1.5 RELEVANCE OF THE STUDY

Providing large amounts of data is not in itself helpful, in fact, it may confuse and hinder more than it helps (Perry et al, 2012)

Being one of the many efforts directed towards evaluating the role of accounting information on the lending decisions of commercial banks, this research project will be significant in the following ways;

First, the credit managers who desire to sharpen their decision-making ability on loan request will find this study very useful. This is because the study is aimed at finding problems faced in making lending decisions.

Also, the study will help the government and any other governing authority to regulate the activities of commercial banks and to help them put in place a suitable structure that will help regulate such activities or set standards.

Again, this work will be useful to lenders in that it will help keep them informed about the level of risk involved in giving loans as communicated by financial statements of borrowing enterprises. In this regard, it will also help credit managers to ascertain the loan interest to charge based on the risk of non-repayment involved.

Furthermore, this study intends to serve as literature for further researchers and to generate ideas which will have policy implication for commercial banks in extending credit facilities to their clients.

1.6 SCOPE AND LIMITATION

1.6.1 SCOPE OF STUDY

This study is intended to cover commercial banks having branches in Buea. The choice of Buea is attributed to the fact that it is the administrative capital of South West region and is one of the major towns in this region. Being the capital town of South West Region, Buea has attracted many businesses, and therefore banks. Many categories of people use banks for money safeguard and for obtaining credits maybe to start-up businesses, expand already existing businesses or for other projects. These categories include farmers, merchants, students, tourists and more.

From observations, banks in Buea have branches clustered in the major commercial center of Molyko. This clustering of commercial banks in this area will positively affect the successful completion of this project as it will make them easily accessible for study at a minimum cost.

1.6.2 LIMITATION OF THE STUDY

The following are the limitations to this research;

1. The small number of study subjects. At the time this study was undertaken, there were only seven commercial banks in Buea. Due to the small size of the sample, the use of sophisticated statistical technique to analyse the findings is limited. Also, this small number of study subjects may not be a representation for a larger geographical coverage.
2. Another limitation is time constraint. As this is an academic work done within a given time frame, the researcher finds the time to be a limiting factor to the study.

• Also, the study pertains to lending to corporate business organisations rather than persons or entities that are not statutorily allowed to publish their financial statements.

1.7 ORGANISATION OF THE STUDY

The study is made up of five chapters. The contents of each chapter is organised as follows;

Chapter one is the introductory chapter. It introduces the study stating the background of the study in relation to earlier researches, the problem to be addressed, the research questions and objectives, the importance, scope and limitations of the study.

Chapter two deals with literature review and focuses on review of past research work on same topic.

Chapter three describes the research methodology

Chapter four dwells on data presentation and analysis

Chapter five contains the summary of findings, recommendations based on the findings, and conclusion of the whole work.