| Abstract: | Credit risk management has become an important topic for financial institution; especially due to
the fact the business sector of financial service is associated with situations of uncertainty. The
turmoil of the monetary enterprise emphasis the significance of effective risk management
procedures. The aim methodology, major findings, conclusion and recommendation of this look at
the study is to examine the practice of credit risk management in Abay bank. In order cope with
this goal, the examine focused credit and loan department employees who presently work at head
office of the bank and collected primary data. The primary data were collected through
questionnaires. The study distributed 81 questionnaires, from which 65 questionnaires have been
successfully filled and returned. The collected data was analyzed the use of descriptive statistical
tools. The finding showed that there is credit risk policy and procedures, credit risk strategy are
effectively communicated through the organization and practical loan processing and appraisal
activities of at the bank. Furthermore, the study showed that Abay bank uses appropriate internal
risk scoring system, employees scientific pricing, credit limit established by the bank, adequate
measure put in place to recover non-performing loans, and training of employees on credit risk
management functions. But results also indicated there is a room for approving with reference to
monitoring activities undertaken at Abay bank. In line with findings of the study, it becomes
advised to the financial institution to enhance its monitoring system through regulatory analyzing
the business of customers after granting credits. |
