The purpose of this study is to evaluate the impact of Credit and Debt recovery Department in financial institution. It is also meant to assist the investment Company to identify some of its problems with a view to proffer a solution.

Chapter two of this project reviewed some of the literatures that have been written about credit, debt recovery and its impact on organization, particularly an investment as all their transaction involves cash and credit facilities.

In Chapter three, emphasis is placed on the various techniques adopted by the researcher for data collection as well as describing the population used in the research work. Both primary and secondary data collection methods, such as questionnaire and documentary evidence were applied for the purpose of extracting relevant information from staff of the company. Unlike the above chapter which concentrates on the techniques used for data collection.

Chapter four, however, is based on the presentation and analysis of the information collected, i.e. analyzing the various responses from the management staff and beneficiaries of such loan. The Chapter also went further to test the hypothesis with a view to confirming or rejecting the assertion made that credit and debt recovery department plays a vital role towards achieving the objectives of financial institutions.FINANCIAL INSTITUTIONS

And finally, in Chapter five, efforts have been made to summarize all that was said in the previous chapters. Conclusion, Suggestion, and Recommendation were also made to the Management so as to enable them improve operational capacity related to credit and debt recovery


Title page

Approval page




Table of contents

            CHAPTER ONE

1.0       Introduction

1.1            Historical Background of U.I.D.C  Plc

1.2            Statement of General Problem

1.3            Research Questions

1.4            Research Hypothesis

1.5            Objectives of the Study

1.6            Significance of the Study

1.7            Scope of the Study

1.8            Limitation of the Study

1.9            Definition of terms.




2.0     Introduction

2.1     Review of the related literature



3.0     Introduction

3.1     Instrument used

3.2     Research population and sample size

3.3     Sampling procedures

3.4     Validity and reliability

3.5     Statistical techniques used



4.0     Introduction

4.1     Presentation and analysis of data

4.2     Test of hypothesis



5.0     Introduction

5.1     Summary

5.2     Conclusion

5.3     Recommendation





A major function of the banking system is the transfer of funds from the surplus units to deficit units of the economy. This is achieved through deposit mobilization and onward lending to customers by ways of loans and advances.

Most investment companies in Nigeria today cannot equivocally declare that they have been untouched by problem of loans certainty; it is a way of life in these tumultuous times of investing that virtually all investors are faced with problem loans.FINANCIAL INSTITUTIONS

Whatever form of lending is adopted by investment company in any given situation depends on the purpose of the borrower and the circumstances of the transaction. The important thing to understand is that regardless of the form investment lending takes, a debt is inevitably created between the Investment Company and customers.

The investment company becomes the creditor and customer, the debtor. Review of loan facilities span served stages from the request stage to the repayment and when the facilities get bad.

In this research work, the aim is to outlines the prerequisite for loan, warning signals, management of problem loan as well as debt recovery strategies with the impact of the credit and debt recovery department towards recovering of such debt.FINANCIAL INSTITUTIONS

It appears that the review of a debt recovery structures should be related to review of analytical tools of credit facility towards its restructuring, preparing a workable game plan or pay out plan. In this project, the subsequent chapters will look at prevention of problem debts and various strategies for recovering credit facilities.


The Universal Investment and Development Company Plc is a Development, Finance / Management Consultancy institution.

The Company was incorporated by the then mid-western state government in 1971 under the name, Nigeria Economic Welfare Services (NEWS) Limited as a purely consultancy outfit. In 1987, the Company was re-organized into its present status as a Development Finance/ Management Consultancy institution, under the name Universal Investment & Development Company Plc. Its scope of activities was similarly enlarged to reflect its enhanced status.

In February 2000, by an agreement between the government of Edo and Delta states, the Company was ceded to Delta State Government, thus becoming a wholly owned Delta State Government Company.

U.I.D.C Plc is an investment development and finance company, undertakes investment activities and participates in the capital and money markets in order to take full advantage of opportunities present by the markets for the enhancement of the company’s wealth creative capabilities.FINANCIAL INSTITUTIONS

Its development activities involve mobilizing funds internal and external sources which could be used in providing medium and long term finance in the form of loans and equity for small and medium scale industrial projects and for short- term facilities in Delta State in particular and  Nigeria in general.FINANCIAL INSTITUTIONS

This also involves the rendering of consultancy services. As a finance company , it is involved in the provision of short- term finance services.FINANCIAL INSTITUTIONS


It is paramount to state as clearly as possible some of the prevailing problem of loan and debt recovery, how it has impeded the smooth operations of financial institutions and thereby hindering the banking sector chances of achieving its objectives.FINANCIAL INSTITUTIONS

The essence is to appreciate the magnitude and the vital roles which the investment company plays as the lubricant to the economy, as a sector, it is the pillar of the economy. It is therefore as a result of these important roles that the researcher have taken pains to carryout an in depth research into the impact of credit and debt recovery department in investment company with the view to identifying not only the problem loan, but the possible causes of this loan becoming bad debt and possibly make recommendation that will perhaps assist in solving these problems.


In the course of this research project, emphasis is to be made so as to answer the following research questions:

a) Criteria for judging the credit worthiness of an applicant

b) Is there any standard procedures for collecting loan?

c) Do financial institution review their lending and collecting policy?

d) Is there any step needed to be taken to recover loans from defaulters?

e) Does credit & debt recovery has an impact in Investment Company


For the purpose of achieving the objectives of this study, the information and relevant data will be collected and tested in subsequent chapters. The Null and Alternate hypothesis are given as follows:

Hi – Credit and Debt recovery plays a vital role in Investment Company.

Ho –   Credit and Debt recovery does not play any role in Investment Company


The aim of this research work is specifically:-

a) To uncover the root cause of the problem embodied in loan recovery

b) To comprehensively review how to conduct a credit interview / credit evaluation or ascertain the credit worthiness of a customer.

c)  To intensively study how credit can be administered and debt recovery strategies

It is indeed the researcher’s hope that by the time these objectives are achieved, a clear picture of the problems will surface and subsequently recommendations on how to go about tackling the problem will be made, it is also the researcher’s hope that by the time this is done, the attitude of the investment company towards lending and the borrowers attitude will change as it is only when the money lends are paid back that the company remains in business.


Like in all research work, the significance of this study are :

a) To provide additional material to carry out future research in this area

b) To increase and widen the scope of the researcher’s knowledge

c) To educate and enlighten the public on the impact of credit and debt recovery department towards accomplishing the organization objectives.

d) To assist the investment company in identifying some of its pressing loan problem with a view to take steps in recovering such loan which will make it achieve its overall objectives.


The researcher have decided to limit the area of coverage to Universal Investment & Development Company Plc , Warri Delta State, due to the nature of its activities particularly the department of Credit and Debt recovery division considering that they perform similar activities in the head office , other branches in the industries. It will be quite difficult if not impossible to cover the entire investment industry as it would involve traveling in order to have access to materials for information and other logistics which may eventually hamper the effort of the researcher.


When conducting a research, the researcher is faced with some constraints. The prominent constraints faced as a result of conducting the research are as follows:-

i)  Financial constraints, the present economic hardship amplified by the increase in fuel price has limited the researcher’s movement for this purpose.

ii) Time constraints, academic work for the semester occupied most of the time required for the research work allowing limited time for the research work

iii) Facts and vital information’s regarded as secret are been hoarded from the research, thereby limiting the information’s required

iv) Problem of busy schedules, rescheduling of booked appointment s, receiving phone calls and unscheduled meeting.


The terminologies used in this study are defined below for the clear and understanding of such terms by the readers.

SECURITY – Can be defined as a cash or fixed assets pledge by customers to secure loan.

DOCUMENTATION – This involves any written and endorsed papers that in one way or the other relates to the lending transaction.

DEMAND NOTICE – This is a reminder to the Client that a certain amount is due for repayment and the Client is advised to come along and meet his obligation.

STATUTORY NOTICE – This is a legal notice sent to the Client that he has certain period (usually three months) within which he must pay his loan.

FULL BACK ON GUARANTEE – This case applies in a situation where the loan is guaranteed by outside body.

LEASES – Is a contract between a lessor (the owner) and the lessee (the user) for hire a specific asset selected from a manufacturer or vendor of such assets by the lessee.

LOAN – Is the facilities extended through loan accounts for investment products of medium and long term nature where amortization is at predetermined intervals or made in full at the end of an agreed period.

SYNDICATE – Is simply the lending to one borrower by a group of banks or lending institutions.

CREDIT – Money given to a customer for later payment

CREDIT MANAGEMENT – Arrangement put in place of repayment of credit facilities

DEBT – Is the credit received by a borrower from a prime lender who may be a formal or informal financial institution.

BAD DEBT – Are debt are doubtful of recovery

FINANCIAL INSTITUTION – Refers to in this study represent mainly the banking sector and other investment houses.

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