Credit risk management and loan repayment in commercial banks in Uganda: a case study of Centanary Bank Limited Kbalagala Branch.
Loading...
Date
2017-05
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Kampala International University.College Of Economics and Management
Abstract
The study was done on credit risk management and loan repayment in commercial banks in
Uganda. The study was carried out at Centena;y Bank, Kabalagala branch. The researcher
collected both primary and seconda;y data, using the survey method and review of the existing
literature respectively. Questionnaires were used for data collection. The researcher collected
both prima1y and secondary data, using the survey method and review of the existing literature
respectively. Questionnaires were used/or data collection. The study advanced several solutions
that could help in improving credit risk management for loan repayment. Some of the solutions
advanced .fi'om the study .findings include: Increased monitoring and supervision, more staff
training and mentoring, this aims at making sure that staffe have the right skills and knowledge
to handle credit management processes for better loan repayment, Establishing sound lending
policies, Designing risk profiles to guide the lending profiles. The study also established several
effects a/credit risk management on loan repayment in commercial banks in Uganda. Some of
the effects realizedfi·om the study_findings include: Credit risk management is vital in assessing
the risk of losses associated with credit extended to customers, financial investments and
counterparty risks. Credit risk management Enhances cross-functional cooperation especially
between the credit and other banks departments. Increased profitability due to reduced Bad
debts written off Leads to reduced credit risk due to involvement of Credit commitlees' in
making decisions regarding loans. The study also revealed that there was a sign/ficant effect
between credit risk management and loan repayment in centena;y bank. There was a positive
relationship of between credit risk management. The study fi1rther recommended that to
strengthen the process of credit risk management Centena1J1 bank should put stronger emphasis
in ident/fying and priotising their market segments. During the process of documentation, prior
to credit approval and disbursement, there is great need for credit officers to ascertain that all
loan advances are completely secured by collateral securities which have higher values and are
very marketable. The Bank should also adopt credit policies that would help improve prudential
Jversight of asset quality and to establish a set of minimum standards that should be applied
1e_fore credit is advanced to customers. Further, as borrower selection is the key to succes~fiJ/
'ending, banks should.focus on the selection of true borrower.
Description
Research report submitted to the College of Economics and Management studies in partial fulfillment of the requirements for the award of bachelors degree in Business Administration and Management of Kampala International University
Keywords
Credit risk, Management, Loan, Repayment, Commercial banks, Uganda