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AUTOMATION OF LOAN MANAGEMENT SYSTEM (A CASE STUDY OF KOGI STATE SAVING AND LOANS COOPERATIVE SOCIETY LOKOJA)

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Abstract

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1.1    OVERVIEW

Cooperative business in Nigeria could be said to have started in the year 1892 by the British in West Africa known as standard cooperative society of Nigerian with urge by some regional government of the western region, Eastern region and Northern region. The Western region established the national cooperative of Nigeria. In 1933, followed by the establishment of the Africa cooperative society of the eastern region in 1947. The cooperative society of the north that was owned by the Northern states was established in 1961. The standard cooperative society initially established as British and French bank in 1947 but later changed its name in 1961.

SAVING AND LOAN COOPERATIVE SOCIETY OF NIGERIA

A Saving and Loan Association is a financial institution that specialize in savings, deposit and mortgage loans and has become one of the primary sources of mortgage loans for home buyers today. It offers mortgage services to people from the saving and deposit received from private investors. Depositors and borrowers are members with voting rights and have the ability to direct the financial and managerial goals of the organization.

Kogi saving and loan limited (formally Kogi  Building society) is a primary mortgage institution established and licensed under Decree 53 of 1989 was in cooperated in 1991 and was licensed to commence retail mortgage Banking business on December 31

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  1991. Kogi Saving and Loan Limited has since inception survived the various confidence problem that have confronted the Nigerian mortgage Finance industry to emerge a key player in terms of efficiency, asset size and profitability.

1.2    STATEMENT OF THE PROBLEM

The problem associated with loan is that the borrower must attain to some conditions and operational scheme in the cooperative society. To avoid loan fraud, all managers should strictly comply with tending to these customers who might not default and also the customers should not be allowed to withdraw any amount until he has submitted his conditional letter of acceptance.

1.3    AIMS AND OBJECTIVES

The aim of the study is to develop a system to help manage loan. The objectives are;

1. Enhance proper record keeping and retrieval as at when necessary.
2. Provide an easy process of updating customer record using computer based system.
3. Capture customer’s data and store them in electronic form there by reducing electrical work and physical storage area.
4. Increase accuracy of stored data and ensuring proper accountability.
5. Maximizing the effectiveness at the lowest possible cost.
6. Provide information timely for effective management, planning and control.
7. The achievement of the above aims and objective will surely highlight the importance of this study. It will be a breakthrough in the management of loan.

1.4    SCOPE OF THE STUDY

The study of Automation of loan management system is limited to saving and loan cooperative society.

1.5    SIGNIFICANCE OF THE STUDY

This study if implemented will among others help to:

1. Eradicate the paper work involved in loan management.
2. Reduce fraud
3. Make repayment of loan easier to management of the cooperative.

 

1.6     DEFINITION OF TERM

1. AUTOMATION

Automation is the used of control systems and information technologies to reduce the needs for human work in the production of goods and services. In the scope of industrialization, automation is a step beyond mechanization where mechanization provided human operators with machinery to assist them with the muscular requirement of work, automation greatly decreases the need for human sensory and mental requirement as well. Automation place increasingly important role in the world economy and daily experience. Automation has had a notable impact in a wide range of industries.

1. COMPUTER

A Computer can be defined as an electronic device for storing data, typically in binary form according to instruction given to it. It can also be defined as a programmable machine design to sequentially and automatically carry a sequence of arithmetic which involved the manipulation of information, data and has the ability to store, retrieve and process, it also accept information in the form of digitalized data and manipulate it for some result based.

1. COOPERATIVE

A Cooperative is an autonomous association of person united voluntarily to meet their common, social and culture needs and aspirations through jointly owned and democratically controlled enterprises.

1. COOPERATIVE SOCIETY

Cooperative society is a business organization owned and operated by a group of individual for their mutual benefit or it can also be defined as a business owned and control equally by the people who used it services or by the people who work there.

1. LENDING

Lending in it most general sense, the temporary of money or property to another person with expectation that it will be repaid. In a business and financial context, lending include many different types of commercial loans. And they are;

1. Bank financing for small business startup and working capital
2. Asset  financing for equipment and machinery
3. Mortgages
4. Credit card financing
5. Personal (unsecured) loans.
6. LOAN

A loan is a thing that is borrowed especially a sum of money that is expected to be paid back. A loan is a type of debt, like all debt instruments, a loan entains the redistribution of financial asset over time, between the borrower and lenders. The loan is generally provided at a cost, referred to as interest on the debt which provides an incentive for the lender to engage in the loan. In a legal loan each of these obligation and restriction is enforce by contract which can also place the borrower under additional restriction known as “Loan Covenant”.