AN APPRAISAL OF THE EFFECTS OF THE DEVELOPMENT OF NEW CONSUMER CREDIT IN NIGERIAN COMMERCIAL BANKS
[A CASE STUDY OF DIAMOND BANK LTD]
ABSTRACT
Due to the rapid changes in the business of banking and rapid changes in the business environment in which such business are being conducted, the issue of consumer credit service or product cannot be over emphasized.
Banks are established to make profit. Are these profits made at the expense of the customers or is it as a result of the service produced by these banks? Nowadays banks have seen the urgent need for the provision of right type of quality services at any particular point in time and therefore have taken positive steps towards the development of consumer credit service and product that will meet the needs of customers.
In spite of the fact that banks develop this consumer credit services or product in order to cope with cut throat competition existing in the banking scene, banks should know the customers needs should be the number one factor to consider as satisfying their needs is the ultimate objective of the new consumer credit services.
This piece of work aim to find out how customers to react to this new consumer credit service or product and to find out if banks developed this credit service to meet the needs of customers. This research work contains the following in its chapters.
A general discussion of consumer credit product as seen by different people, objective of the study, its scope, limitations and definition of terms.
It also contains the method used in collecting relevant data and the way the questionnaire were distributed and compared and the treatment of data. The data gotten from the research survey were analyzed and interpreted.
Finally, the summary of finding, conclusion on the research and recommendation will also be made so to help achieve a better tomorrow.
  TABLE OF CONTENT
CHAPTER  ONE                                                             
1.0    INTRODUCTION
1.1   BACKGROUND OF THE STUDY
1.2   STATEMENT OF THE PROBLEM
1.3   OBJECTIVE OF THE STUDY
1.4   RESEARCH QUESTION
1.5   HYPOTHESES
1.6   SCOPE OF THE STUDY
1.7   SIGNIFICANCE OF THE STUDY
1.8  LIMITATIONS OF THE STUDY
1.9   DEFINITIONS OF TERMS
         REFERENCES
   CHAPTER   TWO
 2.0 LITERATURE REVIEW
 2.1  THEORETICAL REVIEW
 2.1.1   COMMERCIAL BANKS CONSUMER CREDIT PRODUCT
 2.1.2  DIAMOND BANK AND THEIR NEW CREDIT
2.1.3    FACTORS AFFECTING CONSUMER CREDIT DEVELOPMENT
2.1.4    PROBLEM OF CREDIT DEVELOPMENT
2.1.5    BENEFIT OF NEW CONSUMER CREDIT DEVELOMENT
2.2      EMPIRICAL REVIEW
            REFERENCES
CHAPTER   THREE                                              
 3.0   RESEARCH METHODOLOGY
 3.1   RESEARCH DESIGN
 3.2   AREAS OF STUDY
 3.3   POPULATION OF THE STUDY
3.4   SOURCES OF DATA
3.5   SAMPLING METHOD
 3.6  RESEARCH INSTRUMENTATION
 3.7   VALIDITY AND RELIABILITY OF RESEARCH INSTRUMENT
 3.8   METHOD OF DATA  ANALYSIS
 CHAPTER   FOUR                                                                      
 4.1  PRESENTATION AND ANALYSIS OF RESULTS
 4.2   TESTING OF HYPOTHESIS NUMBER ONE
 4.3   TESTING OF HYPOTHESIS NUMBER TWO
 4.4  TESTING OF HYPOTHESIS NUMBER THREE
  CHAPTER   FIVE
 5.1   FINDINGS
5.2   CONCLUSION
5.3   RECOMMENDATION
         BIBLIOGRAPHY
CHAPTER   ONE
1.O    INTRODUCTION
1.1     BACKGROUND OF THE STUDY
Banking today is undergoing a radical transformation. The symptoms are obvious; new players, new channels are appearing daily. This transformation is taking place across all sectors of the banking industry.
The financial sector with special reference to banking in Nigeria has come under the searchlight in recent years not only because of its strategies role as mediator of funds between the surplus and the deficit units but also as a result of the problem militating the industry in terms of failure and eventual death(Bankruptcy).
It has become a thing of the past when bank manager fold their hands and roll in armed chairs in their offices waiting for customers to look for them. Commercial banks are faced with aggressive competition on everyday in their businesses.
Banking is a dynamic business and operates in a more dynamic society which bring challenges to be the banks door steps daily and these challenges to tackled, banks must develop consumer credit by either a way of introducing new ones or improving the existing ones. The impact of ill health in banking sector left nobody untouched ranging from the government, the regulatory authorities, the bankers as well as the general public. It is in this spirit that predicting the potential of failure in the sector becomes imperative if these actors/players are to be rightly guided in their decision making ventures.
Moreover, as banks grow their customers of different tastes and fashions grow and for these target customers, banks must consider the development of imperative to suit their customers taste.
This research work is aimed at identifying the customer credit available in commercial banks, how they could be developed, problems facing their development and the prospects of the satisfaction of the target customer taking Diamond Bank as a case study.
Therefore, new consumer credit development and quality should not be over emphasized.
1.2   STATEMENT OF THE PROBLEM
Commercial banks have been making relentless efforts towards the development of new consumer credit in Nigeria. Yet many of the credits services development have not been able to satisfy the needs of their target customers. As a result of this, these consumers credit do not receive adequate patronage and resources are wasted, this affects the bank profit negatively. However, there are many had nuts to crack in the development of consumer credit services, which makes it difficult for management to introduce new products even when the old ones lack patronage. This affects the rate at which commercial banks develop consumer credit and in generating income.
Again some of the target customers are not  aware  of the existence of some consumer credit  of the banks, which makes such services lack patronage, even when patronized, only a few people patronize them. Hence banks  efforts in their development become futile.
Furthermore, customers at the banks are not adequately educated on the banks consumer credit developed and some bank staffs are not properly equipped on the marketing of financial services, which  makes it possible for profitable opportunities to be grouped in the banks, such lack of education render banks efforts fruitless and resources used in developing such consumer services are wasted.
Finally, some management of banks find difficult to segment market for their services in that, the services receive little or no demand which at the end, render banks effort unprofitable.
 1.3   OBJECTIVES OF THE STUDY
Specifically, this study intends to;
a. Identify the difficulties encountered in the process of consumer credit  development in commercial banks
b. Determine whether bank customers are really satisfied with the banks services or not, and why?
c. Find out the best ways to educate the  customers on the use of the banks credit and the best way to create awareness of the existence such consumer credit.
d. Identify the best way the banks consumer credit market could be segmented for a fruitful venture.
1.4   RESEARCH QUESTIONS  
The research questions are as follows;
a. To what extent does the difficulties encountered in the process of consumer credit development affect commercial banks?
b. What is the extent of satisfaction of customers with  commercial bank consumer credit?
c. What are the effects of customers education on the usage and level of awareness  on the banks  consumer credit?
d. What are the effects of  improper market  segmentation of the new consumer credit on the marketability.
 1.5    RESEARCH HYPOTHESIS
   The research hypothesis being an intelligent guess on the research question could be obtained when the question are transformed as follows;-
1. Ho: The difficulties encountered in the process of consumer credit development have no effect on commercial bank services.
      Hi: The difficulties encountered in the process of consumer credit development have effect on commercial banks services.
 2. Ho: The commercial banks new credit have not satisfied customer needs.                                                                                                                              
     Hi: The commercial banks consumer credit have satisfied customers needs.
 3. Ho: The education of customers on the usage of new consumer credit and their level of awareness have no effect on the banks consumer credit development.

   Hi: The education of customers on the usage of new credit and their level of awareness have effects on the banks consumer credit development.
 4.  Ho: Improper  market segmentation of the consumer credit have no effects on its marketability.
      Hi:  Improper market segmentation of the consumer credit  has effects on its marketability.
 1.6   SCOPE OF THE STUDY
Due to some constraints, the researcher therefore limited the scope of the study to only Diamond Bank Limited.
 1.7   SIGNIFICANCE OF THE STUDY
The study has both practical and academic significance as documented below:
1.  PRACTICAL SIGNIFICANCE
a. Through this study, bank managers who have not been up and doing will sit up for they cannot see things go in the negative direction and say that there is no problem.
b. This research work will also help the commercial banks know the extent of the competition they are facing and declare their stand with their banks in the same class or other commercial institution rendering or affecting the same service type through the development or innovation of new services in their regional branch and head offices.
c. Moreover, this work is equally valuable assets to the economy at large since good credit development leads to banks profitability, which in turn leads to growth in the economy.
2.   ACEDEMIC SIGNIFICANCE:
a. This work will be useful in addition to existing numerous literatures for future research reference.
b. It will also serve as a partial fulfillment for the an award of (HND) Higher National Diploma in Accountancy.
 1.9    DEFINITION OF TERMS
1. Bank customers: According to Orjih (1996) A person, firm or company may be   termed a customer which the banks only accepts.
2. Consumer Credit: This is anything  or specifically services for banks that can be offered to a market  for attention, acquisition, use or consumption.
3. Innovation: This is the process of making changes to introduce new ideas, method etc.
4. Target Customer: The particular banks customers to which the services are fashioned.
5. Bank Resources: Banks finance that is used in investment.
6. Banks Service Demand: This is the ability complied with the willingness to pay for particular service at a particular time.
7. Market segmentation: It is an approach to marketing in which the marketer splits the total market into smaller, more homogenous groups and aims production and selling strategies at these target markets.