The Impact of Credit Risk Management on Commercial Banks Performance in Democratic Republic of the Congo (Published)
The main objective of this study was to find the impact of credit risk management on the financial profitability of the Congo’s commercial banks. The specific objectives were to find the effects of CAR and NPLR considered as independent variables on the performance of commercial banks while the dependent variables were ROE and ROA. We used commercial banks in the Democratic Republic of the Congo as a study population, and as a sample the four largest banks from 2009 to 2016. Using a fixed effects model specification a panel Estimate Generalized Least Squares regression was done on the data using E views software. Adopting a 5% non- directional test of hypothesis, the study found a capital adequacy ratio has statistically significant effect on commercial banks performance in Democratic Republic of Congo. For the second objective which was to determine the relationship between non-performing loans ratio and performance of banks, the study also concluded that NPLR has statistically significant effect on commercial banks. But we have remarked that there is a negative relationship between NPLR and ROE and ROA; and there is a positive relationship between the car and ROE and ROA. The results of the study reveal that banks with high capital adequacy ratios can better advance more loans and absorb credit losses each time they face it, especially in the context of Congolese banks where the uncertainty of reimbursement is high and thus record a better profitability.
Keywords: CAR, Commercial Banks, Credit Risk Management, NPLR, Profitability, ROA, ROE
A Stakeholders Perspective on the effect of e-Banking on Customer Satisfaction in Commercial Banks using Funnel Ranting Method (Published)
This study examines and explores the effect of e-banking on customer satisfaction in commercial banks. A sample of 500 respondents were selected from a population of 2500 to elicit their views and opinions on the factors responsible for e-banking and customers satisfaction. Such uses both qualitative and descriptive statistics to examine variables like; accessibility, reliability, safety, affordability and consistency using the Funnel Method and Likert Scale to conclude that electronic banking services are more effective in terms of speed and accuracy compared to the traditional counter service banking. However, the study findings showed that electronic banking services cannot always be dependable and reliable because of frequent break downs of the systems.
Keywords: Commercial Banks, Customer Satisfaction, Stakeholders, e-Banking, funnel ranting method
Functional Strategies and Performance: Empirical Evidence from Commercial Banks in Nakuru County in Kenya (Published)
Business environment is characterized by high turbulence in organizational performance. Functional strategies play a role as banks aim at customer retention, increased profits, increased sale volumes, efficiency and increased market share. The research established the effect of operational, marketing, finance and human resource management strategies on organizational performance. The study used descriptive research design with a target population of 205. Questionnaire was used to collect primary data which was analyzed using descriptive and inferential statistics with the help of Statistical Package for Social Sciences software. Findings indicated that operational, marketing, finance and human resource management strategies affected the organizational performance. The correlation between the operational strategies and marketing together with human resource management strategies was negative and insignificant. The correlation between operational and finance strategies was positive and insignificant. Operational, finance, marketing and human resource strategies were not significant to organizational performance. It is recommended that functional strategies be improved.
Citation: Ken Njogu and Kipkorir Sitienei Chris Simon (2022) Functional Strategies and Performance: Empirical Evidence from Commercial Banks in Nakuru County in Kenya, International Journal of Business and Management Review, Vol.10, No.4, pp.17-36
Keywords: Commercial Banks, Organizational Performance, Strategies.
Credit Management, Credit Policy and Financial Performance of Commercial Banks in Uganda (Published)
This study was carried out with the purpose of analyzing the effects of credit management on the financial performance of commercial banks in Uganda. Specifically, the study sought to establish whether there is a relationship between credit policy and performance, Capital Adequacy and performance and credit risk control and performance. In achieving the objectives assigned by the study, a causal research design was undertaken and that was facilitated by the use of secondary data which was obtained from published audited financial statements of commercial banks and the BOU annual supervision reports. The study used universal sampling techniques, where all banks licensed and operational in Uganda were selected, multiple regression was used. The findings indicated a significant relationship (r = 0.639) between credit management and the financial performance of commercial banks in Uganda. The coefficient of determination R² was 0;408 meaning that credit management indicators explain up to 40.8% of variations in the financial performance of commercial banks in Uganda. The results from the coefficients summary in the regression model indicate that the significance of coefficients of credit policy (LR), capital adequacy (CAR) and Credit Risk Control (NPL/TL) are -0.031, -0.555 and -1.005 respectively. It was therefore found that both the CAR and the NPL/TL are significant though have an impact at different significance i.e. capital adequacy and Credit Risk control have a greater impact compared to Credit policy (LR) on the financial performance of commercial banks in Uganda. It was established that there is no significant relationship between credit policy and performance of banks in Uganda, however, a significant relationship between the credit risk control, capital adequacy and the performance of commercial banks was established. It was recommended that should use a moderate credit policy as a stringent credit will undermine the financial performance. Moreover, commercial banks should seek to adequately control their credit risk by keeping lower their ratio of nonperforming loans which is the major determinant of commercial banks’ financial performance as shown in the study. The bank of Uganda should encourage banks in Uganda to use credit metrics model in controlling its risks
Keywords: Commercial Banks, Credit Management, Credit Policy, Financial Performance, Uganda
Effect Of Credit Management on Performance of Commercial Banks in Rwanda a Case Study of Equity Bank Rwanda Ltd (Published)
Credit management is one of the most important activities in any company and cannot be overlooked by any economic enterprise engaged in credit irrespective of its business nature. Sound credit management is a prerequisite for a financial institution’s stability and continuing profitability, while deteriorating credit quality is the most frequent cause of poor financial performance and condition. As with any financial institution, the biggest risk in bank is lending money and not getting it back. The study sought to determine the effect of credit management on the financial performance of commercial banks in Rwanda. The study adopted a descriptive survey design. The target population of study consisted of 57 employees of Equity bank in credit department. Entire population was used as the sample giving a sample size of size of 57 employees. Purposive sampling technique was used in sampling where the entire population was included in the study. Primary data was collected using questionnaires which were administered to the respondents by the researcher. Descriptive and inferential statistics were used to analyze data. The study found that client appraisal, credit risk control and collection policy had effect on financial performance of Equity bank. The study established that there was strong relationship between financial performance of Equity bank and client appraisal, credit risk control and collection policy. The study established that client appraisal, credit risk control and collection policy significantly influence financial performance of Equity bank. Collection policy was found to have a higher effect on financial performance and that a stringent policy is more effective in debt recovery than a lenient policy. The study recommends that Equity bank should enhance their collection policy by adapting a more stringent policy to a lenient policy for effective debt recovery.
Keywords: Commercial Banks, Credit Management, Equity Bank Rwanda
The Influence of Capital Adequacy Ratio on the Financial Performance of Second-Tier Commercial Banks in Kenya (Published)
Performance of most mid-tier commercial banks in Kenya has been fluctuating over the past few years. Meanwhile, some of them continue to post impressive results as majority report losses and others merge in order to remain sustainable. This situation points to financial performance affecting the mid-tier commercial banks in Kenya. The government, through the Central Bank of Kenya, introduced prudential regulations aimed at bringing sanity in the banking industry. This move led to closure of Dubai Bank and Imperial Bank while Chase Bank went under statutory management awaiting new investors. From this, an investigation was done on how Central Bank regulations influenced financial performance of second-tier commercial banks in Kenya. Based on the study, this paper explores how capital adequacy ratio influences financial performance of commercial banks in Kenya. The study was purely quantitative research and, therefore, correlation research design and descriptive research designs were used. The study was conducted in 14 second tier commercial banks in Kenya. It collected financial data from 2013 to 2016, considering that the regulations came into effect in 2013 from CBK and commercial banks websites. The data was sourced from Central Bank of Kenya after getting permission and approval from National Commission for Science, Technology and Innovation (NACOSTI). Data collected was analysed using descriptive and inferential statistics. Multiple Regression Analysis was used to test the study research hypothesis. Findings were presented through tabulations and graphical illustrations. Computed correlation showed that capital adequacy ratio had significant strong positive relationship (p<0.05) with financial performance of mid-tier commercial banks. In conclusion, it was found that capital adequacy ratio is among the main predictors of mid-tier commercial banks’ financial performance. It was therefore recommended that CBK needs to regularly monitor commercial banks by ensuring that they publish their quarterly results to the public. The investment regulators in the country such as the Capital Markets Authority (CMA), Kenya Banker Association (KBA) and Central bank of Kenya can use these study findings to understand the bottom line impact of bank regulatory requirements and in understanding banks decision on to its customers.
Keywords: Capital Adequacy Ratio, Commercial Banks, Financial Performance, Influence, Kenya
Macro – Micro Factors Affecting the Bad Debt of Commercial Banks in Ho Chi Minh City (Published)
Lending activities of commercial banks always contain risks and the possibility of arising bad debt is a clear manifestation of credit risk. Bad debt will have consequences not only to banking but also to the economic development in Vietnam. Therefore, taking the risk to take measures to prevent risks and to deal with losses is a necessary and effective way of banking credit in general and lending activities in particular. The study results showed that there were 250 credit managers who interviewed and answered about 12 questions. Data collected from July 2016 to April 2017. This study had been analyzed Cronbach’s Alpha, KMO testing and the result of KMO testing used for the next research of the regression. Managers’ responses measured through an adapted questionnaire on a 5-point Likert scale (Conventions: 1: Completely disagree, 2: Disagree, 3: Normal; 4: Agree; 5: completely agree). Hard copy and online questionnaire distributed among 5.000 credit managers of commercial banks in Ho Chi Minh City. In addition, two components affecting the bad debt of commercial banks in Ho Chi Minh City with significance level 5 percent and then the researcher has policies improving the business success of the commercial banks in Ho Chi Minh City in the future
Keywords: Bad Debt And Hutech, Commercial Banks, Ho Chi Minh City
FACTORS AFFECTING THE IMPLEMENTATION OF TOTAL QUALITY MANAGEMENT IN JORDANIAN COMMERCIAL BANKS FROM CUSTOMERS POINT OF VIEW (Published)
This research aimed at investigating the factors affecting the implementation of TQM in a sample of commercial banks in Jordan. The study used the questionnaire as a tool to collect data. The results showed that there are some defaults in the implementation of TQM in commercial banks in Jordan and some aspects of TQM were ignored and wrongly Implemented and this in turn affected customer care
Keywords: Commercial Banks, Conformance, Customers, Specification, Total Quality Management