The Impact of Credit Policy and Loan Recovery in Commercial Banks: A Case Study of Centenary Bank

TABLE OF CONTENTS

DEDICATION ....................................................................................................................... I

DECLARATION ................................................................................................................... 2

APPROVAL .......................................................................................................................... 3

ACKNOWLEDGEMENT ..................................................................................................... 4

ABSTRACT .......................................................................................................................... 5

TABLE OF CONTENTS ....................................................................................................... 6

CHAPTER ONE .................................................................................................................... 9

1.0 Introduction .................................................................................................................... 11

1.1 Background of the study ................................................................................................ I I

1.2 Statement of the problem ................................................................................................ 12

1.3 Purpose of the study ....................................................................................................... 13

1.4 Objectives of the study ................................................................................................... 13

1.5 Research questions ......................................................................................................... 13

1.6 Scope of the Study ......................................................................................................... 13

1. 7 Significance of the study ................................................................................................ 13

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I

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1.8 CONCEPTUAL FRAME WORK ................................................................................. 14

1.8.1 The impact of Credit Policy and Loan recovery in Commercial Banks ........................ 14

CHAPTER TWO ............................................................................................................... 15

LITERATURE REVIEW ..................................................................................................... 15

2.0 Introduction .................................................................................................................... 15

2.1 Credit policy .................................................................................................................. 15

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2.1.1 Credit standards; ......................................................................................................... 16

2.1.2 Credit terms; ............................................................................................................... 17

2.1.3 Collection procedures according to Eugene(2016); ...................................................... 17

2.2 Loan Recovery ............................................................................................................... 17

2.2.1 Improved bank productivity and sustainability; ........................................................... 18

2.2.2 Tiinely repay1nents; ..................................................................................................... 18

2.2.3 Reduced loan defaults .................................................................................................. 18

2.3 The relationship between credit policy and loan recovery ............................................ 20

METHODOLOGY .............................................................................................................. 22

3.0 Introduction .................................................................................................................... 22

3.1 Research design ............................................................................................................. 22

3.2 San1pling designed ......................................................................................................... 22

3.2.1 Targeting population ................................................................................................... 22

3.2.2 Sa1nple size ................................................................................................................. 22

3.2.3 Sa1npling 1nethods ....................................................................................................... 22

3.3 Data sources ................................................................................................................... 23

3.4 Methods instruments of data collection .......................................................................... 23

3.5 Data processing, Analysis and Presentation .................................................................... 23

CHAPTER FOUR ................................................................................................................ 24

PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS ................................. 24

4.0 Introduction .................................................................................................................... 24

4.1 Demographic characteristics ....................................................................................... 24

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4.1.2 Age of respondents ...................................................................................................... 24

4.13 Marital status of respondents .................................................................................... 25

4.1.4 Level of Education of respondents ............................................................................... 25

4.1.5 Types of loans offered by Centenary Bank .................................................................. 26

4.1.6 Sectors Centenary Bank extend loans to ............................................................... 26

4.2 Credit Policy ............................................................................................................... 26

4.4 Findings on the relationship between credit policy and loan recovery in Centenary bank 37

CHAPTER FIVE ................................................................................................................. 38

SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS ..................................... 38

5.0 Introduction .................................................................................................................. 38

5 .1 Su111n1aries of findings ................................................................................................. 38

5.1.1 Procedures followed in loan recovery by Centenary Bank ........................................ 38

5.1.2 Factors that influence loan recovery in Centenary Bank ............................................ 38

5.1.3 Relationship between credit policy and loan recovery ................................................ 38

Conclusions ......................................................................................................................... 39

5.2 RECOMMANDA TIO NS ........................................................................................... 39

Areas for further Research ................................................................................................... 39

REFERENCES .................................................................................................................... 39