Credit Risk Management and Profitability in Ethiopian Microfinance Institution
| dc.contributor.advisor | Duressa, Degefe (PhD) | |
| dc.contributor.author | Regassa, Amanuel | |
| dc.date.accessioned | 2018-06-20T13:56:03Z | |
| dc.date.accessioned | 2023-11-08T14:37:34Z | |
| dc.date.available | 2018-06-20T13:56:03Z | |
| dc.date.available | 2023-11-08T14:37:34Z | |
| dc.date.issued | 2015-11 | |
| dc.description.abstract | Microfinance institutions (MFIs) today are the largest financial institutions around the world. However, they are facing risks when they are operating. Credit risk is one of the most significant risks that microfinance institutions face, considering that granting credit is one of the main sources of income in microfinance institutions. Therefore, the management of the risk related to credit affects the profitability of MFIs. The aim of the research is to provide stakeholders with accurate information regarding the credit risk management of microfinance institutions with its impact on profitability. The main purpose of the research is to investigate if there is a relationship between credit risk management and profitability of microfinance institutions in Ethiopia. In the research model, ROE and ROA are defined as proxies of profitability while PAR>30 days, LLPR, WOR & RC are defined as proxies of credit risk management. The research collects data from 12 microfinance institutions in Ethiopia from 2003 to 2012 and formulates two hypotheses which are related to the research question. A series of statistical tests are performed in order to test if the relationship exists. The findings reveal that credit risk management does have statistically significant effects on profitability of commercial banks. Between the four proxies of credit risk management, LLPR & WOR have a significant effect on the both ROE and ROA while PAR>30 days & RC have an insignificant effect on both ROE and ROA. Key words: Credit risk management, Profitability, microfinance institutions, PAR>30 days, LLPR, WOR, RC, ROA, ROE. | en_US |
| dc.identifier.uri | http://etd.aau.edu.et/handle/123456789/2388 | |
| dc.language.iso | en_US | en_US |
| dc.publisher | Addis Ababa University | en_US |
| dc.subject | Credit risk management; Profitability, microfinance institutions; PAR>30 days; LLPR; WOR; RC; ROA; ROE. | en_US |
| dc.title | Credit Risk Management and Profitability in Ethiopian Microfinance Institution | en_US |
| dc.type | Thesis | en_US |