The effects of credit policy on the performance of commercial banks:
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Date
2012-09
Authors
Journal Title
Journal ISSN
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Publisher
Kampala International University, College of Economics and Management
Abstract
This research aimed at the effects of credit policy on the performance of commercial Banks in Kenya.
it was guided by the following objectives; to establish the relationship between credit policy and
performance in commercial banks; to examine the roles of credit policy towards performance of
Chase Bank; to determine how Chase Bank has reviewed their credit policy in regard to performance
and to analyse the impacts of credit policies on the performance of Chase Bank.
Having employed both qualitative and quantitative methods of data collection, where 100 respondents
from Nakuru County participated, it was found out that the good performance of Chase bank was
mainly contributed by the credit control measures as a result of well established credit policy
screening mechanism in place before credit is extended to clients. It's evident from this study that
indigenous commercial banks in Kenya use all the elements of credit policy management process, but
are not comprehensively using the aspects of the various elements of the process in the management
of their credit function.
there is a significant and positive relationship between the elements of credit policy management and
the performance of Chase bank thus these findings reveal that the credit policy management in the
bank has a strong impact of the quality of the bank's loan portfolio and thus the performance of the
bank.
in light of the conclusion drawn above and the findings obtained during the study, the researcher
ecommended that Chase bank should work in conjunction with other banks to come up with a
centralized customer data for easy access on details concerning a customer's credit worthiness,
financial institutions should always have qualified and experienced credit team who can tell a
suitable candidate before any loan is given. Also financial institutions should always keep records on
an maturity and terms and conditions given to a client before loan is disbursed should be followed
by financial institution to avoid defaulters.
Description
. A research dissertation submitted to the college of economics and applied sciences in partial fulfillment of one of the requirements for the a ward of Bachelor’s Degree in Business administration of Kampala International University
Keywords
Credit policy, Performance, Commercial banks, Kenya.