Assessment of Credit Risk Management Practices Of Commercial Bank Of Ethiopia

Abstract

The primary objective of this research was to assess credit risk management practices in commercial bank of Ethiopia. The design of the study was descriptive research design. The purposive sampling strategy was employed to identify study participants in this investigation. This investigation also included primary data. The was gathered using questionnaires distributed to bank employees in departments such as credit assessment, credit analysts, credit information and portfolio management, customer relationship managers (CRM), and risk management. Using SPSS software version 23, descriptive statistics were used to conduct the data analysis. Absence of the bank to review and update existing credit policies, procedures and strategy on regular basis, failure of the bank to consider future economic conditions of the country and less respond when credit default sign appear, senior management has somewhat a subjective decision in dealing with credit risk management. correlations between borrower financial condition, price changes, and the liquidity market for collateral assets are rarely assessed, and customers' willingness and ability to pay are not assessed on a regular basis are the main findings of the study. Therefore, it necessary to recommend the bank to disseminate credit risk management policies throughout the banks, examined customer’s willingness and ability to pay on regular basis and assessed the correlation between a borrower's financial condition, price changes, and market liquidity for collateral assets and Properly evaluating and measuring the adequacy, marketability, and enforceability of collateral securit