Effectiveness of financial institutions in credit management in Tanzania banking industry a case of CRDB-bank

The study aimed at assessing the effectiveness of financial institutions in credit management, while focusing on Commercial Banks (CBs). The study selected branches of CRDB-bank in which officers from credit departments were the key informants. Specifically the study identifying the criteria used by CBs in identifying credit worthy clients; identifying credit monitoring and repayment procedures used by CBs; determining the appropriateness of the credit policy used by CBs in achieving their goals; identifying measures have been used by CBs to turnaround non performing loans; and proposing strategic measures that will help to mitigate or reduce credit management challenges in CBs. Data were analyzed using descriptive and multiple regression analyses with the help of SPSS. Base on the findings indicated that for the CBs to have effective credit risk management they should put more emphasize on the assessment of type of the project to be financed, savings of the clients, size of the project to be financed and accountabilities of the clients, frequently visit businesses/projects of their credit-clients since frequently visitations could results to high repayment compliance. The study concluded that the methods and/or tools that were used by CBs could have moderate effectiveness in the management of credit business. The study recommended that in order for the CBs to increase their financial performance should improve their techniques for conducting client appraisals. The improved appraisal techniques will help them to be better in identifying credit worthiness of their clients. The study called for more similar studies to be conducted in other banks apart from CRDB-Bank