ASSESSMENT OF CREDIT MANAGEMENT PRACTICES: THE CASE OF LION INTERNATIONAL BANK S.C

Abstract

This study intends to assess credit management practice of Lion International Bank S.C based on three basic dimensions namely the practice of the bank in managing it’s credit management policy and procedures in loan processing, loan provision and credit collection practice. The data were gathered from all credit management department staff of the head office and branches found in Addis Ababa. Both primary and secondary source of data were used. Questionnaire and interview was used as a main instrument to collect primary data while the secondary data is collected from the bank’s annual reports (2016-2020). The questionnaires were prepared in a common Likert-scale format. Among the distributed 60 questionnaires about 90% has completely filled and returned. Researcher used a quantitative research approached. Due to the nature of the study the descriptive research design were used. Census method was used to select a target respondent. The study findings revealed that lack of credit collection follow up, poor credit culture and instability of the country were a major reason for default. Also on a positive note the bank’s credit policy and procedure is in line with NBE’s rules and regulation. Finally, this study ends up with some recommendations were the bank should strengthens its credit collection follow up system and also Credit management policy and procedures of the bank should frequently reviewed and updated.