| Abstract: | This study was aimed at assessing the effectiveness of credit management systems on loan
performance of microfinance institutions a Case Study of Addis credit and saving S.C. and is an
attempt to indicate the importance of credit management in financial institutions such as
micro finances and others. Thus, the rationale behind for undertaking this study is to deeply
investigate the causes of credit management practical problems and to suggest the possible
solutions that enable the micro finances to run its operation in a safe way as credit is known to
be the main stay of all micro finances. The main objective of the study is to evaluate the
performance of credit management practical problem of Addis credit and saving S.C. For the
purpose of the study both primary and secondary data are used. Primary data is collected
using structured questionnaires. The secondary data is collected from annual reports,
directives, and bulletins of the micro finance. Descriptive statistical tools are used in
analyzing the data collected. Hence, the nature of the Study is descriptive. Finally, based on the
findings possible recommendations are given. These include the issues of rising loan clients
complaint on the micro finance regarding the valuing of properties offered for collateral,
lengthy of loan processing, amount of loan processed and approved, Frequent follow-up and
supervision, loan period, giving them a discount, Increasing the penalty rate and discretionary
limits affecting the performance of credit management |
