Browsing by Author "Makwi, Xavery"

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    Access of economically active customers to unsecured or partly secured credits from Banks in Tanzania: The case of CRDB Bank Limited
    (University of Dar es Salaam, 2007) Makwi, Xavery
    The study attempts to look for and examine the effectiveness of alternative non-asset based credit risk mitigants. The literature suggest that collateral, through not the first way out in lending decisions, is the second dependable way out. Its importance is given weight by banks’ supervisors to the extent of having exposure limits based on collateral adequacy (BOT,2001). The study was prompted by the fact that despite having the collateral requirement, banks cannot fully recover the loans through sale of mortgaged assets in case of default (Mlabwa, 2004). The study was conducted using CRDB Bank Limited as a case study utilizing secondary data collected from customers’ credit files and database for court cases by use of a secondary data collection form. Questionnaires were administered to bank lending staff, customers and land as well as company registry staff for collection of primary data. The data were analyzed through descriptive and inferential statistics. The main finding of the study is that credits can perform better regardless of the level of collateral adequacy provided that sound lending procedures are adhered to at all levels of credit management during the credit. Banks need to enhance credit processing, supervision and monitoring and ensuring a good customer-banking relationship. In order to enhance access to credit for small-scale customers, perceived as high risky, the study recommends for banks to have dedicated units to cater for the needs of that segment.