Browsing by Author "Kusi, Prince"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    Optimal Loan Portfolio (A Case Study Of Agricultural Development Bank, Sunyani)
    (2013) Kusi, Prince
    Many customers in ADB, Sunyani branch take loans for various reasons some being investment in businesses, agriculture or their wards education. Others also take loans to acquire personal properties such as houses and cars. Due to poor allocation of funds by most banks to prospective loan seekers the banks are not able to maximize their profits. In view of this monies that can be used for social services in the community in which they operate go into bad debt. The main aim of this study is to develop Linear Programming (LP) model to help ADB Sunyani branch in the Brong Ahafo Region to allocate their funds to prospective loan seekers in order to maximize profits. To achieve this aim, a secondary data were extracted from the annual reports and financial statements of the bank. Based on these empirical data, LP model was formulated. A computerized software application called LP solver (Lips) based on Revised Simplex Algorithm was used to solve the problem. The results from the model showed that ADB Sunyani branch would be making annual profit of GH¢ 476732.00 on loans alone as against GH¢ 190693.00 in 2011 if they stick to the model. From the study, it was realized that the Scientific method used to develop the proposed model can have a significant increase in the bank’s profit margin if put into use.