Intervention strategies that can be utilised to enhance CBZ bank loan book performance

INTRODUCTION

1.0 INTRODUCTION 1

1.1 BACKGROUND OF THE STUDY 1

1.2 STATEMENT OF THE PROBLEM 3.

1.3 RESEARCH OBJECTIVES. 4

1.4 RESEARCH QUESTIONS 4

1.5 SIGNIFICANCE OF STUDY 4

1.5.1 Practical Significance 4

1.5.2 Theoretical Significance 5

1.6 RESEARCH ASSUMPTIONS 5

1.7 DELIMITATION (SCOPE) OF STUDY 5

1.8 LIMITATIONS 5

1.9 DEFINATION OF KEY TERMS 6

1.10 CHAPTER SUMMARY 7

CHAPTER TWO

LITERATURE REVIEW

2.0. Introduction 8

2.1 An Overview of Loan Performance 8

2.1.1 Determinants of Loan Performance 8

2.1.1.1 Interest Rates 8

2.1.1.2 Liquidity 9

2.1.1.3 Loan Size 9

2.2 The concept of credit risk management in bank lending 10

2.2.1 Credit Risk Management 10

2.2.2 Credit Terms 11

2.2.3 Client Appraisal 12

2.2.4 The 5 C’s Model of Client Appraisal 13

2.2.5 Credit Risks Controls 14

2.3 Theoretical Review 15

2.3.1 Commercial Loan Theory 15

2.3.2 Transactions Costs Theory 16

2.3.4 Information Theory 17

2.4.Intervention Strategies to Enhance Loan Performance 17

2.4.1 Intervention Strategies to Enhance Loan Performance ` 17

2.4.2 Effect Of Credit Terms On Loan Performance 19

2.4.3Effect of Client Appraisal Model on Loan Performance 20

2.4.4Effects Credit Risk Controls on Loan Performance 23

2.5 Review Of Empirical Literature 25

2.5.1 Credit Terms 25

2.5.2. Client Appraisal 26

2.5.3 Credit Risk Controls 26

2.6 Chapter Summary 27

CHAPTER 3

RESERARCH METHODOLOGY

3.0 Introduction 28

3.1 Research Design 28

3.1.2 Explanatory Research Design 28

3.1.2.1 Justification of the Explanatory Research Design 29

3.2 Target Population 29

3.3 Sampling 30

3.3.1 Stratified Random Sampling 30

3.3.2 Justification of Stratified Random Sampling 31

3.3.3 Simple Random Sampling 31

3.3.4 Justification of Simple Random Sampling 32

3.3.5 Sampling Size 32

3.4 Sources of Data 32

3.4.1 Primary Data 32

3.4.2 Secondary Data. 33

3.5 Research Instruments 33

3.5.1 Self-Administered Questionnaire 33

3.5.2 Justification of self-Administered questionnaire 34

3.5.3 Personal Interviews 35

3.6.3 Justification of Personal Interviews 35

3.6 Validity and Reliability 35

3.6.1 Reliability 35

3.6.2 Validity 35

3.6.3 Pilot Study 36

3.7 Ethical Considerations 36

3.8 Data Presentation 37

3.8.1 Data Analysis Techniques 37

3.9 Chapter Summary 37

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.0 INTRODUCTION 39

4.1 DATA PRESENTATION AND ANALYSIS 39

4.1.1 Response rate 39

4.1.2Highest level of education 40

4.1.3 Work Experience 41

4.2 DESCRIPTIVE STATISTICS FINDINGS 42

4.2.1 The implementation of credit management techniques by CBZ 42

4.2.2 The Effects of Credit Terms on CBZ'S Loan Book Performance 43

4.2.3 Client Appraisal and Loan book Performance 44

4.2.4 Credit Risk controls And Loan Book Performance 45

4.3 Pearson correlations of the variables 46

4.3.1 Rule of thumb about the strength of correlation coefficients 47

4.3.2 Credit terms and loan book performance at CBZ 47

4.3.3 Client appraisal and loan book performance 48

4.3.4 Credit Risks Controls And Loan Book Performance 49

4.4 THE MODEL SUMMARY OF THE STUDY 49

4.5 CHAPTER SUMMARY 50

CHAPTER V

SUMMARY OF MAJOR FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.0 INTRODUCTION 51

5.1 SUMMARY OF MAJOR FINDINGS 51

5.1.1 The Effects of Credit Terms on CBZ'S Loan Book Performance 51

5.1.2 The Relationship between Client Appraisal and Loan Book Performance 51

5.1.3 The Effects of Credit Risk controls and Loan Book Performance 52

5.2 CONCLUSION 52

5.2.1 The Effects of Credit Terms on CBZ'S Loan Book Performance 52

5.2.2 The Relationship between Client Appraisal and Loan Book Performance 53

5.2.3 The Effects of Credit Risks on Loan Book Performance 53

5.3 Recommendations 53

5.3.1 The Effects of Credit Terms on Loan Book Performance 53

5.3.2 The Relationship between Client Appraisal and Loan Book Performance 54

5.3.3 The Effects of Credit Risk controls on Loan Book Performance 54

5.4 Areas for further study 55

REFERENCES 56

APPENDICES 59