An Appraisal of the Role of Credit Facilities in Promoting Retail Banking Growth: A Case Study of GTBank, Lagos State
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Background of the Study
Credit facilities are a cornerstone of retail banking growth, acting as the engine that drives financial inclusion, business expansion, and overall economic development. At GTBank in Lagos State, the provision of various credit products—from personal loans and overdraft facilities to SME financing—has been strategically aligned with the bank’s growth agenda. These credit facilities enable customers to access funds that spur entrepreneurial activities, facilitate capital investment, and foster improved liquidity management. GTBank’s innovative credit models have been designed to meet the dynamic needs of a diverse customer base, ensuring that both individuals and corporate clients benefit from tailored financial solutions. Advances in technology have allowed the bank to offer quicker credit assessments and faster disbursements through digital platforms, thereby reducing processing times and enhancing customer satisfaction (Ibrahim, 2023).
Moreover, the integration of risk management tools and sophisticated credit scoring systems has bolstered the bank’s ability to offer competitive rates while mitigating default risks. The bank’s credit facilities not only promote growth by providing necessary funding but also stimulate economic activities by enabling investment in key sectors. As retail banking evolves, the role of credit in driving growth has become increasingly critical, especially in a competitive financial market such as Lagos. GTBank’s approach reflects broader industry trends where accessible credit is linked to enhanced customer loyalty, increased market share, and improved financial performance. The bank’s strategic emphasis on credit facilities underscores its commitment to supporting local economic development and addressing financial challenges faced by its clientele (Chinwe, 2024; Akinola, 2025).
Statement of the Problem
Despite the strategic emphasis on credit facilities, GTBank faces challenges in ensuring that these products effectively drive retail banking growth. A significant problem lies in the balance between extending credit and managing associated risks. While credit facilities stimulate growth, they also expose the bank to higher default risks if not carefully monitored. Customers sometimes encounter challenges in understanding the terms and conditions associated with credit products, leading to mismanagement of funds and an increased risk of defaults. Moreover, the rapid evolution of digital lending platforms has heightened customer expectations regarding speed and convenience; however, legacy systems and bureaucratic hurdles occasionally slow down credit processing, thereby diminishing customer satisfaction (Ibrahim, 2023).
Furthermore, economic fluctuations and uncertainties in the external environment can affect borrowers’ ability to meet repayment obligations. Inconsistent customer financial literacy exacerbates these issues, as many borrowers may not fully comprehend the implications of high-interest rates or the penalties for late payments. The gap between credit availability and effective credit utilization poses a threat to the bank’s growth objectives and overall financial stability. This study aims to identify the core challenges within GTBank’s credit facility framework and assess the impact of these issues on retail banking growth. Ultimately, the goal is to propose strategies that can streamline credit operations while mitigating risk, ensuring sustainable growth in a competitive market (Chinwe, 2024).
Objectives of the Study
- To evaluate the impact of credit facilities on customer acquisition and retention at GTBank.
- To analyze the risk management mechanisms associated with credit offerings.
- To recommend improvements for optimizing credit processes to boost retail banking growth.
Research Questions
- How do credit facilities influence the growth trajectory of retail banking at GTBank?
- What risk management strategies are currently employed to mitigate credit defaults?
- What improvements can be made to enhance the effectiveness of credit facilities?
Research Hypotheses
- H₁: The availability of diverse credit facilities is positively correlated with retail banking growth.
- H₂: Robust credit risk management systems significantly reduce default rates.
- H₃: Enhanced customer education on credit products improves repayment performance.
Scope and Limitations of the Study
This study is confined to GTBank’s retail operations in Lagos State, focusing on its credit products and risk management practices. Limitations include potential data access restrictions, the dynamic nature of economic conditions, and variations in customer financial literacy.
Definitions of Terms
- Credit Facilities: Financial products that allow customers to borrow funds under predetermined conditions.
- Retail Banking Growth: Expansion in customer base, service offerings, and overall market share.
- Risk Management: Strategies employed to minimize financial losses associated with lending.
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