Credit Policy and Performance of Commercial Banks

TABLE OF CONTENT

r)J.:CLARATION ............................................................................................................................. i

APPROVAL ................................................................................................................................... ii

DEDICATION ............................................................................................................................... iii

ACKNOWLEDGEMENT ............................................................................................................. iv

ACRONYMS AND ABBREVIATIONS ....................................................................................... v

TABLE OF CONTENT ................................................................................................................. vi

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

f"HAPTER ONE ........................................................................................................................... 1

I'\! RODUCTION .......................................................................................................................... I

1.0 Introduction ............................................................................................................................... I

Background of the Study ................................................................................................................ I

1.2 Statement of the Probletn .......................................................................................................... 2

I.3 Purpose of the Study ................................................................................................................. 3

1.4 Objectives of the study .............................................................................................................. 3

1.5 Research question ..................................................................................................................... 3

1.6 Scope of Study .......................................................................................................................... 3

1. 7 Significance of the Study .......................................................................................................... 3

1 8 Lin1itation .................................................................................................................................. 4

C) I he Conceptual Frame Work ...................................................................................................... 5

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

LJ'fERA TURE REVIEW ............................................................................................................... 6

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

2.1 Credit Risk Model ..................................................................................................................... 6

2.2 Consumer Bank Credit. ............................................................................................................. 8

2.3 Importance of Credit ................................................................................................................. 9

2.4.1 Credit Standards and Analysis ............................................................................................. I 0

2.4.2 Credit Terms ........................................................................................................................ 11

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2.4.2.1 Determinants of credit terms in commercial banks .......................................................... 11

2.4.3 Collection policy .................................................................................................................. 12

2.5 Effects of credit on performance of commercial banks .......................................................... 12

2.6 Functions of Credit Management Policy in the Economy ...................................................... 13

2.6.1 Reducing the rate of defaulters ............................................................................................ 13

-, .-l 1 Data Source ........................................................................................................................... 17

3.4.2 Data Collection Methods and Instruments .......................................................................... 17

3.4.2.1 Interviewing Method ........................................................................................................ 17

3.4.2.2 Questionnaires Method ................................................................................................... 18

3.4.3 Data processing and Analysis ........................................................................................... 18

CHAPTER FOUR ....................................................................................................................... 19

PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS ....................................... 19

~ 0 introduction ............................................................................................................................. 19

1~10 data ................................................................................................................................... 19

-1-.l. l Respondents Designations ................................................................................................... 19

t 1.2 Respondents by Age, Sex and education level. ................................................................... 20

t 1.3 Length of service .................................................................................................................. 23

t2 Credit policy in Stanbic bank .................................................................................................. 25

vii

4.2.1 Credit policy review ............................................................................................................. 28

~.2.2 Credit evaluation in Stanbic banl