ASSESSMENT OF CREDIT MANAGEMENT PRACTICE : THE CASE OF WEGAGEN BANK S.C.

Abstract

This study intends to assess credit management practice of Wegagen Bank s.c.based on four basic dimensions namely the practice of the bank in managing its loaning activity and alignment with the National Bank of Ethiopia requirements, non-performing loan management, current credit control and its credit risk management practice. The research is designed as a case study on a single bank and a survey method was employed. Sources of both primary and secondary data were used. Questionnaire was used as a main instrument to collect primary data while the secondary data is collected from the bank’s unpublished provision reports (2012-2018), directives, credit policy and procedure of the bank. Based on the nature of the study the research design is descriptive and the methodology used for the study is population census for bank staffs. To analyze the data collected a quantitative research method were used. Hence, the nature of the Study is descriptive. Data was analyzed using SPSS 20.0 version and results are described based on statistical mean and standard deviation values. As per findings of the study There is poor analysis cash flow statement of borrowers before approval of the loan repayment period and a proper assessment of credit risk is required in the analysis process and based on this findings recommendations are given that the management of Wegagen bank must come up with a credit risk management policy that is devised towards the granting of current loans whiles cutting down drastically the approval of loans which has the potency of becoming doubtful or loss in the long run.