Title:
MANAGEMENT OF BAD DEBT IN MICROFINANCE BANK IN NIGERIA: A CASE STUDY OF THREE SELECTED MICROFINANCE BANKS IN BENUE STATE NIGERIA

Authors:
ADAMU Garba, Nigeria

Abstract:

This study examined management of bad debt in microfinance bank in Nigeria: a Case Study of three selected Microfinance banks in Benue State Nigeria. Data was collected using questionnaire and analyzed using inferential statistics such as multiple regression analysis. The hypotheses of the study was tested using the probability values of the estimates. The result of the regression analysis shows that Non Performing Loan (NPL) has a negative effect on Management of Debt (MGD) in the selected Microfinance Banks in Makurdi Metropolis and the effect is not statistically significant (p>0.05). This means that a unit increases in Non Performing Loan (NPL) will result to a corresponding decrease in Management of Debt (MGD) in the selected Microfinance Banks in Makurdi Metropolis, Benue State, Nigeria by a margin of 38.7 %. Unsecured loan (USL) has a positive effect on Management of Debt (MGD) in the selected Microfinance Banks in Makurdi Metropolis, Benue State, Nigeria and the effect is statistically significant (P<0.05) and the effect is not in line with a priori expectation. This means that a unit increases in Unsecured Loan (USL) will result to a corresponding increase in Management of Debt (MGD) in the selected Microfinance Banks in Makurdi Metropolis, Benue State, Nigeria by a margin of 55.4 %. It was concluded that microfinance banks must develop proactive debt management strategies as a way to improve debt management. It was recommended among others that Management of the selected microfinance banks must intensify effort in bringing to the barest minimum the incidence of nonperforming loans in the studied banks.