An assessment of credit management process of credit unions: (A case of societies in Obuasi municipality)

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July 2015
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This research investigates the credit management processes that are employed by credit unions to sustain their business performance. The purpose of this study is to examine what tools, interventions and standards are exercised in credit unions. Moreover the skill set and level of credit management personnel is assessed as well as the gaps in the credit management processes. The overall principle of this research is to observe if these processes are sufficient enough to sustain their business performance or do they need to be updated. The survey was concentrated on five societies in Obuasi Municipality in order to obtain an insight into their daily credit management process. To complement this survey, interviews were conducted. The key results underline that credit unions appear to be deficient in the credit management department; namely in the areas of experience, academic qualification of credit committee members and the consistency of areas interventions use by credit unions. Moreover, the lack of technology operated in the loan decision process is apparent. Therefore more complex and sophisticated models are a prerequisite if credit unions are to maintain financial stability. In spite of this a number of arduous challenges will face credit unions to implement these changes as their ethos and social duty must be considered. This study therefore provides an insight into this topic and helps promote further research into same. In general, this research has a practical value to it as it will disseminate the findings to the survey participants. Subsequently, these credit unions can incorporate the recommendations from this study into their credit management processes in order to sustain their performance.
A Thesis submitted to the Department of Accounting and Finance, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Master of Business Administration (Finance Option)