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The general objective of the study was to examine the lending procedure and loan recovery in banks. The purpose is to examine the ways of improving the lending policies and good measures on how money could be recovered. It vividly described procedure for taking securities for bank lending to these in the financial industry. The area covered by the study includes; Credit facilities, nature of loan and advances, ways of improving the lending policies and measures on how money could be recovered.
The stated analysis of the study has shown that, loan recovery is not determined by persuasion, court action, debt collectors and so on, The area covered by the study include, Overview of the credit facilities, Risk management, Acceptable securities in bank lending. Factors mitigating against recovery and Structure of loan management.
The study also takes a look at the review of the relevant literatures, which are the theoretical as well as empirical reviews on analysis and underline principles of bank credits. Gardner (1992), and Tadeo A Satta, (2003), explained that ‘’ Loan and Advances are important to banks because they account for a large proportion of their income’’
The study was conducted at CRDB Bank in Dar es Salaamregion and customers were given questionnaires. Purposive sampling technique was used and 40 questionnaires were given to customers and 10 questionnaires were given to Loan officers and administered.
The data were collected through primary and secondary sources, analyzed and assisted to come up with findings and recommendations. In the study it was found that persuasion method is the most acceptable strategy in the recovery of loan. More so the effect of nonperforming loans on the operations of the banks have led to the reduction in their project financing and other financial assistance being rendered to the general public. Also from the analysis and findings it was concluded that, no bank can survive in any economy without lending, whether the bank like it or not
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they should be ready to face the attendants problems of booking credit facilities to their various customers.
Finally based on the major findings on this research, and the need to reduce the attendants’ problem on loan, the recommendations made include, Proper implementation of the failed bank decree without favoritism on part of tribunal in discharging their duties. Bank of Tanzania should improve on its supervision, and examinations of banks. Banks should have good quality risk analysis, effective credit control and close supervision on disbursement and the up to date knowledge of the borrowers’ activities as well as adequate care should be taken to ensure that collateral; is marketable and should be free from any encumbrances. |
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