Assessment of credit management practices in the case of private commercial banks of Ethiopia
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Date
2022-06-17
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A.A.U
Abstract
This study attempt to assess credit management practices in case of private commercial banks of
Ethiopia. the researcher use some Selection of banks for the study was done seven private
commercial banks of Ethiopia Awash bank S.C, Dashen bank S.C, Bank of Abyssinia, wegagen
Bank S.C, United bank share company , Nib international bank S.c and Addis international
Bank S.C. From those selected seven commercial banks with so many branches nationwide.
Therefore the researcher purposive sampling technique in order to select of the study. For the
purpose of these study both primarily and secondary data is used. Primarily data was collected
through questionnaires distributed to respondent that involve professional working in the bank
such as loan clients of the commercial banks. Department managers and senior officers working
on credit processing. Secondary data was obtained from National bank of Ethiopian regulations.
The data collected via questionnaire were analyzed with descriptive statistic using statistical
package for social science (SPSS-20). Respondents reported that the bank financial analyst
before extending the loan 68% of respondent relied that the sum of agreed and strongly agreed
Study participants reported that they agree about the procedure loan followed for loan approval
by the bank is satisfactory and also assess borrower past financial history, credit worthiness and
perform detailed financial analysis before extending the loans. The bank faced problems with
credit management practice including non-performing loan at various level and identified the
causes of NPL. The researcher can concluded that the researcher that the bank used different
credit management tools, techniques and assessment models to manage their credit risk to
reduce the amount of loan default. It is recommended that the banks should have credit
management policies’ measurement tools to achieve their objectives. Finding of this study assist
in forwarding recommendation to improve the problem the present credit management activity.
In addition to this, based on implication of the research also recommended areas for future research