Browsing by Author "NYARKO, SAMUEL OFOSU"

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    Determinant of loan default, a case study of Dumpong rural Bank limited and other Rural Banks in the Kwahu Municipality
    (KNUST, 2016-08) NYARKO, SAMUEL OFOSU
    The main aim of this study is to examine the determinant of loan default in Dumpong rural bank and other rural banks in the Kwahu Municipality. It specifically tries to examine in detail, the laid down credit policy which regulates loan administration and to determine how loan default affects the operations of rural banks. The study employed survey and descriptive research design and uses questionnaire to collect data from five rural banks in the Kwahu Municipality namely Kwahu Rural Bank, Kwahu Praso Rural Bank, Odwen Anoma Rural Bank and Mumuadu Rural Bank. At the end of the data collection, the collected data was analyzed. Simple frequency tables, figures and percentages were used to analyze the data. The study revealed that, poor monitoring, bad weather, wrong timing of credit delivery, business failure and high interest rate makes the customers default the loan. It was further revealed that microfinance loan and agriculture loan had the highest percentage of loans default rate. The conclusion of the study is that loans default affects the profitability of rural banks and even cause a “run” on the bank. The study recommended that, rural banks should establish local credit bureaus that will provide database to which all participating financial institutions will provide the names of defaulted clients and their personal data. This will help identify defaulted clients among the banks easily. The officials of the bank must visit the customers on regular basis to know the state of their business.