| Abstract: | Credit risk management has become an important topic for financial institutes, especially since the business sector of financial services is related to conditions of uncertainty. The turmoil of the financial industry emphasizes the importance of effective risk management procedures. The purpose of this research is to assess the credit risk management practice of Berhan International Bank S.C through examining the policies or guidelines, the tools of credit risk management, the factors of credit granting process, performed activities of credit risk management, risk management reporting system and credit risk management process. The researcher applied purposive (judgmental) sampling technique. Qualitative and quantitative (mixed) research method was used. The type of data used for the study includes qualitative and quantitative data. Primary and secondary sources of data were used for the study. The main primary source of data is through the use of questionnaires. In the case of the secondary source of data, annual and quarterly reports of the bank were analyzed. These reports contain financial performance of the bank. Besides, as reference material NBE directives, journals working paper as well as different thesis were used in the study. Data collected from 58 employees who are involved in the lending decision and risk management. The researcher used descriptive tools of data analysis such as frequency and percentage. The major findings were the bank had credit risk management policy; the bank used credit risk management tools and techniques to reduce the amount of loan default which is a principal cause of bank failure and collateral is used as a primary technique of credit risk management. The study concluded that Berhan International Bank S.C management problem in non-performing Loans (NPL), credit portfolio concentration & monitoring and controlling. Thus, it was recommended BrIB needs to strength applying the tools of credit risk management, portfolio management, training of customers on loan usage, credit administration, monitoring & controlling and managing problem loans and control. |
