The impact of credit policy and loan recovery in commercial banks: a case study of centenary bank

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Kampala international international: College of Economics and Management
The study was carried out to investigate the impact of credit policy on loan recovery in commercial banks. The major objectives will be; to establish the procedures followed in loan recovery, to find out other factors that influence loan recovery and to establish the relationship between credit policy and loan recovery in commercial banks. The study employed 40 respondents at Centenary Bank on plot 7, Talenta House, Entebbe road. The data was collected and discussed based on the research objectives. Questionnaires were mainly data collection instrument supported by interviews. The collected data was both qualitative and quantitative using frequency tables and spearmans correlation analysis. Findings on procedures used in loan recovery are reducing on credit periods, use of loan amortization schedules, taking over properties presented as collateral at the time of loan application, holding group members for group loans. Other factors that affect loan recovery included information asymmetry, high interest rates fluctuating foreign exchange rates and lack of sensitization to the loan beneficiaries. Therefore the research study established that the relationship between credit policy and loan recovery very strong (r=0.89) using the Spearmans Correlation Analysis.
A research report submitted in partial fulfilment of the requirements for the a ward of bachelor’s degree of business administration in Kampala international university
Business administration, Credit policy, Loan recovery, Commercial banks, Centenary bank