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Credit Risk Management: Implications on Bank Performance and Lending Growth

Taiwo, J.N. and Ucheaga, E. G. and Achugamonu, Bede U. and Adetiloye, K. A. and Okoye, Lawrence U. and Agwu, M.E (2017) Credit Risk Management: Implications on Bank Performance and Lending Growth. Saudi Journal of Business and Management Studies, 2 (5B). pp. 584-590. ISSN 2415-6663 (Print), 2415-6671 (Online)

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Abstract

This study is an empirical investigation into the quantitative effect of credit risk management on the performance of Nigeria’s Deposit Money Banks (DMBs) and Bank lending growth over the period of 17 years (1998- 2014). Secondary data for empirical analysis was obtained from CBN Statistical bulletin 2014 and World Bank (WDI) 2015. The study employed multiple linear regression model to analyze the time series data. The result showed that sound credit management strategies can boost investors and savers confidence in banks and lead to a growth in funds for loans and advances which leads to increased bank profitability.. The findings revealed that credit risk management has an insignificant impact on the growth of total loans and advances by Nigerian Deposit money banks. The study therefore recommends that DMBs in Nigeria should strictly adhere to their credit appraisal policies which ensures that only credit worthy borrowers have access to loanable funds. Banks are to ensure that funds are allocated to borrowers with decent to high credit ratings

Item Type: Article
Uncontrolled Keywords: Credit risk, Non-performing loans, Deposit money banks, Bank profitability
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HG Finance
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Mrs Patricia Nwokealisi
Date Deposited: 19 Jun 2017 09:17
Last Modified: 29 Jun 2017 15:01
URI: http://eprints.covenantuniversity.edu.ng/id/eprint/8351

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