Credit Monitoring, Recovery Strategies and Performance of Commercial Banks in Uganda: A Case Study of Centenary Bank Kabale Branch
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Date
2022
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Publisher
Kabale University
Abstract
The study was sought to determine the influence of credit monitoring, recovery strategies and performance of centenary Bank. The study was guided by the following objectives namely; the influence of credit standards on the performance of centenary bank in Kabale district, the influence of sound credit policy on the performance of centenary bank in Kabale district, and the influence of communication on the performance of centenary bank in Kabale district. The study sampled 149 respondents from 203 as the target population. The study used a cross sectional design combined with a case study design. The findings/ results show that there is strong positive relationship between the variables. This stipulates that with proper enforced policies, improved communication and credit collection, review of credit procedures and monitoring helps in the aspect of financial performance of centenary bank and therefore the centenary bank should put much emphasis on the stated variables, centenary bank has tried in credit monitoring, recovery strategies for the positive financial performance of the institution. This is shown by 0.209 of the R square as indicated in the table 11 which indicates a positive relationship between credit monitoring, recovery strategies and financial performance of centenary. The results show that there is strong positive relationship of 3.826 between the variables. This stipulates that with proper assessment of credit standards, sound credit policy, and create communication channels and therefore centenary should put much emphasis on the stated variables, there is a strong positive relationship between credit monitoring, recovery strategies and financial performance of centenaryat Pearson correlation coefficient at 0.004. The study concludes that also, it increases the ability of the centenary banks mangers to manage the level of the earning volatility and reduce risk-weighted assets fluctuations which in turn affect banks profitability. The results show that centenary bank credit officers are qualified to monitor and evaluate potential and unexpected circumstances which could affect borrower’s credit strength. Since the credit monitoring management seemed to give a negative significance in relation to the profitability of banks, there are possibilities for these banks to improve profitability by ensuring the accurate determine for any potential changes regarding borrower's repayment abilities of the credit funds also their financial position. The study recommends that management of commercial banks should address cost and benefit implications of credit policy to suit the current dynamic finance industry so as to minimise costs associate with credit while maximizing the benefit from it.
Description
A Dissertation Submitted to the Directorate of Postgraduate Training in Partial Fulfilment of the Requirements for the Award of a Master’s Degree in Project Planning and Management of Kabale University
Keywords
Credit Monitoring, Recovery Strategies, Commercial Banks