Management of Credit Risk; the Case of South Akim Rural Bank Limited, Koforidua

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The research was on an examination of the management of credit risk at the South Akim Rural Bank in Koforidua. Descriptive survey was used and the purposive and the systematic methods of sampling were used to select the study units. A questionnaire was used for the employees while the Branch Manager, and the other staff purposively selected were interviewed in addition to responding to questionnaires. The study revealed that most customers were familiar with the processes for granting loans and they mentioned some of these; the qualification requirements for loans are only sometimes made known to potential loan applicants; most customers have taken loans from the bank but when it comes to the repayment of such loans, most of them default mainly as a result of failures of the businesses they invest in. The study revealed that the most often used measure of credit risk reduction is through the use of collateral security, guarantees and stringent management practices. The study concluded that the management of credit risk is a big issue at the South Akim Rural Bank in Koforidua and though there were some measures in place at the bank for the reduction of the risks associated with credit, such measures did not seem to be very effective.
A Thesis submitted to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfillment of the requirements for the degree of Commonwealth Executive Masters of Business Administration,