This study focused on the challenges of Credit Risk Management in Ghanaian Commercial
Banks with the searchlight on the operations of Barclays Bank Ghana (BBG), Ghana
Commercial Bank (GCB), Zenith Bank Ghana and Merchant Bank Ghana (MBG), all
operating in the Accra Business District. The study essentially had the objective of examining
the loan application appraisal processes of these banks as well as ascertaining the adequacy of
their loan monitoring mechanism.
In conducting the study, the researcher adopted the questionnaire technique as the research
instrument to solicit information from both customers and officials of the banks. Purposive
sampling technique was employed in selecting officials from the banks whose duties centered
on Credit Risk Management. Random sampling technique also helped the researcher in
selecting the sample size for the customers of the banks.
Findings made uncovered the fact that poor sales and exchange rate losses, product
substitutes due to trade liberalization and inability to enter into the foreign market and
account for a chuck of the loan default cases experienced by the banks. It is recommended,
among others, that the Government’s information on Venture Capital Trust fund should be
made more accessible to the SMEs sectors through official sponsored workshops whilst the
capacity and logistics of the Eximguaranty Limited are strengthened to alleviate the credit
requirement ‘headaches’ of SMEs. Conclusions drawn centered on the fact that some banks
minimize risk factors in credit management by entering into some covenants with borrowers’
under which certain figures and ratios are periodically sent to the banks electronically. Most
banks also dispatch their officials to monitor and evaluate the loan disbursement schedules
agreed with the customer to minimize bad debt associated with SMEs.
Table of Contents
- Chapter One: Introduction
- 1.1 Background of the Study
- 1.2 Statement of the Problem
- 1.3 Purpose and Rationale of the study
- 1.4 Research Questions
- 1.5 Research Methodology
- 1.6 Justification for the Study
- 1.7 Scope and Limitation of the Study
- 1.8 Chapter Disposition
- Chapter Two: Literature Review
- 2.1 Introduction
- 2.2 The Right Credit Standards
- 2.3 General Principles of Lending
- 2.4 Banks and Trade Financing
- 2.5 Credit Standards for Large Personal Lending
- 2.6 Managing Risk in Lending to Small Corporate Organisation
- 2.7 General framework of Credit policies of some Banks in Ghana
- 2.8 Banks' SME Finance Policy
- 2.9 Factors affecting Government Policy
- 2.10 Customers' Request and Loan Documentation
- Chapter Three: Research Methodology
- 3.1 Introduction
- 3.2 Research Design
- 3.3 Population of the Study
- 3.4 Sampling Procedure
- 3.5 Research Instrument
- 3.6 Data Collection Procedure
- 3.7 Data Analysis
- Chapter Four: Data Analysis and Presentation
- 4.1 Introduction
- 4.2 Distribution and Analysis of Responses received from Banks' customers
- 4.3 Views on Mechanism for Safe Guarding Loans
- 4.4 Research Findings
Objectives and Key Themes
This study aimed to examine the loan application appraisal processes and the adequacy of loan monitoring mechanisms in selected Ghanaian commercial banks. The research investigated the challenges of credit risk management within these banks, focusing on loan defaults and strategies for mitigation.
- Credit Risk Management in Ghanaian Commercial Banks
- Loan Application Appraisal Processes
- Loan Monitoring Mechanisms
- Causes of Loan Defaults
- Strategies for mitigating credit risk
Chapter Summaries
Chapter One: Introduction: This chapter sets the stage for the research by providing background information on credit risk management in Ghanaian commercial banks. It clearly defines the problem of loan defaults and the need for effective risk management strategies. The chapter outlines the study's objectives, research questions, methodology, and scope, providing a roadmap for the subsequent chapters. It justifies the importance of the research and highlights the limitations encountered during the study.
Chapter Two: Literature Review: This chapter presents a comprehensive review of existing literature on credit risk management, focusing on best practices and challenges in the banking sector. It explores various aspects of lending, including credit standards, general principles of lending, trade financing, and risk management strategies specifically tailored to large personal loans and small corporate organizations. The chapter also delves into the general credit policies of Ghanaian banks and their approaches to SME financing, analyzing relevant government policies and their influence. The section on customer loan requests and documentation provides a crucial link between theoretical frameworks and practical lending procedures.
Chapter Three: Research Methodology: This chapter details the research design, population, sampling procedures, and data collection methods used in the study. The researchers employed questionnaires as the main instrument, utilizing purposive and random sampling techniques to gather data from bank officials and customers. It also outlines the data analysis techniques employed. This section's transparency ensures the study's reproducibility and strengthens the validity of the findings.
Chapter Four: Data Analysis and Presentation: This chapter presents the findings of the study through detailed analysis of the collected data. It presents the distribution of responses from bank customers and explores their views on loan safeguards and the reasons for loan defaults. Key findings related to credit risk management practices and their effectiveness are discussed. The analysis provides insights into the effectiveness of current strategies and areas requiring improvement.
Keywords
Credit Risk Management, Ghanaian Commercial Banks, Loan Defaults, Loan Appraisal, Loan Monitoring, SMEs, Risk Mitigation, Banking Regulations, Financial Inclusion.
Frequently Asked Questions: A Comprehensive Language Preview of Credit Risk Management in Ghanaian Commercial Banks
What is the overall topic of this research?
This research examines loan application appraisal processes, the adequacy of loan monitoring mechanisms, and challenges in credit risk management within selected Ghanaian commercial banks. It focuses on loan defaults and strategies for their mitigation.
What are the key themes explored in this study?
The study's key themes include credit risk management in Ghanaian commercial banks; loan application appraisal processes; loan monitoring mechanisms; causes of loan defaults; and strategies for mitigating credit risk.
What chapters are included in this research preview?
The preview includes summaries of four chapters: Chapter One (Introduction), Chapter Two (Literature Review), Chapter Three (Research Methodology), and Chapter Four (Data Analysis and Presentation).
What is covered in Chapter One: Introduction?
Chapter One provides background information on credit risk management in Ghanaian commercial banks, defines the problem of loan defaults, outlines the study's objectives, research questions, methodology, scope, and limitations, and justifies the research's importance.
What is covered in Chapter Two: Literature Review?
Chapter Two presents a comprehensive review of existing literature on credit risk management, exploring various aspects of lending, including credit standards, general principles, trade financing, risk management strategies for different loan types, Ghanaian banks' credit policies, SME financing, government policies, and customer loan requests and documentation.
What is covered in Chapter Three: Research Methodology?
Chapter Three details the research design, population, sampling procedures (purposive and random sampling of bank officials and customers), data collection methods (questionnaires), and data analysis techniques used in the study.
What is covered in Chapter Four: Data Analysis and Presentation?
Chapter Four presents the study's findings through data analysis, showing the distribution of responses from bank customers, their views on loan safeguards, reasons for loan defaults, and insights into the effectiveness of current credit risk management strategies.
What are the keywords associated with this research?
Keywords include: Credit Risk Management, Ghanaian Commercial Banks, Loan Defaults, Loan Appraisal, Loan Monitoring, SMEs, Risk Mitigation, Banking Regulations, Financial Inclusion.
What is the purpose of this language preview?
This preview provides a comprehensive overview of the research, including the title, table of contents, objectives and key themes, chapter summaries, and keywords. It is intended for academic use, facilitating the analysis of the research's themes in a structured and professional manner.
Where can I find more information about this study?
This preview provides a summary of the research. To access the complete study, you would need to obtain the full research document.
- Citation du texte
- Michael Nyarko-Baasi (Auteur), 2012, Credit Risk Management in Ghanaian Commercial Banks, Munich, GRIN Verlag, https://www.grin.com/document/212151
