Banks are the principal source of credit for the borrowers. It is quite impossible for any country to develop in industrial and commercial sector without sound banking system in modern economic era. Banks provide loan able funds for millions of households (individuals and families), for most local units of government and for agricultural, commercial and industrial activities of a nation. Bank lending is important to the economy, for it makes possible the financing of different sectors. At the same time, a bank will, therefore, distribute its funds among various assets in a manner as to derive sufficient income. But as liquidity and profitability are conflicting considerations. Loan portfolio is the
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