| Abstract: | Financial institutions now place a greater emphasis on credit risk management, especially in
light of how closely the financial services sector is linked to unstable business conditions. The
discontent in the banking industry emphasizes the value of effective risk management
procedures. By examining its rules or guidelines, credit risk management instruments, credit
grant process elements, credit risk management activities carried out, risk management
reporting system, and credit risk management process, this study seeks to evaluate Berhan Bank
S.C.'s credit risk management practices. The researcher utilized selective (judgmental) sampling.
Both qualitative and quantitative research techniques were used. In this study, both qualitative
and quantitative data were employed. Both primary and secondary sources of data were used in
the investigation. Most often, questionnaires are employed. In the instance of the secondary
source of data, the bank's quarterly and yearly reports were scrutinized. The financial
performance of the bank is covered in these reports. The study also used several theses, NBE
directives, journal working papers, and other sources as reference materials. 74 employees who
are involved in risk management and loan decisions provided information. The researcher
employed analytical techniques like frequency, percentage mean, and standard deviation to
characterize the data. The key findings were that portfolio management is an important credit
risk management tactic and that the bank implemented credit risk management tools and
procedures to reduce the amount of loan default, which is a significant contributor to bank
failure. Following the investigation, it was determined that Berhan Bank S.C. According to the
inquiry, there are management problems at Berhan Bank S.C. with monitoring and regulating,
diversification, and non-performing loans (NPL). It was therefore suggested that the bank
increase its use of all tools for credit risk management, portfolio management, diversification,
credit administration, monitoring & controlling, and managing loan problems, as well as
training clients on how to use loans and training staff members who directly deal with credit
processes. |
