Credit Management, Credit Policy and Financial Performance of Commercial Banks in Uganda (Published)
This study was carried out with the purpose of analyzing the effects of credit management on the financial performance of commercial banks in Uganda. Specifically, the study sought to establish whether there is a relationship between credit policy and performance, Capital Adequacy and performance and credit risk control and performance. In achieving the objectives assigned by the study, a causal research design was undertaken and that was facilitated by the use of secondary data which was obtained from published audited financial statements of commercial banks and the BOU annual supervision reports. The study used universal sampling techniques, where all banks licensed and operational in Uganda were selected, multiple regression was used. The findings indicated a significant relationship (r = 0.639) between credit management and the financial performance of commercial banks in Uganda. The coefficient of determination R² was 0;408 meaning that credit management indicators explain up to 40.8% of variations in the financial performance of commercial banks in Uganda. The results from the coefficients summary in the regression model indicate that the significance of coefficients of credit policy (LR), capital adequacy (CAR) and Credit Risk Control (NPL/TL) are -0.031, -0.555 and -1.005 respectively. It was therefore found that both the CAR and the NPL/TL are significant though have an impact at different significance i.e. capital adequacy and Credit Risk control have a greater impact compared to Credit policy (LR) on the financial performance of commercial banks in Uganda. It was established that there is no significant relationship between credit policy and performance of banks in Uganda, however, a significant relationship between the credit risk control, capital adequacy and the performance of commercial banks was established. It was recommended that should use a moderate credit policy as a stringent credit will undermine the financial performance. Moreover, commercial banks should seek to adequately control their credit risk by keeping lower their ratio of nonperforming loans which is the major determinant of commercial banks’ financial performance as shown in the study. The bank of Uganda should encourage banks in Uganda to use credit metrics model in controlling its risks
More than ten commercial banks have collapsed in Uganda in the last two decades due to problems such as frauds, insider lending by dominant shareholders, weak boards of directors, non-performing loans portfolios, and managerial opportunism. This paper aims to investigate the impact of corporate governance on commercial banks’ performance in Uganda. The study adopted a survey-based approach to purposively collect data from the respondents of all licensed commercial banks in Uganda at the time of the study. Data was collected using a self-administered research instrument on the most emphasized corporate governance variables of board composition, board size, capital adequacy ratio, and the independent audit committee for the performance of banks. The data quality control was ensured by establishing the internal consistency of the research instrument that resulted in an overall Cronbach’s reliability coefficient of 0.78. The data was analyzed using hierarchical multiple regression analysis statistical technique after controlling for bank size and leverage. Using an alpha level of 0.05, the study found that the change in R-squared was 27.9% with a non-significant change in F (4,14) = 1.64, p = 0.219. Secondly, for the whole model F (6,14) = 1.587, p = 0.223 which signified that was no significant impact of corporate governance on commercial banks’ performance in Uganda while controlling for bank size and leverage. In order to improve bank performance in Uganda, the central bank should step up the supervisory and regulatory policies. This would involve proactive strategies such as regular review of corporate governance instruments like the Financial Institutions Corporate Governance Regulations (2005) so as to counteract any new threats to the banking sector which could render these instruments ineffective.
The Impact of Knowledge Management on the Performance of Commercial Banks’ Employees in Jordan (Published)
This study examined the impact of knowledge management on the performance of commercial banks’ employees in Jordan, the sample of the study consisted of 150 employee from 12 commercial banks located at Irbid Governorate of Jordan, a set of questionnaire was distributed to them and collected in order to conduct this study. Descriptive statistics were used to analyze the data using the Statistical Package for the Social Sciences (SPSS). Simple regression test was used to test the hypotheses to achieve the objective of the study. The results of the study showed that there is a statistically significant impact at the level of (α ≤ 0.05) for knowledge management in the functional performance of employees of commercial banks, as well as, there are no differences in the responses of members of the sample to the impact of knowledge management on the performance of employees of commercial banks due to the functional variables (age, gender, academic qualification, and years of experience).
Credit Expansion and Commercial Banks Soundness in Nigeria: An Application of Multi -Dimensional Analysis (Published)
This study examined the effects of credit expansion on commercial banks soundness in Nigeria. The objective was to ascertain the relationship between credit expansion and commercial banks soundness in Nigeria. Time series data was collected from Central Bank of Nigeria statistical bulletin and stock exchange factbook. Ordinary least square method was used as data analysis method. Model I had capital adequacy indicator was modeled as the function of bank credit to manufacturing sector, communication and transport, mining and quarrying, agricultural sector and credit to small and medium scale enterprises while model II modeled capital adequacy indicator as the function of credit to private sector, net domestic credits, medium term credits, short term credits and long term credits. From the findings, Model I found that the independent variables explained 77 percent variations on capital adequacy ratio. The beta coefficient found that all the independent variables have positive effects on bank capital adequacy except credit to manufacturing sector. Model II found that the independent variables can explain 81 percent variations on capital adequacy while the beta coefficient found that all the independent variables have positive effects except medium term credit. The study concludes that credit expansion significantly relates to commercial banks soundness in Nigeria. We therefore, recommended for a well-articulated credit policies that will strengthen commercial banks soundness in Nigeria.
Credit Risk Management System of Commercial Banks: An Analysis of the Process (Published)
Credit risk is the risk that a financial institution will incur losses because the financial position of a borrower has deteriorated to the point that the value of an asset (including off-balance-sheet assets) is reduced or extinguished. The purpose of this work is to expatiate strategies to mitigate challenges resulting from unpaid loans, which could be used further in understanding the components of credit risk management (CRM) system of commercial banks (CBs) in a less developed economy. This was accomplished through the use of both primary (interviews) and secondary (various relevant documents) information from CBs and key management officials dealing with credit management. The investigation proved that credit risk can be managed and minimized when formidable strategic approaches are implemented and adhered to. This implies that the strategy operated by a bank is an important consideration for a CRM system to be successful. Ghana, a less developed economy, provides an excellent case for studying how CBs operating in economies with less developed financial sector manage their credit risk.
Effect Of Credit Management on Performance of Commercial Banks in Rwanda a Case Study of Equity Bank Rwanda Ltd (Published)
Credit management is one of the most important activities in any company and cannot be overlooked by any economic enterprise engaged in credit irrespective of its business nature. Sound credit management is a prerequisite for a financial institution’s stability and continuing profitability, while deteriorating credit quality is the most frequent cause of poor financial performance and condition. As with any financial institution, the biggest risk in bank is lending money and not getting it back. The study sought to determine the effect of credit management on the financial performance of commercial banks in Rwanda. The study adopted a descriptive survey design. The target population of study consisted of 57 employees of Equity bank in credit department. Entire population was used as the sample giving a sample size of size of 57 employees. Purposive sampling technique was used in sampling where the entire population was included in the study. Primary data was collected using questionnaires which were administered to the respondents by the researcher. Descriptive and inferential statistics were used to analyze data. The study found that client appraisal, credit risk control and collection policy had effect on financial performance of Equity bank. The study established that there was strong relationship between financial performance of Equity bank and client appraisal, credit risk control and collection policy. The study established that client appraisal, credit risk control and collection policy significantly influence financial performance of Equity bank. Collection policy was found to have a higher effect on financial performance and that a stringent policy is more effective in debt recovery than a lenient policy. The study recommends that Equity bank should enhance their collection policy by adapting a more stringent policy to a lenient policy for effective debt recovery.
The Influence of Capital Adequacy Ratio on the Financial Performance of Second-Tier Commercial Banks in Kenya (Published)
Performance of most mid-tier commercial banks in Kenya has been fluctuating over the past few years. Meanwhile, some of them continue to post impressive results as majority report losses and others merge in order to remain sustainable. This situation points to financial performance affecting the mid-tier commercial banks in Kenya. The government, through the Central Bank of Kenya, introduced prudential regulations aimed at bringing sanity in the banking industry. This move led to closure of Dubai Bank and Imperial Bank while Chase Bank went under statutory management awaiting new investors. From this, an investigation was done on how Central Bank regulations influenced financial performance of second-tier commercial banks in Kenya. Based on the study, this paper explores how capital adequacy ratio influences financial performance of commercial banks in Kenya. The study was purely quantitative research and, therefore, correlation research design and descriptive research designs were used. The study was conducted in 14 second tier commercial banks in Kenya. It collected financial data from 2013 to 2016, considering that the regulations came into effect in 2013 from CBK and commercial banks websites. The data was sourced from Central Bank of Kenya after getting permission and approval from National Commission for Science, Technology and Innovation (NACOSTI). Data collected was analysed using descriptive and inferential statistics. Multiple Regression Analysis was used to test the study research hypothesis. Findings were presented through tabulations and graphical illustrations. Computed correlation showed that capital adequacy ratio had significant strong positive relationship (p<0.05) with financial performance of mid-tier commercial banks. In conclusion, it was found that capital adequacy ratio is among the main predictors of mid-tier commercial banks’ financial performance. It was therefore recommended that CBK needs to regularly monitor commercial banks by ensuring that they publish their quarterly results to the public. The investment regulators in the country such as the Capital Markets Authority (CMA), Kenya Banker Association (KBA) and Central bank of Kenya can use these study findings to understand the bottom line impact of bank regulatory requirements and in understanding banks decision on to its customers.
Lending activities of commercial banks always contain risks and the possibility of arising bad debt is a clear manifestation of credit risk. Bad debt will have consequences not only to banking but also to the economic development in Vietnam. Therefore, taking the risk to take measures to prevent risks and to deal with losses is a necessary and effective way of banking credit in general and lending activities in particular. The study results showed that there were 250 credit managers who interviewed and answered about 12 questions. Data collected from July 2016 to April 2017. This study had been analyzed Cronbach’s Alpha, KMO testing and the result of KMO testing used for the next research of the regression. Managers’ responses measured through an adapted questionnaire on a 5-point Likert scale (Conventions: 1: Completely disagree, 2: Disagree, 3: Normal; 4: Agree; 5: completely agree). Hard copy and online questionnaire distributed among 5.000 credit managers of commercial banks in Ho Chi Minh City. In addition, two components affecting the bad debt of commercial banks in Ho Chi Minh City with significance level 5 percent and then the researcher has policies improving the business success of the commercial banks in Ho Chi Minh City in the future
Determinants Affecting the Effectiveness of Risk Management of Commercial Banks in Dong Nai Province (Published)
Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risk management’s objective is to assure uncertainty does not deflect the endeavor from the business goals. The objectives of this study are to identify the factors that affecting the effectiveness of risk management of commercial banks in Dong Nai province. The data analysis for this study is a quantitative type. Moreover, the results provided an insight of the effectiveness of risk management from 350 customers related to commercial banks in Dong Nai province. The regression analysis result showed that there were five factors that included of factors following the procedure (Pr), the communication (Co), the technology (Te), the Human Resource development (Hr) and the organization structure (Or) affecting the effectiveness of risk management of commercial banks in Dong Nai province with significance level of five percent. In addition, the study results showed that there were 350 customers who interviewed and answered about 29 questions. The Data collected from November 2016 to April 2017. This study had been analyzed Cronbach’s Alpha, KMO testing and the result of KMO testing used for the research method of the regression. Customers’ responses measured through an adapted questionnaire on a 5-point Likert scale following; conventions: 1: Completely disagree, 2: Disagree, 3: Normal; 4: Agree; 5: completely agree. Hard copy and online questionnaire distributed among 50.500 customers of the commercial banks.
Analysis of Correlation between Corporate Social Responsibility (CSR) and Business Performance Management (BPM) Of the Commercial Banks in Dong Nai Province (Published)
The research objective is to find the Pearson’s correlation coefficient. Correlation is a technique for investigating the relationship between two quantitative, continuous variables. In addition, the Pearson’s correlation coefficient (r) is a measure of the strength of the association between the two variables, especially; the correlation is significant between Corporate Social Responsibility (CSR) and Business Performance Management of the commercial banks in Dong Nai province. The study results showed that there were 200 staffs of commercial banks in Dong Nai province who interviewed and answered about 10 questions but 168 staffs processed. Data collected from December 2016 to March 2017 for commercial banks in Dong Nai province. There are the Cronbach’s Alpha test and the result of KMO analysis which used for correlation analysis. Staffs’ responses measured through an adapted questionnaire on a 5-point Likert scale. Hard copy and online questionnaire distributed among 1.000 staffs of commercial banks in Dong Nai province. In addition, the correlation is significant at the 0.05 level between Corporate Social Responsibility (CSR) and Business Performance Management of the commercial banks in Dong Nai province. The research results processed from SPSS 20.0 software.
The Recommendations Enhancing The Effectiveness Of Credit Risk Management For Commercial Banks In Ho Chi Minh City (Published)
In Vietnam, the commercial banks are in virtually the country and have been subject to a great deal of regulations. One of the regulations is the minimum capital commercial banks must keep absorbing loss if unexpected things happen. Besides, the credit risk is one of the most significant risks that banks face, considering that granting credit is one of the main sources of income in commercial banks. Therefore, the management of the risk related to that credit affects the profitability of the banks. The aim of the research is to provide readers with accurate information regarding factors affecting the credit risk management of commercial banks in Ho Chi Minh City and the researcher has the recommendations enhancing the effectiveness of credit risk management for commercial banks in Ho Chi Minh City. The study results showed that there were 250 managers of commercial banks in Ho Chi Minh City who interviewed and answered about 19 questions. Data collected from June 2016 to December 2016 for commercial banks in Ho Chi Minh City. The paper had been analyzed KMO test, Cronbach’s Alpha and the result of KMO analysis which used for multiple regression analysis. Managers’ responses measured through an adapted questionnaire on a 5-point Likert scale (Conventions: 1: Completely disagree, 2: Disagree, 3: Normal; 4: Agree; 5: completely agree). Hard copy and online questionnaire distributed among 1.000 managers of commercial banks in Ho Chi Minh City. In addition, the exploratory factor analysis (EFA) results showed that there were five factors, which included of factors following human resources (X1), macro environment (X2), customer (X3), technology capabilities (X4) and financial capabilities (X5) with significance level 5 percent. In addition, all of five components affecting the management of the credit risk at commercial banks in Ho Chi Minh City with significance level 5 percent. The research results processed from SPSS 20.0 software.
The Influence of Foreign Exchange Rate Fluctuations on the Financial Performance of Commercial Banks Listed At the Nairobi Securities Exchange (Published)
A foreign exchange rate is the price at which one currency may be converted into another. An exchange rate is an important aspect in a nation’s international trade, balance of payments and overall economic performance. This paper is based on a study that sought to understand the relationship and effects of foreign exchange liberalization on financial performance of commercial banks listed in Kenya’s Nairobi Securities Exchange. The study used a time series correlation research design with the target population being all commercial banks that are listed in the Nairobi Securities Exchange between 2006 and 2013. Data was sourced from the Central Bank of Kenya and published yearly accounts of listed banks. The study used multivariate Linear Regressions to establish the relationship between foreign exchange rate fluctuations, inflation rates, interest rates and bank performance indicators. Pearson product moment correlation (r) was applied to establish the relationship between the variables. The study found that there existed a strong positive relationship between foreign exchange rates and financial performance indicators. The positive relationship between exchange rate and financial performance may reflect how fluctuating and volatile exchange rate may have contributed to the growth of profitability of banks. The study recommends that the Government should put up more measures to increase the country’s exports.
Studying the Role of Corporate Governance in the Development of Risk Management in Commercial Banks Listed At Amman Stock Exchange (Field Study) (Published)
The study aimed to identify the role of corporate governance in the development of risk management in commercial banks listed at Amman Stock Exchange (ASE). To achieve this goal, the researcher relied adopted an analytical descriptive approach in her study to be convenient to the study nature. A questionnaire has designed as a tool to collect data. It distributed to a sample survey of the members of the committee’s corporate governance, audit committees and risk management commissions in these banks. The questionnaires have statistically analyzed using Statistical Package for Social Sciences (SPSS). The most important findings of the study that the presence of the role of corporate governance committees resulting from the Board of Directors in development of risk management in banks listed at ASE. This role was in uneven degree, between medium and high. In addition, the role of audit committees is the most development in the risk management, followed by risk management committees, and finally to corporate governance committees. The study concluded a set of recommendations including: It is necessary to activate the role of committees in the exercise of its work in development of risk management in commercial banks listed at ASE. The sub-committees should constituted of the board of directors in accordance with corporate governance, which includes financially and accounting experienced members. Finally, the financial experience should not limited to a specific number of members
Effect of Corporate Governance on the Financial Performance of Banking Industry in Rwanda: (A Case Study-Commercial Banks in Rwanda) (Published)
This study investigated the effect of corporate governance on Financial Performance of commercial banks in Rwanda. The study has four objectives which determined how board size, CEO duality, institutional ownership, board composition affect financial performance of commercial banks in Rwanda. The study adopted a descriptive research design which assisted to examine the effect of corporate governance on financial performance of commercial banks. The population of the study was 120 composed by the senior managers of the commercials banks operating in Rwanda; and the sample size was 92 but only 76 responded to the questions asked which represent 84%.The key findings for this research were showing that board independence, board composition, institution ownership do not have an effect on financial performance since the majority of respondent have disagreed the effect of corporate governance variables on the financial performance of commercial banks. The analysis of variance has shown that corporate governance variables are not significant predictors to explain the increase of profitability represented by return on asset and return on equity since the p value was 0.447 and 0.186 respectively. This research has concluded that there is no effect between corporate governance using board size, board composition CEO duality as well as institutional ownership are not predictors of financial performance and recommended the regulatory body of commercial banks in Rwanda to provide a guidance on the use of corporate governance practices which may impact positively the financial performance of commercial banks
Commercial Banks Role in Financing Small Scale Industries in Nigeria (A Study Of First Bank Plc. Ado-Ekiti, Ekiti State) (Published)
The research study examines the role of commercial banks in financing small scale enterprises in Ado Ekiti, Ekiti State. The primary purpose of the study is to examine how SMEs can be developed through the intervention of the banking sector. Descriptive research design was adopted. The population of the study is the entire SMEs in Ekiti state and United Bank for Africa (UBA). Questionnaires were used as an instrument of primary data collection. Purposive sampling technique was used to select the sample; correlation analysis was employed using chi-square. Findings revealed that there is a positive correlation between loans grants by banks and the growth and development of SMEs in Ekiti State also, that SMEs cannot be concentrated in Ekiti State if they are not effectively financed due to the relationship that exists between the banks and SMEs. It was recommended that guidelines/schemes by commercial banks to finance SMEs needs to be flexible to accommodate the small and medium scale entrepreneurs.
FACTORS AFFECTING THE IMPLEMENTATION OF TOTAL QUALITY MANAGEMENT IN JORDANIAN COMMERCIAL BANKS FROM CUSTOMERS POINT OF VIEW (Published)
This research aimed at investigating the factors affecting the implementation of TQM in a sample of commercial banks in Jordan. The study used the questionnaire as a tool to collect data. The results showed that there are some defaults in the implementation of TQM in commercial banks in Jordan and some aspects of TQM were ignored and wrongly Implemented and this in turn affected customer care
The purpose of this research was to examine the contribution of E-banking towards banking on performance of banking Institutions in Rwanda because according to National bank of Rwanda (NBR Report, 2012) there is delay in payment of checks between banks; time wasted in banks as people line in queue waiting for service, errors as a result of manual work and fraud related cases was common. Bank clients complain of the above hence the researcher was interested to examine the contribution of this system to banking efficiency in Rwanda. The study used descriptive research design by basing on qualitative and quantitative approach in order to get better analysis of the study. Both primary and secondary data collection tools were used with their relevant tools like questionnaire and documentary analysis in order to come up with required data. In the findings it was established that Electronic banking system like ATM, Pay direct, electronic check conversion, mobile telephone banking and E transact has a great impact on bank performance because they increase profitability, reduce bank cost of operations, and increase bank asset and bank efficiency. The great contributions of e banking on banking performance is shown in table 4.21 which provides the relationship between E banking and Performance of bank of Kigali in Rwanda whereby the respondents N is 44 and the significant level is 0.01, the results indicate that independent variable has positive high correlation to dependent variable equal to .656** and the p-value is .000 which is less than 0.01. When p-value is less than significant level, therefore researchers conclude that variables are correlated and null hypothesis is rejected and remains with alternative hypothesis. This means that there is a significant relationship between E banking and Performance of bank of Kigali in Rwanda. As conclusion E banking contributes to positive performance of banks as witnessed by of bank of Kigali.
BANKS’ EMPLOYEES’ ATTITUDES TOWARDS THE ROLE OF ENGLISH LANGUAGE IN BANKS’ WORK: A CASE STUDY OF THE COMMERCIAL BANKS OPERATING IN TULKARM/ PALESTINE (Published)
This study aimed to determine the banks’ employees in Tulkarm district attitudes towards the importance of English language at banks’ work and answered the following main question:What is the role of the English language in banks work as viewed by Tulkarm banks’ employees?The study also examined the following null hypothesis :There are no significant differences at (α≤0.05) in Tulkarm banks employees attitudes towards the importance of English language at bank work due to :language of study, age , experience, university of study , level of English , and level of education variables.From the previous survey for the importance of mastering English in banks’ environments ,through which we may find an urgent need for English for dealing with foreign customers, understanding new electronic administration requirements, and dealing with English documents and endorsements and getting use of some foreign experience in developing banks’ work, we can interfere the following:
1- There is high awareness for the need of English at bank’s environment among banks of Tulkarm district employees.
2- There is a distinctive motivation among employees of Tulkarm district banks towards spending time learning English through courses or workshops.
According to the results and findings of the studies and the statistical analysis of the questionnaire, the researchers recommend the following:
1- Banks’ administrations should give high importance for English Language fluency as an important criterion for choosing bank employees in various fields of work.
2- There should be English courses sponsored by banks’ administration to be given to employees to enhance their ability to use English with others fluently.
3- A system of reinforcement for taking these courses and developing English use ability should be accredited and considered as an urgent requirement for the bank.
The purpose of this research is to examine the degree to which banks in Ghana use risk management practices and corporate governance in dealing with different types of risk. A modified questionnaire, divided into two parts was developed and administered to the selected banks’ board of directors, senior risk management officers and selected staff. The first part of the questionnaire covered five aspects: understanding risk and risk management, risk identification, risk assessment and analysis, risk monitoring, and corporate governance and risk management practices. This part included 32 closed-ended questions based on an interval scale. The second part consisted of two closed-ended questions based on an ordinal scale dealing with two topics: methods of risk identification, and risks facing the sampled banks. The result of the study indicated that, Board of Directors, senior staffs and not all staff are actively involved in risk management and the most important types of risk facing the sampled banks are credit risk, operating risk, solvency risk, interest rate risk, and liquidity risk. The study also found out that the sampled banks are efficient in managing risk