Tag Archives: Loan

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. 

Keywords: Borrower, Commercial Banks, Credit Risk Management, Loan

Impact Of Credit On Agricultural Producitivity: A Case Study Of Zarai Taraqiati Bank Ltd (Ztbl) Loans In District Kashmore At Kandh Kot, Sindh Pakistan (Published)

Agricultural sector is the largest contribution to Pakistan’s GDP. Agricultural credit plays an important role in enhancing the agricultural productivity in developing countries like Pakistan. The government of Pakistan introduced several agricultural credit loans through ZTBL and other commercial banks and institutional sources. This study estimated constrains faced by the farmers in acquisitioned source. This study also estimated the impact of credit on agricultural productivity. Data were collected randomly from 30 loanee farmers to three selected ZTBL branches and 30 non loanee farmers in the same villages. It found that the credit has a positive impact on the agricultural productivity and loanee farmers have more gross margins than non loanee farmers. Now the problem is to remove the constraints which small farmers are facing in this regard and then improve the utilization of the credit amount as planned at the time of disbursement in agriculture production process following findings were found. A major proportion i.e.40.8% of the farmers belonged to young age group (36-45 years). It was found that majority of the respondents had low level of education in the selected area. More than 51.7% of the respondents had 6-10 acres of the land holding. A huge majority 95% of the respondents had knowledge about the agricultural credit scheme of the ZTBL Bank. More than 56.75 of the loanees’ farmers avail credit facilities for the first time from the ZTBL bank. A large majority 63.3 of the farmers were not satisfied with the interest rate charged by the banks. It was found that a large number of farmers mutualized the credit amount. About 66.7% farmers got agricultural credit facility from bank without facing any problem. Result indicate that average cultivated area in case of loanee farmers is higher than non-loanee farmers. It was conclude that the loanee farmers had more cost of production as compare to non loanee farmers. Results of regression analysis indicate that credit had very normal impact on agricultural productivity as limiting factors is the proper utilization of loan mount in agricultural sector. The most common utilization of credit amount as construction, repair and renovation of the houses by the loanee farmers.

Keywords: Agriculture, Credit, Farmer, Loan, Producitivity, Zarai Taraqiati Bank

The Residential Housing Problem in Anambra State (A Case Study of Onitsha Metropolis) (Published)

The research which is captioned “Residential Housing Problems in Anambra State (A Case Study of Onitsha Metropolis) was targeted at portraying the causes of housing deficit alongside its attendant effects on the populace with regards to habitable housing (Residential Properties). The roles of the public sector in housing development through its Ministries, Department and Agencies (MDA) were also highlighted in cognizance to the Federal Mortgage Bank of Nigeria. Owing to the fact that housing problems are over-whelming, ranging from over-crowding, shortage of housing supply etc. The researcher adopted both the primary and secondary methods of data collection. I found that the low income earners were the one’s mostly affected by housing problems and Onitsha being the commercial hub of Anambra State, it is pertinent that government should have synergy with the private developers and re-direct their motives towards arresting these housing problems that are highly prevalent within the area of study. The findings of the study shows that lack of or inadequate housing financial assistance, high cost of building materials, high interest rate and lack of interest by financial institutions to facilitate loans to investors, uncoordinated policies by the government, etc are responsible for the residential housing problems inherent in most of our urban areas. The study recommends that there should be an improvement on loan facilities for building projects and a downward review of interest rates by mortgage banks on loans to property developers.

Keywords: Building, Housing Problem, Loan, Nigeria, Property Developer

Effect of Village Savings And Loan Associations on Small and Medium Enterprise (Sme) Growth in Rwanda: Survey of Kayonza District (Published)

The research purpose was to examine the effects of Village Savings and Loan Associations on the growth of Small and medium enterprises in Rwanda because despite the contribution of Rwandan Government supported the establishment of Village Group Savings Cooperatives as a way of providing financial accessibility to rural Rwandans who cannot afford big loans from the banking institutions in order to support their micro business, performance of SME’s in the rural areas is still low (RDB report 2014). The researcher achieved this research by use of three specific objectives namely; To analyze the effect of credit/ loans on growth of SME growth in Kayonza District; To examine the effect of training and advice on investment on SME Growth in Kayonza District; and to analyze the capital formation on SME growth in Kayonza district. The research is beneficial to the researcher, SME’s, government and JKUAT. The researcher reviewed both theoretical and empirical literature on the effect of Village Savings and credit cooperatives on SME’s performance. The researcher used descriptive method of study based on qualitative and quantitative approach in order to get better analysis of the study. The population size is 884 and sample of was taken. Both primary and secondary sources with their relevant tools like questionnaire and documentary analysis in order to come up with required data. In the findings it was established that Kayonza district has got various credit/ loan services, Training and Advice on Investment services and Capital formation (savings) services. Credit/ loan services includes;  provision of  required amount of loan to the clients, provision of  loan to the clients within a short time, provision of  loan without collaterals but members guarantee, provision of  the loan to the clients at a low interest rate and provision of  loans to the clients with flexible repayment schedule depending on one’s earnings. Training and Advice on Investment services which that include; provisions of investment briefings on terms and conditions of the loan before acquiring loan, provision of investment seminars and workshops to members, provision of tour to successful members business before loan is awarded to clients, VSLA also make follow up visit to their clients in order to provide business advice on monthly basis and they have created members working team who are guarantors and advisors. Capital formation (savings) services which ensures that that VSLA in Kayonza District make clients contribute monthly or weekly to the group savings, savings contribution is managed through rules and procedures, contributed fund is kept safe, clients to divide the saved funds at an agreed interval and clients has a right to refund once he withdraws from the saving group. These services positively influence the SME growth in Kayonza District in the sense that VSLA services has increased capital base increased of members business, increased profitability of the business, made business expand its branches, made members business acquire assets, made members business cash flow to improve and above all VSLA savings has made my progress from hand to mouth to planning for the future. This was justified by table 4.15 which showed the relationship between Village Savings and Loan Associations (VSLA) and SME growth in Kayonza District whereby the respondents N is 366 and the significant level is 0.01, the results indicate that independent variable has positive high correlation to dependent variable equal to .673** 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 Village Savings and Loan Associations (VSLA) and SME growth in Kayonza District. We can therefore conclude Village Savings and Loan Associations (VSLA) contribute to positive SME growth in Kayonza District.

 

Keywords: Financial Accessibility, Growth, Loan, Rwanda, Savings, Small and Medium Enterprise (SME), Village