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1 CHAPTER ONE 1.1 INTRODUCTION Loan service for small organizations and individuals was initiated after a number of considerations on the banking system. Major Banks are mainly guided by financial profit for their shareholders. They are after the minimization of financial risks. Such strategies don’t leave much room for people on low income or even small organizations that strive for their survival. This research studied the loan disbursement control system used in Bank PHB Enugu. Loans are readily given to people who have an account (mostly current account). In Bank PHB, apart from being a customer of the bank, conditions may include: provision of collateral security, providing at least one guarantor and filling the bank loan management form. The collateral security must be a landed property before the bank can accept it. Also, the guarantor must have an account in that bank and must be a reputable person in the society. The role of computers in loan management can never be over emphasized. The computerized loan disbursement control system enables the bank staff to work without stress. Information can be updated as soon as positive change occurs, the interest charged on the loan as well as the updating of information as soon as they are received. I therefore recommend this project to all who may like to have a loan in a bank, because that is what the topic is all about. The research 2 work will enable them know the importance of computerization in loan management which yield fruitful result as that of other fields of human endeavor. 1.2 BACKGROUND OF THE STUDY Bank PHB was formed in 2005 by the merger between Platinum Bank Plc and Habib Nigeria Bank Plc. Since its inception, the bank has pursued a strategy of expansion by the acquisition and creation of subsidiaries within and outside its home country of Nigeria. Bank PHB is a full service financial services institution offering corporate financing, retail banking, consumer and project financing, loan syndication, correspondent banking, discount brokerage, securities trading and others. However, the bank’s primary focus is retail banking. Our focus shall be loan syndication. Below is an organizational chart of their Enugu branch which we shall be working with. 3 1.3 ORGANIZATIONAL CHART STRUCTURE Assistant General Manager Principal Manager Manager Legal Manager Internal Control Deputy Manager Cash Deputy Manager Property Support Staff Submanager system admin Senior manager /SPD Assistant Manager Mkt/proto col Deputy Manager Account Sub – manager Account Official account Support Staff Senior manager Admin Assistant Manager Admin Support staff Senior Manager SPAD Senior manager /SPD Assistant Manager SPD Support Staff Officer 1 PSD Support Staff Supp Staff Fig 1:Organogram 4 1.4 STATEMENT OF THE PROBLEM The events of loan management and control system have been documented. This research will evaluate the perceived motion of computerized loan disbursement control system. In doing so, attempts will be made to answer the following questions. How can a computerized loan disbursement control system be implemented? What steps are taken in the design of a computerized loan disbursement control system? What are the implications of not meeting the above requirements? How far have the computerized loan disbursement control system gone in achieving the desired goals? 1.5 OBJECTIVES OF THE STUDY This project will have the following aims and objectives. To suggest the ways in which a computerized loan disbursement control system can be enhanced To shed light on the issue of computerized loan disbursement control system. 1.6 SIGNIFICANCE OF THE STUDY This study is very critical because it will be of great relevance towards the improvements of the loan control services given to customers of the bank. This work is going to be of great benefit to Bank PHB Enugu by improving their loan disbursement control system as well as reducing the risks that are encountered when granting loans to customers. Other banks and financial institutions with their view of improving their loan management control system are not left out of these benefits. 5 Also, students of banking and finance will benefit from this study which will go a long way in broadening their knowledge in their discipline. 1.7 PURPOSE OF THE STUDY The purpose of this study is to dock the normal difficulties associated with the Bank PHB loan disbursement control system. As the loan management is done by man, irregularities are bound to be associated with it. If the loan management and control system are effectively carried out with the computer system, it will yield fruitful results. 1.8 SCOPE OF THE STUDY This research work will access the design and implementation of a computerized loan disbursement control system in Bank PHB Enugu. It will look into the operations of this bank in the aspect of loan management, the interest charged on loan as well as the updating of information as soon as they are received. 1.9 LIMITATIONS OF THE STUDY This project will be limited to the data available at hand; data outside the research area will not be made use of. The limitations militating against this research are financial constraints, time factor and other circumstances. 1.10 ASSUMPTION OF THE STUDY Accuracy, efficiency, and reliability are associated with computerized loan disbursement control system. For the purpose of this research, my assumptions can be stated as follows: The application of computers in loan disbursement control system had led most banks to business expansion and development projects. 6 Computerized loan disbursement control system loads to fast, accurate and concise deals. 1.11 DEFINITION OF TERMS / VARIABLES A LOAN: This is money lent to an individual or an organization on interest payable at a stipulated time. B MANAGEMENT: These are a group of persons controlling a business. C. LOAN MANAGEMENT: This is when the group of persons controlling a business creates and enforces policies on the disbursement of loans to an individual, a group or an organization. D. INTEREST: This is money paid on the use of money lent to an individual, or an organization. It is simply the amount charged on loan. E. LOAN SCHEME: A plan or management on steps to take while loaning money to an individual, a group or an organization. F. COLLATERAL SECURITY: This is a property e.g. stocks or bonds, pledged as security for repayment of a loan. G. GUARANTOR: One who supports a borrower by making sure that he/she pays back at/on the stipulated time/date. H. ACCOUNT: Statement of money paid received I. DISBURSEMENT: This is a process where the loan amount is paid into the borrowers account