Assessing Credit Management Practices in Savings & Loans Companies: A Case Study of First Allied Savings & Loans Ltd, Ksi

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November, 2015
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This study assessed the credit management practices at First Allied Savings & Loans Ltd and their effect on performance. The main objectives of the study were to identify the credit management practices at First Allied Savings & Loans and their effect on performance. This was against the backdrop of the increasingly risky nature of the financial landscape and the high incidence of non-performing loans due to the lack of well diversified and efficient strategies for credit delivery which has crippled a lot of financial institutions and plunged them into crisis. The descriptive survey method was used for the study. The sample size comprised of 33 respondents who were purposively selected in order to obtain the kind of data that was required for the study. Questionnaires were distributed in order to gather the primary data together with an interview guide. Secondary data was obtained from financial statements of FASL from 2009 to 2014 in order to conduct a cross sectional survey to reveal performance trends over the period. The research revealed that one of the hallmarks of the credit management practices of FASL was the client appraisal adopted by the institution which allowed for a comprehensive assessment of clients as well as identify any inherent risks. It was also discovered that the institution had a credit management policy in place and that it was effective in managing the credit risk associated with the credit granting processes and that if strictly complied with, helped reduced non-performing loans as well as improve the quality of loan portfolio. One major recommendation that was made was for management to put in place measures that would ensure the strict compliance of credit management procedures by credit sectional heads and loan officers as this was identified as a major setback to the quality of loan portfolio and secondly the need for more training programmes to be organized to sensitize the credit staff on modern trends in the credit granting process.
A Thesis submitted to the Department of Accounting & Finance, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Masters In Business Administration (Finance Option),