THE PERFORMANCE OF PROJECT REHABILITATION AND LOAN RECOVERY PROCESS IN THE CASE OF DEVELOPMENT BANK OF ETHIOPIA

Abstract

The purpose of this study is to examine the performance of Project Rehabilitation and Loan Recovery Process at head office level in Development Bank of Ethiopia during the year 2009/10 to 2014. The concern is to identify and measure the actual performance of Project Rehabilitation and Recovery Process in relation to monitoring and follow up activities, government policy and performance measurement criteria towards the ultimate goal of the bank. A descriptive and explanatory research method was applied and primary data was collected using questionnaire to the 110 respondents i.e. participating the target population (census) that are founds at head office. Secondary data also reviewed in order to strengthen the study. Based on the source data descriptive analysis, hypothesis test and multiple regression were developed and interpreted by using quantitative method. The results from secondary data indicated that most of loan recoverable problems exhibited from Manufacturing and Extracting Industries and Commercial Agriculture, no record revealed on the area of Agro-Processing Industries, therefore there is no recoverable problems on this area. The findings also revealed from primary data that there has been problem encountered on performance of PRLRP because of the loose contact of monitoring and follow up activities, government policy and performance measurement criteria. It was proved that the predictors are statistically significant. It was recommended that government policy and credit policy of the bank should comply with the clients of primary sector requirements. To avoid or minimize the sick loans the organization should work on even default. Monitoring and follow up activities should have to give more emphasis on every steps of the business.