This study looks at how loan granting impacts the performance of Nigeria’s Deposit Money Banks (DMBs), concentrating on the Mararaba Branch of UBA Bank PLC. The study intends to evaluate how loan defaults affect DMBs’ ability to maintain their financial stability, investigate the criteria taken into account when granting loans, and pinpoint tactics used to reduce loan defaults. With a 93.3% response rate, the survey questionnaire used in the study yielded insights from 14 of 15 completed questionnaires. The vast majority of participants indicated that approving loan had a favorable influence on the profitability, growth, expansion, and liquidity position of DMBs in Nigeria. On the improvement of credit risk profiles by loan granting, there was disagreement. It was discovered that loan defaults had a major impact on the financial stability of UBA Bank PLC’s Mararaba Branch and DMBs in Nigeria, emphasizing the necessity of efficient risk management strategies. After an assessment of the criteria taken into account before granting a loan at the Mararaba Branch, it was determined that collateral, loan size, purpose, repayment terms, and creditworthiness assessment were important considerations. On the significance of loan amount and collateral in the selection process, there was disagreement. UBA Bank PLC’s Mararaba Branch used credit appraisal, collateral requirements, proactive loan monitoring, frequent borrower follow-up, and efficient risk assessment and management techniques as strategies to reduce loan defaults. The study finds that loan defaults significantly affect the financial stability of DMBs and highlights how crucial it is to handle loan defaults well. It suggests creating strong frameworks for risk management, defining criteria for evaluating loans, diversifying loan portfolios, cooperating with regulatory agencies and banks to share information, conducting ongoing monitoring and evaluation, implementing public awareness campaigns, and making policy and regulatory changes.

Keywords: Loan Granting, Loan Beneficiaries, Lending, Bad Debts, Capitalized Expenditure, Assets,

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