THE ROLE OF FINANCIAL INSTITUTION IN THE MANAGEMENT OF LOANSYNDICATION IN NIGERIA ECONOMY
ABSTRACT
            Since money is the machine that carter ports the economic growth and development in its economy, then this study ahs to examine the role of financial institutions in the management to loan syndication.  The study drives into identifying the parties and procedure involved in a loan syndication business and its important to the economy.
            Loan syndication is we will observed, helps in spreading risk of lending between different banks, it also helps in putting the management of lending on experts hands, this study was also carried out in other to ascertain what extent banks have contributed to the Nigerian economy through their provision of loan syndication to firms or contractors.
            The objective of this study therefore is look at the operation of loan syndication in Nigeria.  For an economy to develop there must be the existence of viable investment opportunities.  That is why the project also examined both development bank agricultural bank and merchant banking in the financing of large scale enterprises through loan syndication in the Nigerian economy, in this study a total of 5 (five) banks made up of development bank, Agricultural banks and merchant banks would be used as the sample of banks that carry out loan syndication business.  Also four (4) companies that benefited from loan syndication business.
            Some of the finding is that financial institutions do not give priorities to a particular sector of the company before giving syndication loans.  Also there is no effective government regulation that is governing loan syndication operation in Nigeria.  Customers view the terms of syndication loan agreement so favourable compare to the magnitude of the service rendered.
            As a result of the above finding the following recommendation is made.  The customers should negotiate carefully the terms and condition of syndicated loan.  The financial institution should also try to improve on infrastructural facilities, improve on documentation and reduce the consortium lending charges.           
TABLE OF CONTENT
CHAPTER ONE
Background of the study                           
1.1       Statement of problem                                 
1.2       Objective of study                                       
1.3       Significance of the study                          
1.4       Scope and limitation of the study            
1.5       Definition of terms                          
CHAPTER TWO      
LITERATURE REVIEW                                         
2.1         Profile of bank understanding                 
2.2         Profile of loan syndication beneficiaries            
2.3         Features of loan syndication                    
2.4         Parities loan syndication               
2.5         The borrower                                   
2.6         The loan bank                                             
2.7         Participating bank               
2.8         The syndication process                           
2.9         The contractual/documentation stage
2.10      The loan agreement/commitments letter.                       
2.11      The security documentation                     
2.12      Inter bank agreement                                 
2.13      The post-signing/credit administration stage
2.14      Effect of loan syndication on the economic
2.15      Problem of loan syndication                     
CHAPTER THREE
3.1         Findings/summary                                      
3.2         Recommendations                                     
3.3         Conclusion                                      
Bibliography                                    
CHAPTER ONE
BACKGROUND OF THE STUDY
            Banks come together forming what is known as ”Consortium” to advance finds is called “Loan syndication’ and is sometimes called “consortium” lending it can also be defined as the agreement between two or more landing institution to provide a borrower with credit facility utilizating common loan documentation.
            Loan syndication is now being practiced in Nigeria starting from the 1960’s when a consortium of commercial banks and acceptance houses discounted trade bills for marketing boards under the produced bill finance scheme.  Formalized loan syndication have into being during the oil boom of the 70s when there was need for adequate capital of financing the industrialization programmes.  During this period few merchant bank had been incorporated.
            Loan syndication has assumed international dimension because of he need to provide adequate capital to finance the fast growing world economy.  An international syndication credit is managed and under written by one or more financial institution normally from a location other than the domicle of the borrower.  Lenders from different countries could provide the borrower.  With access from their countries or to more than its own currency from other contracts of domicile.
1.1       STATEMENT OF PROBLEMS
            To investigated why loan syndication is not properly managed given priority attention by monetary authorities.  Despite its strategic place in financing viable projects, capable of injecting foreign currency creating employment and facilitating rapid economic development.
            To examine critically the place of financial institutions in the management of loan syndication in the economy.
            Loan syndication is a child of circumstances arising form legal lending restrictions risk sharing and liquidity problems.  The researcher would like to know despite these constrains prevailing is it still a supplementary option for business financing.
12.       OBJECTIVE OF THE STUDY  
            For an economy to get developed there must be a supplementary source of financing viable investment projects beyond the limits of an individual financial institution.  It is on this basis that we would like to define the objective.
            The following include the research study.
-               To identify those fundamental problems confronting loan syndication and suggest how much problem can be solved.
-               To ascertain the effect of loan syndication in the economic development.
-               To highlight the potentials of loan syndication in the economy.
-               To recommended that syndication loan is not different from other loan.  Rather it is subject to conditional attraction higher interest rate subject to default and time lapses in packaging as result of bureaucracy involved by consortium banks.
1.3       SIGNIFICANCE OF THE STUDY   
            This study is expected to have provided useful information on loan syndication to following:
            Studies: the students by the use of this project make researches and source information an the rule of financial institution in the management of loan syndication.
            Financial institution: Financial institution via this project will lean how to keep to their loan syndication agreements, it will also encourage the financial to give financial accommodation through loan syndication because it is more beneficial to the financial institution which will also loan how to reduce the time frame in packaging a syndication loan.
            Borrower: The borrower with the aid of this project will know the appropriate producers involved in obtaining loan through syndication.
            Since loan syndication contributes immensely tot eh development of our economy both the government and the targeted audience will benefit from the project.  The government with the help of this project will know more about the benefit of loan syndication in our economy.
1.5       DEFINITION OF TERMS
Adjusted Capital:                              It is the paid up capital plus statutory reserve of Bank.
Commitment Fee:                            This is a fee paid to lender for a formal line of credit.
 Default:                                              This is referred to the failure to pay interest and or principle at Maturity
Financial Intermediation:               This brings saving surplus unit together with saving deficit unit so that saving can be redistributed to their most
productive use.
Financial Market:                             This is an arrangement or place in which the creation and transferee of financial assets and financial liabilities take place.
Loan/Agent Bank;                It could be the original bank of syndication the first bank the borrower consulted or the bank that contribute the interest amount for the financing of the loan.
Inter Bank Agreements:      This is the document that spells out common agreement binding all the participating banks
Loan Agreement:                             This is the document that commits the borrower and the participating lender to terms and conditions of the loan.
Loan Syndication:                           It is the agreement between two or more lending institution with credit facility utilizing common loan documentation
Offer/Commitment Letter:   This letter spells out the terms and conditions governing the credit while the forma is the offer for an acceptance.
Participating Banks:                        They are banks involved in a particular loan syndication