This is a study of credit risk management in the Nigerian banking industry. The study seeks to examine how credit risk arises in the banking sector and the possible impacts on the economy. In a simple explanation credit risk is a term which denote that possibility on the part of a debtor not to honour the loan advanced to him as at when due, or credit risk can be defined as all risks that may lead to economic loss to the corporation as a result of the failure or inability of clients (it may be a company, government or individuals) to met their obligations as they come. To accomplish this work successfully, questionnaires, interviews and review of existing literatures were employed, facts were gathered from respondents and analysed. It was found that due to lack of proper or adequate collateral securities required by banks, people are refused loans. It was also

 discovered that it is not true that untimely processing and disbursement of loan result to credit risk to banks. It is also not true that loans disbursed to farmers are not sufficient for the execution of the projects and often off seasonal. It was also fund that bank faced with high credit risk is likely to

 experience loss of public confidence going by the result of the hypothesis. By and large the recommendations given in the study will help in no small

 measure to banks in terms of advancing loans, which is one of the fundamental reasons of their existence.