Impact Of Accounting Information On Banks’ Lending Decision (A Study Of First Bank Plc)

ABSTRACT

Impact of accounting information on bank lending decision (A case study of first Bank plc, Urnudike). Accounting can be defined as the language of business. Accounting information provides an important platform for good decision making in business organization. This is best realized when the accounting information provided is properly understood by the decision market to avoid unwarranted interpretation during decision making process. Bank lending is simple term is the act of giving money out to individuals, investors, institutions and government for investment purposes. It also involves granting an overdraft facilities, issuing right deposits in excess of the cash reserved in the bank. Bank lending involves certain elements of risks that stem from these circumstances which results from nonpayment of obligation otherwise known as default when loans fall due. With increasing numbers of organization one must accept that there are more investors and users of accounting informative understanding the structure and meaning of accounting information will help individuals derive efficiently and interpret correctly and effectively to make decisions. The data for the research project work was gathered using primary data which were tabulated and statistically analyzed using percentages, product moment correlation coefficient and the F-ratio analytical technique. The study also revealed that accosting information has a significant effect on bank's lending decisions.