There are many factors that can affect lending by most bank managers and many of them are outlined below;
1. Type of account the customer operates: Although loans are available to non-account owners, in general more loans are given to current account owners as compared to those operating savings accounts.
2. Amount involved: If it is a large amount of loan, the bank manager will consider that if such amount is written off, it will not affect the financial position of the bank.
3. Past financial dealings of the customer with the bank: A person with good past financial dealings with the bank has more chances of getting a loan and vice versa.
4. The purpose for which the loan will be used: Financially profitable projects are considered as more purchase bank managers to ensure that the loan will be used for projects that will provide profit so that it Enable the borrower to repay the loan.
5. Offering collateral security: These collateral securities which are immovable assets should be things that the bank can sell easily and for more than the value of the loan given.
6. Repayment Period: The repayment period of this type of loan is very important because, the bank would not want its loan to be tied up for a very long time, despite the fact that it changes the interest on the loan.
7. Customer Referee: The referee should be someone who is well known to the bank and who will guarantee that in the event of the borrower defaulting or becoming insolvent, he will repay the loan.
8. Earning power of the customer: Earning power of the individual as compared to the amount to be given as loan are some of the determining factors for granting and issuing loan.
9. Sources of Repayment: The bank manager would also like to know the possible sources that the borrower has to repay the loan.
10. Current government policy on bank lending: A customer may satisfy all the “conditions”, but if the government’s policy on lending is credit squeeze, the bank will not lend and vice versa.