Credit Risk Management and Financial Performance of Brac Microfinance Kibuli, Makindye Division Kampala Uganda

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TABLE OF CONTENTS

DECLARATION

APPROVAL

DEDICATION iii

ACKNOWLEDGEMENT iv

ABSTRACT viii

CHAPTER ONE 1

INTRODUCTION 1

1.0 Introduction 1

1.1.1 Background to the Study 1

1.1.1 Historical Perspective 1

1.1.2 Theoretical Perspective 3

1.1.3 Conceptual Perspective 3

1.1.4 Contextual Perspective 4

1.2 Problem Statement 5

1.3 Purpose of the study 5

1.4 Specific Research objectives 5

1.5 Research Questions 6

1.6 Research Hypothesis 6

1.7 Scope of the study 6

1.7.1 Subject Scope 6

1.7.2 Geographical Scope 6

1.8 Significance of the study 7

1.9 Operational Definitions of key terms 7

CHAPTER TWO 8

LITERATURE REVIEW 8

2.1 Introduction 8

2.lTheoretical Review 8

2.2 Conceptual Review 9

2.3 Empirical studies 10

V

2.3.1 Relationship between risk identifications and financial performance 10

2.3.2 Relationship between credit risk monitoring and financial performance 11

2.3.3 Relationship between risk analysis and financial performance 14

2.4 Related studies 15

2.5 Research Gaps 19

CHAPTER THREE 20

METHODOLOGY 20

3.0 Introduction 20

3.1 Research design 20

3.2 Study Population 20

3.3.1 Sample Size 20

3.3.2 Sampling techniques 21

3.4 Sources of data 21

3.4.1 Primary Data 22

3.4.2 Secondary Data 22

3.5 Data collection tools 22

3.5.1 Questionnaire 22

3.6 Data collection Procedure 22

3.7 Data Processing and Analysis 23

3.7.1 Data processing 23

3.7.2 Data analysis and presentation 23

3.7 Ethical considerations 24

3.8 Limitations of the study and counteraction measures 24

CHAPTER FOUR 26

DATA PRESENTATION, INTERPRETATION AND ANALYSIS 26

4.0 Introduction 26

4.1 Demographic information 26

4.1.2 Academic Qualifications of respondents 27

4.1.3 Age distribution of respondents 27

4.1.4 Time of service 28

vi

4.2 Credit risk management Brac Microfinance institutions in Uganda 28

4.3 Financial performance of Brac microfinance Limited 31

4.4 Objective one; Relationship between credit risk identification and the financial performance

of Brac Microfinance Uganda 33

4.5 Objective two; Relationship between credit risk monitoring and the financial performance of

Brac Microfinance Uganda 34

4.6 Objective three; Relationship between credit risk analysis and the financial performance of

Brac Microfinance Uganda 35

CHAPTER FIVE 36

DISCUSSIONS, CONLUSIONS AND RECOMMENDATIONS 36

5.0 Introduction 36

5.1 Discussion of findings 36

5.1.1 Relationship credit risk identification and the financial performance of Brac microfinance

Uganda 36

5.1.2 Relationship between credit risk monitoring on the financial performance of Brac

Microfinance 37

5.1.3 Relationship between credit risk analysis on the financial performance of Brac

Microfinance 37

5.2 Conclusions 38

5.3 Recommendations 38

5.4 Areas of further study 39

Appendix i: Research Questionnaire 45

Appendix ii: Time frame for the study 49

Appendix iii: Research Budget 50

ABSTRACT The study concerning the findings on the effect of credit risk management on the financial performance of Brac Microfinance. The study objectives were to investigate the relationship credit risk identification on the financial performance, to establish the relationship between credit risk monitoring and assess the relationship credit risk analysis on the financial performance of equity bank Uganda. The study was conducted from 30 respondents who were the employees ofBrac Microfinance. The data was collected using closed ended questionnaires were data, the research was entirely a descriptive research design based on quantitative research. The studyfindings reveal that credit risk management had a significant contribution to financial performance. The study conclude that credit risk identification was low though with a significant effect on financial peiformance, the study conclude that risk identification need enhancement through improving forecasting improvements. The study on the second objective the study conclude that the credit risk analysis contribute sigrnficantly to financial performance of the banks, the study conclude that risk analysis has to be improved in the mechanisms to enhance financial performance and operations. On the third objective the study conclude that credit risk monitoring can generate financial performance of the bank, whereas the financial performance ofthe bank seemed relevant and sign~ficant, credit risk management is low that call for an enhancement ofthe staffand the instruments used in improving credit risk management to generate financial petformance. The study recommends that bank’s top management and board ofdirectors must base their investment decisions primarily on risk management. They must use detailed information on integrated risk management at their company and weigh these risks against those of new investments. There is need for improving the financial performance ofthe commercial bank in the extent that customer base can be improved There is needfor strong cost reduction by management through credit risk analysis so as to save on the finances lost through operations that are not effectively guided in work to improve financial soundness of the commercial bank.

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APA

Frontiers, E. & ABDALLAH, B (2022). Credit Risk Management and Financial Performance of Brac Microfinance Kibuli, Makindye Division Kampala Uganda. Afribary. Retrieved from https://afribary.com/works/credit-risk-management-and-financial-performance-of-brac-microfinance-kibuli-makindye-division-kampala-uganda-2

MLA 8th

Frontiers, Edu, and BIRUNGI ABDALLAH "Credit Risk Management and Financial Performance of Brac Microfinance Kibuli, Makindye Division Kampala Uganda" Afribary. Afribary, 17 Aug. 2022, https://afribary.com/works/credit-risk-management-and-financial-performance-of-brac-microfinance-kibuli-makindye-division-kampala-uganda-2. Accessed 01 Oct. 2022.

MLA7

Frontiers, Edu, and BIRUNGI ABDALLAH . "Credit Risk Management and Financial Performance of Brac Microfinance Kibuli, Makindye Division Kampala Uganda". Afribary, Afribary, 17 Aug. 2022. Web. 01 Oct. 2022. < https://afribary.com/works/credit-risk-management-and-financial-performance-of-brac-microfinance-kibuli-makindye-division-kampala-uganda-2 >.

Chicago

Frontiers, Edu and ABDALLAH, BIRUNGI . "Credit Risk Management and Financial Performance of Brac Microfinance Kibuli, Makindye Division Kampala Uganda" Afribary (2022). Accessed October 01, 2022. https://afribary.com/works/credit-risk-management-and-financial-performance-of-brac-microfinance-kibuli-makindye-division-kampala-uganda-2