ABSTRACT

This research work critically examines credit management, its techniques and risks in Nigeria mortgage banks with Mayfresh Mortgage Bank LTD, Aba Branch as my précised reference point. The objectives of this study includes to x-ray the ways Mayfresh mortgage bank manage credit risk; the credit management techniques adopted by Mayfresh and the volume of loans and advances granted by the bank to its customers; the influence of credit management techniques employed, on the level of banking performance of Mayfresh Mortgage Banks; if Mayfresh mortgage bank strictly adhere to the use of appropriate credit management techniques; and the difficulties associated with the credit management techniques employed by Mayfresh Mortgage Bank Limited, Aba. In this study, literatures were empirically reviewed, primary and secondary data collated from a sample size of 56 staff (although only 51 staff responded). A total of five (5) hypotheses were formulated to guide the study and the data collated were critically tested and analyzed using “Correlation Model”, this was efficiently achieved with the aid of “SPSS Statistics 20 Software”. The result obtained unveils that Mayfresh mortgage bank is not aged biased, rather work experience is regarded best; they adopt appraisal techniques, they do not monitor or regulate the usage of the loan facility granted to their customers. Credit management techniques have positive and significant influence on the bank, they also establish credit limit, use credit insurance and ensure that the agreement terms are clear to and quite understood by the customers. It was also uncovered that the bank faces the problem of enacting effective and efficient credit management due to lack of objectivity, insider abuse, and bureaucracy. Having successfully concluded this research work, based on the findings the study recommended that if Mayfresh Mortgage Bank Aba, can strictly adhere to some credit management and limiting policies, most of the problems attached to credit management as they experience, would definitely be a thing of the past; the bank should give its credit management staff more orientation, oneself-discipline and adherence to professional ethics in order to make them more objective in the discharge of their credit management functions and duties thus, all activities linked with insider abuses should be discouraged. For effective management of credit given to customers, the bank is advised to imbibe the spirit of “after–sales–services”; they should always emphasize on collateral, the use of credit insurance policy and the litigation to minimize risks resulting from investing in vulnerable clients and maximize returns; bureaucracy in the organization should be reduced by decentralizing some functions and reduction of organizational levels; time to time orientation should be made available for credit management staff to avoid loses and align with the banks objectives with respect to credits; they should develop a standard process for handling overdue account of their debtors.