The Credit Risk Management and Performance of Commercial Bank. Case Study: Nile Bank

TABLE OF CONTENTS

TABLE OF CONTENTS ..................................................................................................... i

DECLARATION ............................................................................................................... iii

DEDICATION .................................................................................................................... V

ACKNOWLEDGEMENT .................................................................................................. vi

LIST OF TABLES AND FIGURES ................................................................................. vii

LIST OF ABBREVIATIONS ......................................................................................... viii

ABSTRACT ....................................................................................................................... ix

CHAPTER ONE .................................................................................................................. !

INTRODUCTION ............................................................................................................... 1

1.0Background ..................................................................................................................... 3

1.1 Statement of the problem ............................................................................................... 3

1.2 Objectives of the study .................................................................................................. 4

1.3 Significance of the study ............................................................................................... 4

1.4 Scope of the study ......................................................................................................... 4

1.5 Research question ......................................................................................................... .4

CHAPTER TWO ................................................................................................................. 6

LITERATURE REVIEW .................................................................................................... 6

2.0 Introduction ................................................................................................................... 6

2.1 Credit risk ...................................................................................................................... 6

2.2 Credit risk in loans ......................................................................................................... 6

2.3 Credit standards ............................................................................................................. 7

2.4 Information lenders look in determining credit worthiness (Kapoor et al, 2001) ......... 8

2.5 Credit terms ................................................................................................................... 9

2.6 Collection effotis and procedures .................................................................................. 9

2. 7 Management of credit transition processes ................................................................... 9

2.8 Management of credit transaction process .................................................................. 10

2.8.2 Evaluation ................................................................................................................. 10

2.8.3 Negotiations .............................................................................................................. 10

2.8.4 Approval ................................................................................................................... 10

2.8.5 Documentation ......................................................................................................... 11

2.8.6Disbursement ............................................................................................................. 11

2.9 Perfo1mance measures ................................................................................................. I I

2.1 O Indicators of good performance ................................................................................. 12

2.11 Conclusion ................................................................................................................. 12

CHAPTER THREE ........................................................................................................... 13

3. I Introduction ................................................................................................................. 13

3 .2 Research design ........................................................................................................... 13

3.3 Sampling design .......................................................................................................... 13

3.3.1 Study population ....................................................................................................... 13

3 .4 Data type and Sources ................................................................................................. 13

3.5 Data collection instruments/ methods ........................................................................ 13

3.5.1 Questionnaires .......................................................................................................... 13

3.5.2 Interviews ................................................................................................................. 14

3.5.3 Documentary review ................................................................................................ 14

3.6 Data processing analysis .............................................................................................. 14

CHAPTER FOUR ............................................................................................................. 15

PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS ............................ 15

4.0 Introduction ................................................................................................................. 15

4.1 General Findings ......................................................................................................... 15

4.2 Demographic characteristics ....................................................................................... 15

Table! : sex of respondents ............................................................................................... 15

Table2: Main banking services .......................................................................................... 16

Table 3: Sector of the economy where customers comes from ......................................... 16

Table 5: Effectiveness of risk management.. ..................................................................... 17

Table 4: Credit standards for Nile Bank ............................................................................ 17

4.3. Collection procedures ................................................................................................. 18

Table 5: Collection Designed ............................................................................................ 18

Table 6: Collection ofloans .............................................................................................. 18

4.4 Effectiveness of credit terms ....................................................................................... 19

Table 6: Factor of high credit risk in Nile Bank ................................................................ 19