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Credit risk management techniques and loan portfolio quality of nigerian commercial banks

 Department: Business Administration and Management  
 By: usericon Donchika  

 Project ID: 2336
   Rating:  (5.0) votes: 1
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Commercial banks engage primarily in the business of intermediation, which is, mobilizing funds from surplus units of the economy and lending same to the deficit units.  In rendering these services, a large percentage of the loans granted are not repaid or serviced as at when due, leading to bank distress. Defective credit risk management practices, laxity of the supervisory and regulatory authorities have been identified as the problems. This study examined the effect of the credit risk management techniques on the loan portfolio quality of Nigerian commercial banks. The study employed ex-post facto and cross sectional designs. Target population comprised 3097 credit risk managers drawn from 21 commercial banks in Nigeria and a sample of 425 was selected using the stratified random sampling technique. A structured questionnaire was validated for the study.  Secondary data were also obtained from the audited accounts of the selected banks over the period covered by the study (2006 - 2015). The Cronbach’s alpha coefficient for the construct ranged between 0.782 and 0.941. The response rate from 425 copies of the questionnaire administered was 95.5%. The data collected were analyzed using descriptive and inferential (simple and multiple regression) statistics. Findings revealed that credit risk management techniques had significant effects on loan portfolio quality (R2  0.675, p0.05), credit risk environment had significant effect on loan portfolio quality (R2  0.577, p0.05), credit analysis had positive significant influence on loan portfolio quality (R2  0.656, p0.05), credit administration had significant effect on loan portfolio quality (R2  0.638, p0.05), credit control had negative and significant relationship with loan portfolio quality (r  -.615, p0.05), supervisory and regulatory roles had significant effect on loan portfolio quality of Nigerian commercial banks (R2  0.487, p0.05). ...
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