The use of financial statements information in the lending decision process in Tanzania: the cases of CRDB, NBC and NMB Bank
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Date
2009
Authors
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Publisher
University of Dar es Salaam
Abstract
The research aimed at assessing the use of financial statement information in the lending decision process in Tanzania. It analyzed the key information required by banks in their lending decisions and assessed the quality of information contained in financial statements that result into favorable bank lending. The sample was selected randomly from loan officers of the three financial institutions which where NBC, NMB and CRDB. Total respondents were 88 and the tools used for collecting data were questionnaires and interview. The data were then processed and analyzed through SPSS and presented in form of tables, frequencies and percentages. The findings of the study revealed that the key information required by banks in the lending decisions were balance sheet, income statement, business plan and budget for next years. The study further discovered that there are other information required by banks in their lending decision. These include stock and debtors list, residential assurance of the borrower, availability of collateral and integrity of the borrower. The conclusion reached is that, the quality of the financial statements information is something very crucial in lending decision process as it influences the lending decision. Finally, the study recommends further studies to examine the use of financial statements information in non banking financial institutions in Tanzania and to establish a relationship between auditor’s attestation of the financial statements and the degree of reliability of the same in relation to adequate repayment of the loan.
Description
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class Mark (THS EAF HF5681.B2M63)
Keywords
Financial statement, Loans
Citation
Mohamed, S (2009) The use of financial statements information in the lending decision process in Tanzania: the cases of CRDB, NBC and NMB Bank, Master dissertation, University of Dar es Salaam