Browsing by Author "Hagos, Alem (PhD)"

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    Assessment of Credit Management Practice, the Case of Oromia International Bank S.C
    (A.A.U, 2021-04) Keno, Meti; Hagos, Alem (PhD)
    This study is conducted aiming at investigating the credit management practices of OIB. It has assessed the overall operational issues in credit management processes maintained at OIB. An effective Credit management practice relies upon the Banks credit policy, credit portfolio, monitoring, supervision and follows up of loans and advances.Both primary and secondary data was employed for thus study;primary data wascollected usingquestionnaire and interview which was conducted with the managers andsupervisory staffsof credit department. Based on nature of study the secondary data wasgathered from yearly reports of the Bank 2016 to 2019,arrangement and technique dependent onpolicy and procedure.The research design was descriptive. Data analysis was undertaken usingExcel Spreadsheet and SPSS version20. The study has focused on major components of credit management. These include the application of the Bank’s credit policy and procedure, credit management and loan default, credit risk management, monitoring and control of credit, credit creation, collection and follow up. Finnnaly, ascan be concluded from the result of the study,OIB has a flexible credit management practice which is convenient for its loan customers. The study also depicted thatthe credit management practice of the Bank complies with its internal credit policy and procedure manual, regulatory directives of NBE as well as other applicable laws and regulations of the country. The study has also uncovered that there is no adequate internalcontrol activity maintained over the credit management practice of the Bank. This has a room to lead the Bank to credit, legal and reputational risk. Aspart offinancial statement assessment,the study has also noted that the statement providespoor loan credit management and weak credit risk mitigation. Among the Bank’s loan classification such as Pas, special mention, substandard, doubtful and loss categories, significant amount of loan and advances were found under NPLstatus (the last there loan classes). There was a total of above 3% un-performing loan which shows a loan default portion surpassing the Bank’s allowable for uncollectible loans and advances. And hence the studyrecommends thatestablishment of adequate, strengthened and effective internal control system is a coreactivity the Bank has to establish in order to mitigate the unforeseen risks of the Bank. The Bank shouldalso strictly pledge an effective follow up and monitoring system over loans and advances after their disbursement (after sales service) to reduce the amount of defaultingloans
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    Determinants of General Insurance Profitability: Evidence from Private Insurers in Ethiopia
    (2021-04) Tesfa, Samuel; Hagos, Alem (PhD)
    The objective of this research is to investigate and analyze the factors that mostly an effect on financial performance of general insurance of private insurers in Ethiopia over the period from 2011 to 2020 by using non probability judgment sampling design of private insurers and panel data was used. Quantitative types and explanatory research design was applied. The sample data was drawn from all the seventeen private insurance companies in Ethiopia. The firm specific and macro variables ;Premium Growth, Combined Ratio, Retention Ratio, Assets Turnover, Investment Return, Leverage, and Inflation and Growth rate of GDP were used to analyzed determinants of private insurers of general business profitability in Ethiopia. The researcher selected and specified the model of the study through Ramsey's & Hausman tests, and the result of the two tests showed that there were no omitted variables and random effect model is appropriate and best fit for the research study. The regression result showed that Combine Ratio, Leverage had a negative and significant relationship with ROA of private insurers in Ethiopia at significant level of 5%. On the other hands, Assets Turnover and GDP had a positive and significant relationship with ROA at significant level of 5% and 95% confidence interval. However, premium growth and inflation had insignificant relationship with ROA of private insurers in Ethiopia with negative and positive signs respectively. And investment and Retention were showed a positive but insignificant relationship with ROA. In line with the findings, companies would formulate pricing strategies that charges a premium commensurate to the risk; and policy-wise, insurers association, and all relevant stakeholders would intensely advocate for necessary regulatory measure that would introduce floor premium price practice to the Ethiopian insurance market; Insurance companies would invest and regularly upgrade their insurance management information systems; deploy relevant Enterprise Resources Planning (ERP) and other emerging Insurtech to add value to their services and to significantly cut their operation costs; Further regulatory measures would be put in place to revisit the amendment directives of UPR, and technical reserves computation and of increase capital requirement for establishment of insurance companies so that new entrants can start operations with solid capital base which can in turn help them diversify business of insurers so that more outreach that increase the NEP of insurers. Insurers have to devise a strategy to benefit from the booming Ethiopian economy by innovatively creating demands to gain a fair share from the increasing disposable income. Towards this end, insurers would intensely work on strengthening their research and product development wing to attract customer and private insurers would also increase their total assets