Determinants and Management of Credit Risk in Micro Finance Institutions: Empirical Study on Selected MFIs in Ethiopia
No Thumbnail Available
Date
2012-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
Credit risk is one of the risks any financial institution is exposed for; managing their
credit risk will be the key to their financial sustainability, The general objective of this
research is to determine the factors influencing Ethiopian Micro finance institutions
credit risk, management of credit risk of major Ethiopian MFls, and an entire review of
the management techniques and practices on credit risk management, The researcher
used a mixed approach study where the quantitative data show the determinants of credit
risk and the qualitative data describes the causes, techniques and other things related
with credit risk which is battler described qualitatively. In total ten years data often MFls
were used to make an econometrics model and five structured interviews are
administered to colleen the qualitative data, The finding suggest that five variables i,e,
loan to deposit ratio, average loan per borrower, total assets, leverage, and management
efficiency are significantly affecting the credit risk, and their credit risk arises from
different aspects that can be seen from three perspective i,e, external and internal
factors, borrowers and lenders characteristics, and firm and loan characteristics,
Although, Ethiopian MFls have different techniques that are used 10 manage their credit
risk.
Key Words; Credit risk, Micro Finance Institutions
Description
Keywords
Credit Risk, Micro Finance