Optimal Fund Allocation of Loan (Case Study: Unibank (Ghana) Ltd)

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Most Ghanaians who are in the working class both in the formal sector and the informal sector take loans for reasons of acquiring personal properties (houses or cars), investment in businesses, set up a business and continuation of education. Majority of Ghanaians rely on financial institutions like Banks for Loans. This thesis used the linear programming model to maximize profits through allocation of funds by the bank (Unibank). Data were taken from Unibank for this project and interior point method specifically Karmarkar’s algorithm was used for the computation. The optimal solution converts x_1 to GH¢113,800.00 for personal loan, x_2 to GH¢145,900.00 for small and medium enterprise loans, 〖 x〗_3 to GH¢99,900.00 for agricultural loans, no amount allocated to x_4 for construction loans, x_5 to GH¢142,400.00 for car loans and 〖 x〗_6 to GH¢288,200.00 for industrial loans show that the bank should allocate funds to all the types of loans accept construction loan and this would yield a minimum profit of GH¢17,286,000.00. Concluding, the solution meets the policy of loan preference of Unibank.
A Thesis Submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the award of a Master of Science degree in Industrial Mathematics. JUNE, 2011