRAMEWORK OF THE STUDY

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In 1891 George Neville, a representative of Elder Dempster & Co in Lagos, Nigeria, recognized
that banking facilities were urgently required in West Africa, especially in Lagos. Neville and a
colleague, Alfred Lewis Jones, believed that the best way forward was to get an existing bank to
establish a branch in Lagos. Neville approached the African Banking Corporation, established in
South Africa in 1891. Its board of directors in London agreed to extend their business
operations to Lagos but made it known that their main interest was in South Africa.
Shortly, thereafter a series of meetings were held between Elder Dempster and the African
Banking Corporation to discuss the takeover of the Lagos branch by Elder Dempster. The Bank
of British West Africa (BBWA) was registered as a limited liability company by the directors of
Elder Dempster and began trading on March 31 1894, initially in England and in Lagos. Of the
3,000 shares issued, Alfred Jones took up 1,753 and his partners, Alexander Sinclair and W.J.
Davy, took up 433 each. The rest went to the other appointed directors. In 1896, a new branch
of the Bank was opened in Accra and in the Gold Coast (now known as Ghana).
Early meetings were held with the Crown Agents and the Colonial Office for the monopoly of
the importation of silver coins. The coins were used in the Gold Coast for the purposes of
trading and for making salary payments to Colonial Government officials and troops stationed
in the Colony.

Discussions also centered around the return of defaced silver coins to the Royal Mint in London.
Shortly after the Bank was established in Accra it was able to acquire the business of
maintaining the Government accounts. In addition, it was able to introduce the use of cheques
in settlement of Government accounts which helped to advertise the usefulness of the bank to
the public.

By 1918, the operations of BBWA in the Gold Coast had been so successful that another
expatriate bank, the Colonial Bank decided to commence banking there. In 1925 the Colonial
Bank merged with the Anglo-Egyptian Bank, the National Bank of South Africa and Barclays
Bank under the leadership and name of Barclays Bank (Dominion Colonial and Overseas).
Barclays soon developed into a strong competitor of BBWA.
From the late 1920s until the early 1950s, banking services in the Gold Coast(Ghana)

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continued to be exclusively provided by these two expatriate banks. They functioned largely as
commercial banks, facilitating the trading of commercial firms and assisting in revenue
collection and the payment of salaries by the Colonial Government. It may be noted that the
BBWA functioned additionally as the bank of issue for the Colonial Government.
Branches were opened in many of the provincial capital towns and in the main trading centres
in the Gold Coast Colony, and, subsequently, in Ashanti and the Northern Territories of the Gold
Coast.
In 1953 the Bank of the Gold Coast was set up by the Government and Alfred Engleston,
formerly of the Bank of England. Eventually the Bank was split into two: the Bank of Ghana,
operating as a bank of issue, to be developed into a complete central bank; and the Ghana
Commercial Bank, to be developed into the largest commercial bank with a monopoly on the
accounts of public corporations.
On March 6, 1957 the Gold Coast attained independence from Great Britain and became known
as Ghana. In July, Alfred Engleston was appointed as the first Governor of the Bank of Ghana. As
expected, the Bank of Ghana took over the management of the currency and in July 1958
issued its first National Currency - the Cedi - to replace the old West African currency notes. The
Ghana Commercial Bank assumed the role and functions of Government bankers and began to
take over the finances of most Government departments and public corporations.

The Bank of Ghana quickly developed into a strong competitor of the expatriate banks by
opening branches in most of the towns and centers in which they had been operating as well as
moving into new areas such as the Ashanti and the Northern Regions.
The advent of the new Government, elected by popular vote in 1957, brought the
establishment of more banks. Banks incorporated by legislation between the period 1957 to
1965 include: the Ghana Investment Bank as an Investment Banking Institution; the Agricultural
Development Bank for the development of agriculture; the Merchant Bank for merchant
banking; and the Social Security Bank to encourage savings. In conformity with the economic
policy of the time all these institutions were incorporated as state-owned banks.

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The first national Government commenced its tenure with a large surplus on its Balance of
Payments Account and with a comparatively good infrastructure to enable it to succeed.
However, by 1963 it was becoming increasingly clear that the country was experiencing serious
economic difficulties due to its Socialist policies. In 1961, Exchange Control had been extended
to cover all payments to non-residents and to all places outside Ghana; to imports and exports
from or to all countries; and to the issue and transfer of almost all securities to or by non-
residents.
These economic difficulties led to a change in Government in 1966. However, the country
continued to face economic problems until 1983 when, in an attempt to reverse the situation,
the Government, with the assistance and guidance of the International Monetary Fund (IMF),
introduced the Economic Recovery Programme (ERP). This signaled the end of socialism in
Ghana and provided a useful tool for economic development by embracing the market
economy; privatisation; the liberalisation of trade and financial restrictions; and the divestiture
of Government interests in public corporations.
Import licensing was quickly abandoned and exemptions were granted in relation to many of
the restrictive clauses of the Exchange Control Act. Furthermore, an Investment Code was
enacted to make provision for the relaxation of many of the earlier restrictions in trade and
finance and to encourage private investments. These newly adopted concepts were
incorporated into legislation, particularly in regards to banking, non-banking financial
institutions and securities.
Thus, the Banking Law was enacted in 1989, enabling suitable locally incorporated bodies to file
applications for licences to operate as banking institutions. Subsequently, a number of
corporate entities were licensed to operate as banks, including Meridian (BIAO) Trust Bank, CAL
Merchant Bank, Allied and Metropolitan and ECOBANK.
Provision was made for the licensing of non-banking financial institutions under the Financial
Institutions (Non-Banking) Law 1993 (P.N.D.C.L. 328). This legislation made provision for the
licensing of non-banking financial institutions seeking to operate as, inter alia, discount
companies, finance houses, building societies, or leasing and hire-purchase companies. Such
institutions now include the Home Finance Corporation which provides finance for the

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acquisition of houses and the City Savings and Loans Limited which grants various forms of
financial assistance and accommodation to small scale business enterprises.
The enactment of the Stock Exchange (Ghana Stock Exchange) Listing Regulations 1990 and The
Securities Industry Law 1993 served to show how far Ghana had traveled away from the system
of the planned economy and state control. Since 1993, the Ghana Stock Exchange had been
facilitating the purchasing and selling of equity shares listed on the Stock Exchange. Both
residents and non-residents were allowed to trade freely in listed shares with exchange control
no longer required for purchasing. The legislation also makes provision for the licensing of
dealers.
Provision was made in the ERP for measures to be taken to ensure economic discipline and
financial control. Many of these provisions appeared in the various legislation enacted for the
business and management of banking institutions, non-banking financial institutions and the
Ghana Stock Exchange. Such provisions cover: the appointment of suitably qualified corporate
bodies and persons; stringent procedures to avoid mismanagement; heavy penalties with
regard to fraud and embezzlement and other criminal acts.

Wide powers have been granted to the Bank of Ghana, the Minister for Finance and Economic
Affairs, the Securities Regulatory Commission and the Head of Banking Supervision, appointed
under the Banking Law 1989, to ensure effective control and proper management and for the
early detection of irregularities.
The objective was to control monetary system and to assist the residents people obtain loans
for their small scale industries as will as the large industries. Like other banks in the country, the
banking Act 1996 (Act 182) has spelt out the type of securities and conditions needed before
loan and advances could be granted to customers.

These conditions were meant to ensure repayment of loans and prevent it misuse. The
regulations for granting loans covered the following area:

a. Guilt-edge securities like Government stock, Treasury bills and life policies could be
pledge for loans from bank.
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b. A potential borrower could be eligible for a loan if there is a reasonable credit balance in
his savings account.
c. Group lending may be considered, provided the members of the group shall in the case
of default be jointly and severally liable to the bank.
d. The potential borrower must in addition be able to produce two people in standing
within the locality to stand as guarantors for the loan.

A lot of researchers have addressed some of these issues in their research work.

Dotsey(1994:PAGE 34-39)In his work, “ The economic impact of Banking Community’’ talk
about the problems facing in the Banking community as economic, social and political
problems.

Under the economic problems he mentioned the absence of regular lending to the needy
customers. He said this is due to low savings by individuals.

He mentioned about inability of loan beneficiaries to settle their indebtedness to the

commercial banks. The commercial banks find it difficult to recover the loans, thus block the
chance of others.

Under the socio-economic problems, he made mention of banking staffs demanding “Kick
backs’’ before loans are granted to customers as well as ‘’whom you know basis “which has
made some customers to lose confidence in their banks. He stated that efforts are being
made to arrest the situation.

He concluded by saying among other things the that banks needed logistics support from
the general public

Also there should be collaborative efforts between the board of directors, shareholders and
immediate management of the banks.

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Afful (1996) ”Appraisal of the operation of Banking Institution in the also mentioned about
lack of proper collateral security by farmers as one of the problems facing the customers
and the management of the bank.

He said that individual borrowers are always required by the banks to offer collateral
security before loans was granted which borrowers found it difficult to provide.

Lawrence Nsiah Asante (JULY 2004) His research on “Credit Portfolio Management in the
commercial Banks’’ Case study in SSB Bank Limited in the Eastern Region. He lamented that
lack of management and poor internal control was the major cause of banking crisis. There
was the need for the banks to attach a great deal of importance to training exposure to the
right type of experience. Training was never ending activity, since the banks human
resources are the most important resource personnel should be well trained and motivated.

In addition managers must be trained in credit administration to reduce the problem of bad
debts which originate from non performing loans.

He suggested that banks should stop rolling over loans in the hope that they might get
better and poor non performing customers should be avoided.

The banks should offer both legal and economic incentives to the borrower. The legal
incentives simply will prohibit certain risky practices by a binding agreement.

The economic incentives go to the root of the problems, if borrowers’ are required to risk
more of their own funds, then they have to have an economic incentive which should be
prudent.

The economic incentives demand on borrowers own financial contribution to the equity of
the undertaking to be financed is essential.
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 Konadu (1996) in his studies the “Role of commercial Banks in the Economic Development
of Ghana” argued that the banks face problem with loan recovery from beneficiaries. He
said this was due to misappropriation and misapplication of funds.

Also climatic conditions and other factors such as pest, which destroy some crops, make
loan repayment very difficult. In times of these problems the banks reschedule the payment
period. More over, when the loans were not given out at the appropriate time, repayment
became a problem as crop failure may occur. He suggested among others that the bank
with the assistance of the project officer should ensure that loans are used solely for the
venture they have been allotted so that easy repayment is ensured when the time is due.

He again suggested group loans to co-operative societies and others should be encouraged
to do the same.

Dr. Paul Acquah(AUGUST 22-28, 2005) On page 8 of Business and Financial Times, on the
topic: How banks contribute to economic growth and integration in the West African Sub-
Region, stated that over times, the business of the bank has grown in complexity but has
fundamentally remained the same. Banks perform the basic role of financial intermediation
by channeling funds from savers to borrowers in the economy. The intermediation role of
the bank is fundamental to the function of any modern economy. Banks are able to pool
funds from large number of savers to make loans to other businesses which produce goods
and services, create employment; pay taxes to government, finance investments and
enhance economic growth in tune with current literature also drive poverty reduction.

2.2 LENDING PRODUCTS:

 MORTGAGE LOANS:

This is a loan secured be real property through the use of documents which evidences
the existence of the loan and encumbrance that realty through the granting of a
mortgage which secures the loan.

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 A mortgage loan where the interest loan can periodically be adjusted up or down is
Adjustable Rate Mortgage (ARM).

 GENERAL OVERDRAFT:

This occurs when withdrawals from bank accounts exceed the available balance. (In this
situation a person is said to be overdrawn).

 SALARY ACCOUNT LOAN:

This is a type of loan giving to salary workers. They use their salary as security for the
loan granted.

 PERSONAL LOAN:

A loan that establishes consumer credit that is granted for personal use; usually
unsecured and based on the borrower’s integrity and ability to pay.

2.3 TRANSFERS:

 MONEY GRAM:

It is a United States base financial services company, Headquartered in Minneapolis,

Minnesota. It has additional facilities in Brooklyn center and international offices in 190
countries. It provides money transfer services, money orders, and bill payment services
to consumers.

 MONEY SYSTEM:

It’s anything that is accepted as a standard of value and measure of wealth in a

particular region. The current trend, however, it is use for international trade and
investment to alter the policy and legislation of individual government.

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 Example the European Union’s creation of the Euro as a common currency.

Currently the banks provide the following services to its customers:

2.4 DEPOSIT PRODUCTS:

 CURRENT ACCOUNT:

It is a running account and remains continuously in operation. The current deposits can
be withdrawn without giving any notice before time. The bank has to honor the cheques
if these are within limits. Those people maintain liquid assets who are in need of a liquid
balance. Overdraft facility can be provided through the agreement with the bank. On
the current account usually interest is not paid. The bank acts as a custodian only. The
bank can not employ these funds and keep higher reserve ratios. The Current account is
opened by the traders, business companies, industries and public service bodies.
Current account holder keeps the working capital in his hand. He keeps his money liquid
and safe.

SAVINGS ACCOUNTS:
Those people who have money to save but can not invest profitably, because the
amount is too small. They can open Savings Account. The bank pays the interest on it.
The employees, firms and children usually open this account. An account holder can
withdraw a limited amount of money only twice a week. In case of a big amount he has
to give seven to fifteen days prior notice in writing to the bank. The bank lends the
maximum portion of savings deposits because it knows that small portion of this
amount is withdrawn.

 FIXED DEPOSITS:

Fixed deposits are loan arrangements where a specific amount of funds is placed on
deposit under the name of the account holder. The money placed on deposit earns a
fixed rate of interest, according to the terms and conditions that govern the account.
The actual amount of the fixed rate can be influenced by such factors at the type of
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 currency involved in the deposit, the duration set in place for the deposit, and the
location where the deposit is made.

 SALARY SAVINGS:
Salary savings is the amount of salary expense that a department saves when a position
is vacant or filled at a lower salary level than the budgeted level. For example, if the
salary for a position is $4,000 per month, then the department saves $4,000 per month
(plus some salary driven benefit costs) when the position is vacant.

CHAPTER THREE

METHODOLOGY

3.1 INTRODUCTION

This chapter deals with procedure through which the research were conducted, namely,
Research design, Population and sample instruments used, validity, reliability of instruments
and also the background of commercial bank.

3.2 RESEARCH DESIGN

This study has the purpose of looking at the effectiveness of bank credit facilities to customers.
The research designs that will be used are interview, questionnaires, and documentary. These

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instruments will help the researcher to familiarize him/herself with his/her respondents,
needed information relevant to his/her study and analyzed the data to answer the research
study.

3.3 POPULATION

Due to time and financial constraints, all the population in this study area could not be
interviewed. In view of this, data will be collected from officials of the banks, customers of the
bank which are made up of small scale entrepreneurs and some middle and low wage earners
which includes farmers, transport owners, teachers, and traders.

With documenting assistance from the bank, the responses would be contacted at their various
homes for the interviews. Hence, the interview is restricted to only people who have benefited
from the banks loan advances or overdraft and all forms of financial assistance.

3.4 SAMPLE AND SAMPLING PROCEDURES

The bank manager and the project manager will be interview using a purposive sampling in
selecting them. However, the customers of the bank will be selected using the random
sampling technique.

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