DESIGN AND IMPLEMTANTATION OF A FUND LENDING DECISION SUPPORT SYSTEM FOR FINANCIAL INSTITUTIONS

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Price: 2000 Naira (BSC, MSC)

ABSTRACT

The main aim and objective of this system is to analyze, design, and develop a computerized information system of a fund lending decision system for financial institution a case study of First Bank of Nigeria. After the study of the existing system, this project is suggested as a system that can enhance the business function in terms of capability and control. In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that debt until it is repaid as well as to repay the principal amount borrowed

The database of this proposed system is design with MySQL and the programming Language used is PHP. This Language was chosen because of its object oriented features and class libraries for developing online applications.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that debt until it is repaid as well as to repay the principal amount borrowed.

The document evidencing the debt (e.g., a promissory note) will normally specify, among other things, the principal amount of money borrowed, the interest rate the lender is charging, and the date of repayment. A loan entails the reallocation of the subject asset(s) for a period of time, between the lender and the borrower.

The interest provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice, any material object might be lent.

Acting as a provider of loans is one of the main activities of financial institutions such as banks and credit card companies. For other institutions, issuing of debt contracts such as bonds is a typical source of funding.

A decision support system (DSS) is an information system that supports business or organizational decision-making activities. DSSs serve the management, operations and planning levels of an organization (usually mid and higher management) and help people make decisions about problems that may be rapidly changing and not easily specified in advance—i.e. unstructured and semi-structured decision problems. Decision support systems can be either fully computerized or human-powered, or a combination of both.

While academics have perceived DSS as a tool to support decision making processes, DSS users see DSS as a tool to facilitate organizational processes (Keen, 1980). Some authors have extended the definition of DSS to include any system that might support decision making and some DSS include a decision-making software component; Sprague (1980) defines a properly termed DSS as follows:

  1. DSS tends to be aimed at the less well structured, underspecified problem that upper level managers typically face;
  2. DSS attempts to combine the use of models or analytic techniques with traditional data access and retrieval functions;
  3. DSS specifically focuses on features which make them easy to use by non-computer-proficient people in an interactive mode; and
  4. DSS emphasizes flexibility and adaptability to accommodate changes in the environment and the decision making approach of the user.

DSSs include knowledge-based systems. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, and personal knowledge, or business models to identify and solve problems and make decisions.

Typical information that a decision support application might gather and present includes:

  • inventories of information assets (including legacy and relational data sources, cubes, data warehouses, and data marts),
  • comparative sales figures between one period and the next,
  • Projected revenue figures based on product sales assumptions.

1.2 Statement of the Problem

First bank of Nigeria is a fast growing financial institution. Correspondingly, its lending capacity is increasing in figures and scope. Currently its software application is very slow and not user friendly and most time some of the loan on their mobile application you need to be pre-register in their respective branch before you can start having access to those loan.

The main problems that this project seeks to address are:

  1. The problem of time wastage.
  2. The problem of unnecessary delays in performing banking transaction.
  3. The problem of lack of decision and precision that is lack of particular approach to loan assessment which could lead an existence of a standard which is very bad for the business.

1.3 Aim and Objective of the Study

The main aim and objective of this system is to analyze, design, and develop a computerized information system of a fund lending decision system for financial institution a case study of First Bank of Nigeria. After the study of the existing system, this project is suggested as a system that can enhance the business function in terms of capability and control. The specific objectives of this project are as follows:

(1) To study the problems of the existing manual system.

(2) To increase speed of validation and reliable system.

(3) To be able to quickly access previous record required.

(4) To increase effectiveness and efficiency of the system.

(5) To provide more accurate information and the quality of information by reducing the human error, and the inconvenience caused by manual work.

(6) To generate the variety of report forms from computerized system.

(7) To reduce the data collecting time and operating cost including manpower related to the system because the system can replace some of the employees in handing document-based works, and the management will have more control over the budget management.

(8) To reduce the number of errors which come from the manual system.

1.4 Significance of the Study

The anticipated benefits, which the company will receive from implementing, can be classified as following:

(1) Reduction of time consuming in the process

(2) Efficiency in organizing all loan documents

(3) Accuracy in data and system auditing

(4) Reduction of data redundancy, and data inconsistency

(5) Improvement of the information flows in the organization

(6) Beneficial report provided for management team

1.5 Scope of the Study

The scope of this study is centered on design and implementation of a fund lending decision support system for financial institutions, a case study of First Bank of Nigeria.

1.6. Limitation of the Study

Usually, every work has some limitations and this study is not exempted.

The two major limitations of this study are the high programming technique as well as financial constraints. The high programming technique constraint in PHP, JQUERY and MYSQL prevents the researcher to have an in depth study and analysis on the subject matter. While the issue of financial constraint limits the frequency of investigation to/from the institution toward gathering the necessary information relevant for the study.

1.7 Definition of Terms

Commercial and industrial loans: loans to business or industrial firm.

Consumer loan: loans for customers to purchase goods.

SQL: structural query language.

Loan: money that an organization such as bank lends and somebody borrows.

ASP.NET: hypertext processor

HTML CODE: – HTML stands for Hyper Text Markup Language. It is a type of computer language that is primarily used for files that are posted on the internet and viewed by web browsers. HTML files can also be sent via email.

Markup language: – A markup language is a combination of words and symbols which give instructions on how a document should appear. For example, a tag may indicate that words are written in italics or bold type.

Web browser: -A Web browser is a software program that interprets the coding language of the World Wide Web in graphic form, displaying the translation rather than the coding. This allows anyone to “browse the Web” by simple point and click navigation, bypassing the need to know commands used in software languages.

File extension: – A file extension is the suffix at the end of a filename that tells a computer, and the computer user, which program is needed to open the file. Also called a filename extension, this suffix preceded by at least one period, is generally one to five characters long but the norm is usually three characters in length.

Email: – Email, also sometimes written as e-mail, is simply the shortened form of electronic mail, a protocol for receiving, sending, and storing electronic messages. Email has gained popularity with the spread of the Internet. In many cases, email has become the preferred method of communication.

TCP/IP: – This often used but little understood set of operations stands for Transmission Control Protocol/Internet Protocol. TCP/IP is the combination of the two and describes the set of protocols that allows hosts to connect to the Internet. In actuality, TCP/IP is a combination of “more than those two protocols, but the TCP and IP parts of TCP/IP are the main ones and the only ones to become part of the acronym that describes the operations involved.

TEXT FILE: – A text file is a computer file that stores a typed document as a series of alphanumeric characters, usually without visual formatting information. The content may be a personal note or list, a journal or newspaper article, a book, or any other text that can be rendered accurately in typewritten form.

Hyper Link:-A hyperlink is a graphic or a piece of text in an Internet document that can connect readers to another webpage, or another portion of a document. Web users will usually find at least one hyperlink on every webpage. The simplest form of these is called embedded text or an embedded link.

WWW: – acronym for World Wide Web.

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