Abstract:
The general objective of the study was to assess the credit risk management practices in
financial institutions. Along this general objective, there were some specific purposes to
help achieve the overall goal of the study. They include; examining the credit
management practices of Ecobank Ghana Limited; to find out whether Ecobank Ghana
Limited complies with central bank regulations on credit management and to identify the
problems encountered in recovery of loans granted by Ecobank Ghana Limited. Based on
this both purposive and convenience sampling techniques were used to select from the
different categories of personnel. The same questionnaires were administered to the
management; senior staff and staff from the credit department (operations department)
were interviewed and transcribed as part of responses which were used in the analysis.
Other authors work relevant to the study were also considered and used. The main
findings of the study indicated that the bank sometimes faces some difficulties in loan
recovery, especially, clients whose repayments cannot be deducted at source. However,
some measures have been installed to mitigate such difficulties. They outlined some of
the problems as; the bank insures every loan that is granted to clients, the bank constantly
visits and befriends its clients, and taking of collateral security to secure the loan should
any default occur. The implementation of these debt recovery strategies has lead to the
improvement of loan recovery over the years. The study concludes that the bank should
always plan its credit programme in such a way that its interest rates will not be
fluctuating any time the central bank reviews its monetary policy, even though the policy
rate is beyond the control of the bank and again the credit procedures should be
innovative to accommodate varied loan applications since each loan may have different
requirements. It is, therefore, recommended that Management needs to ensure that the
bank works within the applicable framework set by the Bank of Ghana on deposit ratios
to help solve liquidity challenges, credit officers of the bank should be given more
training to enable them to properly evaluate the creditworthiness of clients before loans
are disbursed to them and the management of the bank should come up with a credit
management policy that is geared towards the granting of current loans while cutting
down drastically the approval of loans that have the potential of becoming doubtful or
bad in the long run.
Description:
A Dissertation Submitted to the Department of Accounting Studies Education,
University of Education, Winneba, Kumasi Campus in partial fulfillment of the
requirement for the degree of Masters of Business Administration (Accounting)
AUGUST, 2017