Browsing by Author "Enatfanta Teshome"
Item The Effect of Credit Risk Management Practice on Firm Performance: The Case of Selected Micro- Finance Institutions in Ethiopia(AAU, 2025-01-18) Enatfanta Teshome; Habtamu BerhanuThis study examines the effect of credit risk management practices on the performance of selected microfinance institutions (MFIs) in Ethiopia. The research focuses on three institutions: Vision Fund Microfinance Institution (VFMFI), Yegna Microfinance Share Company, and Nisir Microfinance Institution. Utilizing both primary and secondary data, the study evaluates how credit policies, risk assessment, and loan diversification strategies influence firm performance, specifically Return on Assets (ROA). The research employs an explanatory research design and statistical analysis tools, including regression and ANOVA, to investigate relationships between variables. Key findings reveal that effective credit policies, robust risk assessment practices, and strategic loan diversification significantly enhance financial performance. However, challenges such as poor implementation, insufficient borrower profiling, and limited loan diversification were identified as areas of concern. The study concludes that strengthening credit risk management practices is vital for the sustainability and profitability of MFIs. Recommendations include policy enhancements, staff training, and leveraging technology for improved risk assessment. This research provides valuable insights for policymakers, practitioners, and stakeholders in the microfinance sector, aiming to foster financial inclusion and economic developmentItem The Effect of Credit Risk Management Practice on Firm Performance: The Case of Selected Micro- Finance Institutions in Ethiopia(AAU, 2025-01-18) Enatfanta Teshome; Habtamu BerhanuThis study examines the effect of credit risk management practices on the performance of selected microfinance institutions (MFIs) in Ethiopia. The research focuses on three institutions: Vision Fund Microfinance Institution (VFMFI), Yegna Microfinance Share Company, and Nisir Microfinance Institution. Utilizing both primary and secondary data, the study evaluates how credit policies, risk assessment, and loan diversification strategies influence firm performance, specifically Return on Assets (ROA). The research employs an explanatory research design and statistical analysis tools, including regression and ANOVA, to investigate relationships between variables. Key findings reveal that effective credit policies, robust risk assessment practices, and strategic loan diversification significantly enhance financial performance. However, challenges such as poor implementation, insufficient borrower profiling, and limited loan diversification were identified as areas of concern. The study concludes that strengthening credit risk management practices is vital for the sustainability and profitability of MFIs. Recommendations include policy enhancements, staff training, and leveraging technology for improved risk assessment. This research provides valuable insights for policymakers, practitioners, and stakeholders in the microfinance sector, aiming to foster financial inclusion and economic development.