CHAPTER ONE.

1.0     INTRODUCTION

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.

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.

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.

1.1 HISTORICAL BACKGROUND OF U.I.D.C PLC

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.

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.

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