MEASURES NECESSARY TO MINIMIZE THE HIGH INCIDENCE OF BAD DEBTS IN NIGERIA COMMERCIAL BANKS

ABSTRACT: This study was carried out to examine the measures necessary to minimize the high incidence of bad debts in Nigeria commercial banks with a special reference to Guarantee Trust Bank, Abuja. Specifically, the study examine  the causes of bad and doubtful debts in Nigeria Commercial Bank and  find out  the effects of bad and doubtful debts in banks profitability,and the economy. The study employed the survey descriptive research design. A total of 141 responses were validated from the survey. From the responses obtained and analyzed, the findings revealed that the causes of bad and doubtful debts in Nigeria Commercial Banks is financial difficulty, poor money management, declining health and medical expenses and high costs of living. The study also revealed that the effects of bad and doubtful debts in banks profitability,and the economy is  that it reduce banks' profitability, limit their ability to issue new credit, cause banks problems with their capital adequacy and slow down your cash flow. The study thereby recommend that banks Management should establish sound lending policies, adequate credit administration procedure and an effective and efficient machinery to monitor lending function with established guidelines. Also, reduction of interest rates on lending. Furthermore, the character and financial statement of the borrower must be properly studied. Lastly, the Central Bank of Nigeria should re-introduce interest rate regulation on banks.