PROJECT APPRAISAL IN NIGERIA A CASE STUDY OF INTERNATIONAL MERCHANT BANK (NIGERIA) LIMITED

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dc.contributor.authorIDOKO, BENARD ABA
dc.date.accessioned2014-02-07T11:41:53Z
dc.date.available2014-02-07T11:41:53Z
dc.date.issued1985-11
dc.descriptionA PROJECT SUBMITTED TO THE POST-GRADUATE SCHOOL, AHMADU BELLO UNIVERSITY, IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE 1 OF MASTER OF BUSINESS ADMINISTRATION (M.B.A.)en_US
dc.description.abstractProject appraisal is concerned with decisions about whether, when and how to spend money on projects. Such decisions were discovered in this project to be very crucial both to the project promoter and the lender, as large sums of money are often committed in an irreversible manner with no certain knowledge of the size of future benefits. Problems identified as militating against project appraisal included the uncertainty of projections, dearth of standards for comparison and government credit guide lines/shortage of funds, amongst others. Traditional appraisal techniques as reviewed in the l i t e rature comprise of market analysis, economic analysis, technical and management analysis, then financial analysis. IMB's project appraisal techniques were found to conform to the traditional techniques except in the area of financial analysis. While the traditional tools of financial analysis are the Net Present Value, Internal Rate of Return, Accounting Rate of Return, Payback Period and Profitability Index, the bank's a financial analysis simply comprise of a review of the project cost, financing source and project profitability/debt service ability using the projected financials usually provided. It was also found out that the bank relies more on the financial analysis of projects in taking the accept /reject decision and that relationships other than the Banker/ Customer relation are brought to bear in the accept/reject decision. Also discovered was the fact that collateral security is viewed seriously and could lead to the rejection of a project if found inadequate. Also discovered was the fact that the bank's project appraisal objectives are in agreement with the Federal Government development objectives except that projects with short gestation periods are favoured — which is however in response to the bank's sources of funds. The above were a ll found true in the analysis of a tipically 1MB - appraised project which was named BENCO in the case study. To ensure a prudent financial management of the project (BENCO) a member of convenants were entered into between the bank and the project sponsors as conditions precedent to the loan. It was also recommended amongst others that;- the bank adopts the discounted techniques of project appraisal since such technieques favour projects with longer and higher economic benefits. - Where financial appraisal is restricted to profitability and debt-service ability, the bank should take minimal collateral security since it must have satisfied i t s e l f that ' the project can conveniently service the debt. - The bank incorporates some elements of risk analysis in i t s appraisal techniques so as to discourage the heavy reliance on collateral security in lending. Social connections/extra-curricular relationships should never be brought to bear in prject appraisal as this has the effect of reducing the competitiveness of the project. - Project promoter need to be honest and provide actual figures obtained rather than window dressing projects to attract patronage.en_US
dc.identifier.urihttp://hdl.handle.net/123456789/709
dc.language.isoenen_US
dc.subjectPROJECTen_US
dc.subjectAPPRAISALen_US
dc.subjectNIGERIAen_US
dc.subjectINTERNATIONALen_US
dc.subjectMERCHANTen_US
dc.subjectBANKen_US
dc.titlePROJECT APPRAISAL IN NIGERIA A CASE STUDY OF INTERNATIONAL MERCHANT BANK (NIGERIA) LIMITEDen_US
dc.typeThesisen_US
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