ASSESSMENT OF CREDIT MANAGEMENT PRACTICE AT DASHEN BANK

Abstract

The objective of this study was to assess the practice of credit management at Dashen bank. The study was conducted using descriptive research method both primary and secondary sources of data was used. It also used mixed research approach which is both quantitative and qualitative approach. The research was used structured self-administered questionnaire as data collection tool. The study populations of 134 were from Dashen Bank employees who are directly and indirectly involved in credit processing and administering units on the head quarter. Purposive sampling technique was utilized to select 78 participants of the study & (100% response rate) were responded to the questionnaires. The data collected via questionnaires were analyzed with descriptive statistics using statistical package for social science (SPSS-20). Respondents reported that the process for a given loan application takes an average of 17 days. Only 42.3% study participants reported that they agree about the procedure followed for loan approval by the bank is satisfactory but the rest of them disagree about this. 9.0% of the respondents replied that the bank used all mechanisms in order to collect the loan. The bank faced problems with credit management practice including non-performing loan at various levels and identified the causes of NPL. The researcher concluded that the bank used different credit management tools, techniques and assessment models to manage their credit risk to reduce the amount of loan default. It is recommended that the Bank should have credit management policy and strategy that incorporate the ideas of the clients and employees to become more competitive in the banking industry and meet its vision.