Effects of Credit Risk Management on Loan Repayment Performance of Commercial Banks in Tanzania. Analysis of Commercial Banks in Dar es salaam and Zanzibar.

Semboja,, Raphia (2024) Effects of Credit Risk Management on Loan Repayment Performance of Commercial Banks in Tanzania. Analysis of Commercial Banks in Dar es salaam and Zanzibar. Masters thesis, The Open University of Tanzania.

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Abstract

The study intended to investigate the influence of credit policies, debt collection process, risk identification process and credit scoring on loan repayment performance of commercial banks. The target population was credit risk management managers of the registered commercial banks in Tanzania working at the head office with a sample size of 34 respondents drawn using purposive sampling. Primary data was collected by use of 5 point liker scale questionnaires. A reliability test was done by using Cronbach Alpha method. Analysis was done by quantitative techniques. Quantitative analysis included the use of tables. The data was then analyzed using descriptive statistics and inferential statistics. Results indicated that organizations credit policies have a positive and significant effect on loan repayment performance of commercial banks. Also, results showed that risk identification process includes risk-ranking components where these ranking are usually based on impact, severity or dollar effects. The results also show that risk identification process by commercial banks has a positive and significant effect on loan repayment performance. It was recommended that banks should have stringent credit appraisal techniques. Key words: Credit risk management, Loan repayment performance, fully fledged bank, Tanzania.

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