Assessment of Credit Management Practices in the Case of Bank of Abyssinia
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Date
2025-03-28
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Publisher
AAU
Abstract
This study investigates the credit management practices of Bank of Abyssinia, aiming to
understand its approach to responsible lending and risk mitigation. A mixed-method
approach was employed, utilizing a questionnaire survey distributed to bank staff and in-
depth interviews with bank management. The collected data was analyzed using descriptive
statistics with the help of SPSS version 20. The analysis focused on current practices of bank,
the efforts underway and internal challenges (staff training, technology investments), external
influences (economic challenges, regulations), and transparency in communication. Key
findings reveal a strong foundation for credit management at Bank of Abyssinia. The bank
utilizes well-defined loan assessment processes, emphasizes staff training on responsible
lending principles, and prioritizes loan quality through performance metrics. However, the
study also identifies areas for improvement in resource allocation, with some respondents
perceiving limitations in technology investments and staffing levels. The research highlights
the significance of a comprehensive approach to credit management, emphasizing
responsible lending practices alongside effective resource allocation and adaptation to
external challenges. This study contributes to the field by providing valuable insights into the
credit management practices of a leading Ethiopian bank, offering a framework for analysis
applicable to other financial institutions. The recommendations presented, focusing on
optimized resource allocation, technology utilization, and continuous improvement
strategies, can benefit banks seeking to enhance their credit risk management capabilities.