ASSESSMENT OF CREDIT MANAGEMENT PRACTICE (In the case of Awash International Bank share company)

Abstract

Banking is a business practice, or profession almost as old as the very existence of man. It has sprouted from the very primitive Stone Age banking, through the Victorian age to the technology driven Google-age banking ,encompassing automotive teller machines(ATMs) credit and debit card, correspondent and internet banking (Wikipedia,2008). While financial institutions have found difficulties over the years for a multitude of reasons, the major cause of serious banking problems is the practice and management related to credit, as a result of this the study aimed at the credit management practice of Awash International Bank Share Company. The Study is organized with five chapters. The First chapter introduces the background of the study, the research objectives and questions, significance of the study, scope of the study and organization of the paper. The Second chapter presents theoretical and empirical review of the related literatures. The Third chapter deals with methodology of the study. The Fourth chapter is concerned with the analysis, results and discussions as well the last chapter of the study chapter five presents the limitation of the study conclusion and recommendations drawn from findings of the data in addition with implications for further research. The objective of the study specifically raise issues like loan performing ground of the bank, the impact of loan procedure to customers and the measures taken to control non-performing loans and other related issues. The study use Questionnaire as primary data source and manuals and procedures and publications of the bank as well NBE as secondary data source. Data to do the analysis is obtained from bank employees for the analysis the study used SPSS 2010(version 20.1), as a result the study concluded that the bank have more dependable on its income from loan interest and the bank has a good implementation of NBE directives as well the action taken to improve repayments of clients is give better chance to customers, but the follow up on timely repayment of loan is weak and the knowledge of loan clients need improvement. Thus, the researcher recommends that the repayment of loan need strict follow up and give emphasis on creating better awareness for the loan clients of the bank.