The effectiveness of credit risk management in banking institutions: the case of CRDB Bank Mwanza region branches.

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University of Dar es Salaam
The major objective of this study was to examine the effectiveness of credit risk management in banking institutions. The study concentrated on exploring the core credit risk management strategies and how employees consider them to be effective. Data were collected by administration of questionnaire with 54 respondents from Mwanza region branches of CRDB bank. Most of the data were analyzed by using the SPSS and data are mostly presented by using frequency tables with descriptive statistics. The study found that the process of credit risk management is continuous and dynamic over the whole credit life cycle stages. The strategies include collection of information to understand client credit history, character, verify client business and collateral information. The other strategies are related to control over collaterals and securities, day to day internal communication of delinquencies, monitoring portfolio status daily, reminders, and confiscation and sale of collaterals if the other measures fail. Most of the strategies were found effective in terms of attaining information and reminding clients on their contractual obligations. However, there were some identifiable weaknesses where by the bank failed to verify the information with authentic sources. Equally, communication of delinquency was found to be limited to credit staff and management while excludes other resourceful stakeholders like the central and local government authorities, the other banks and the local area chiefs. The study recommends for alternative research, alternative methodology and requires CRDB to design a more responsive and cooperative credit risk control policies which encourage the clients to feel as honoured and responsible stakeholders. This will diminish chances for defaults.
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HG3751.T34W36)
Credit, Management, Credit risk management, Banking institutions, Cooperative and Rural Development Bank (CRDB), Mwanza, Tanzania
Wanzagi, B. E. (2011). The effectiveness of credit risk management in banking institutions: the case of CRDB Bank Mwanza region branches. Master dissertation, University of Dar es Salaam.