The research intended tg establish the credit policy on loan recovery in microfinance institutions,
case of Popular Bank.
The objective of the of the study was to establish the existence of credit policies in Popular Bank
Rwanda, to examine how loans were recovered in Popular Bank, Rwanda and to establish the
relationship between credit policy and loan recovery in Popular Bank, Rwanda.
The research methodology adopted both descriptive and analytical research design based on semistructured
questionnaires to gain an in-depth understanding of credit policy management and loan
recovery. A sample size of 140 respondents was used. Stratified sampling method was adopted for
the study. Data was collected from both primary with the help of questionnaires designed using
likert scales and secondary data got from textbooks, internet, journals and newspaper articles.
The study revealed that credit policies exist in Popular Bank but there was management laxity to
effectively implement them and this has negatively impacted on Popular Bank's loan recovery
between the periods "2008-20 IO" where the default rate was steadily increasing. It is therefore this
steady rise that necessitates the investigation of its probable cause.
Besides this, there exists a strong positive relationship of 0.722 (using correlation SPSS) between
credit policy and loan recovery. This implies that the effectiveness of credit policy leads to higher
loan recovery levels.
The researcher recomm-ends that the management should review the implementation of credit
policies, interest rate should be reduced from 36% per year to at least 24% per year just like other
lending institutions, and payback period must be extended to at least beyond one year.
Popular Bank should train its clients on how to beneficially use the borrowed money. In addition to
this, it should listen to client's grievances in order to efficiently serve their interests and so achieve
its target goals. The above measures if taken into consideration will strengthen the effectiveness of credit policy towards achieving the set objectives and still enhance loan recovery.
ROSE, N (2021). Credit Policy Of Finance Institution And Performance Of Selected Small And Medium Enterprises (Smes): A Case Study Of Popular Bank, Ny Amirambo Branch, Rwanda. Afribary. Retrieved from https://afribary.com/works/credit-policy-of-finance-institution-and-performance-of-selected-small-and-medium-enterprises-smes-a-case-study-of-popular-bank-ny-amirambo-branch-rwanda
ROSE, NYIRAMAHIRWE "Credit Policy Of Finance Institution And Performance Of Selected Small And Medium Enterprises (Smes): A Case Study Of Popular Bank, Ny Amirambo Branch, Rwanda" Afribary. Afribary, 11 Jun. 2021, https://afribary.com/works/credit-policy-of-finance-institution-and-performance-of-selected-small-and-medium-enterprises-smes-a-case-study-of-popular-bank-ny-amirambo-branch-rwanda. Accessed 01 Dec. 2021.
ROSE, NYIRAMAHIRWE . "Credit Policy Of Finance Institution And Performance Of Selected Small And Medium Enterprises (Smes): A Case Study Of Popular Bank, Ny Amirambo Branch, Rwanda". Afribary, Afribary, 11 Jun. 2021. Web. 01 Dec. 2021. < https://afribary.com/works/credit-policy-of-finance-institution-and-performance-of-selected-small-and-medium-enterprises-smes-a-case-study-of-popular-bank-ny-amirambo-branch-rwanda >.
ROSE, NYIRAMAHIRWE . "Credit Policy Of Finance Institution And Performance Of Selected Small And Medium Enterprises (Smes): A Case Study Of Popular Bank, Ny Amirambo Branch, Rwanda" Afribary (2021). Accessed December 01, 2021. https://afribary.com/works/credit-policy-of-finance-institution-and-performance-of-selected-small-and-medium-enterprises-smes-a-case-study-of-popular-bank-ny-amirambo-branch-rwanda