MJAMR

Credit Management And It’s Impact On Financial Performance Of An Organisation, A Case Study Of Centenary Bank Gulu Branch

Nakanwagi Hildah, Kabanda Richard


Abstract

The study examined the Credit Management and Performance of an Organization: A Case Study of Centenary Bank Gulu Branch. The study aimed at establishing the effect of credit appraisal practices on loan portfolio performance in Centenary Bank, examining the effect of credit monitoring practices on loan portfolio performance in Centenary Bank and analyzing the effect of credit recovery procedures on loan portfolio performance in centenary Bank. In this study, a case study research design was adopted, stratified random sampling and purposive sampling techniques were used to select a sample of 92 employees from a population of 120 respondents. Out of 82 questionnaires administered only 68 respondents returned questionnaires making a response rate of 83% and out of 10 interviewees targeted only 8 interviewees responded making a response rate of 80%. The data was collected using questionnaires and interviews and analysis was done using regression analysis, and correlation coefficients for the quantitative findings. Findings revealed that credit appraisal practices significantly and positively affect loan portfolio performance in Centenary Bank (adjusted R2 =0.727*, pvalue = 0.000), secondly findings revealed that credit monitoring practices significantly and positively affect loan portfolio performance in Centenary Bank (Adjusted R2 = 0.501*, p-value = 0.000) and thirdly, the findings revealed that credit recovery procedures significantly and positively affect loan portfolio performance in Centenary Bank (adjusted R2 =0.780*, p value= 0.000). For qualitative findings, data was coded, correctly synthesized and patterns generated which were used to put qualitative data into context and findings were interpreted in line with the research objectives which enabled the assessment of literature reviews to reach a conclusion. The study concluded that all outstanding loans in the loan portfolio were continuously reviewed & closely monitored. Centenary bank had ensured that reviews were done on the collection policies to improve credit management. The study further recommended that Banks should value all information about the customers with a high level when doing their credit assessment because the information they may consider to be less important could be the cause of a failure in their decisions or, it could be the ware from which the customer’s default arises.

Keywords

Loan portfolio performance credit recovery Procedures Commercial Banks credit appraisal Practices
Metropolitan Journal of Academic Multidisciplinary Research

Cite This Article

Nakanwagi Hildah & Kabanda Richard (2024). Credit Management And It’s Impact On Financial Performance Of An Organisation, A Case Study Of Centenary Bank Gulu Branch. Metropolitan Journal of Academic Multidisciplinary Research, 3(5). https://journals.miu.ac.ug/pages/article.php?article_id=1452

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