ISSUES SURROUNDING GRANTING OF LOANS AND ITS RECOVERY ON MICROFINANCE BANKS IN NIGERIA
Abstract
This study examines the issues surrounding the granting of loans and their recovery in microfinance banks in Nigeria. Microfinance banks play a significant role in providing financial services to low-income earners, small businesses, and entrepreneurs who may not have access to conventional banking services. However, loan administration in microfinance institutions is often affected by problems such as loan default, inadequate collateral, poor credit assessment, and economic instability. Using a qualitative documentary review approach, this study explores the challenges associated with loan disbursement and recovery processes in Nigerian microfinance banks. Findings reveal that poor repayment culture, weak monitoring systems, insufficient customer evaluation, and economic hardship contribute significantly to loan recovery problems. The study concludes that effective credit management and proper monitoring are essential for improving loan recovery and ensuring the sustainability of microfinance banks in Nigeria.
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