AN ASSESSMENT OF CREDIT RISK MANAGEMENT PRACTICE: THE CASE OF DASHEN BANK S.C

Abstract

An important aspect that must be controlled is credit risk. Credit risk is the chance that a borrower or counter party won't fulfill their responsibilities under the terms set forth in the contract. One of the most important hazards for every commercial bank is credit risk. Credit risk results from a borrower's failure to perform. Bank authorities and banking regulators are quite concerned about the credit risk that banks are exposed to. This is due to the credit risk, which can quickly and almost certainly cause a bank to fail. It is not easy to manage credit risk; careful thought and procedures are required for detecting, measuring, controlling, and minimizing credit risk. The evaluation of Dashen Bank's credit risk management is the main goal of this study. In this study, the researcher chose study participants by using a straightforward random selection procedure. Both primary and secondary data were utilized in this investigation. Primary data were gathered by asking respondents in the credit risk management and allied directorates at the head office to fill out questionnaires. Tables, percentages, and other descriptive statistics were utilized to analyze and present the data. This is a result of inadequate ongoing follow-up, inadequate risk assessment, and present political conditions. Additionally, the bank's process needs to be modified because it was ineffective in lowering the NPL status. Based on the findings, the article suggests that the top management's assistance is insufficient and needs to be increased in order to ensure the availability of appropriate and clear standards for managing credit. Additionally, new approaches to interacting with debtors must be developed if banks are to be able to recoup their loans.