Impact of Credit Risk Management Systems on the Financial Performance of Commercial Banks in Uganda

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F18%3A43914780" target="_blank" >RIV/62156489:43110/18:43914780 - isvavai.cz</a>

Result on the web

<a href="https://doi.org/10.11118/actaun201866061627" target="_blank" >https://doi.org/10.11118/actaun201866061627</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.11118/actaun201866061627" target="_blank" >10.11118/actaun201866061627</a>

Result language

angličtina

Original language name

Impact of Credit Risk Management Systems on the Financial Performance of Commercial Banks in Uganda

Original language description

The paper is set to analyse the impact of credit risk management on the financial performance of commercial banks in Uganda for a period of 2006-2015 using panel data for a sample of 20 commercial banks. The study employs return on assets as a dependent variable and non-performing loans, growth in interest earnings and loan loss provisions to total loans as credit risk measures. Secondary data is sourced from the Bank scope database, African development bank and the central bank of Uganda. The study employs descriptive statistics, regressions and correlation analysis. Regression models are to estimate the magnitude of significance of credit risk management on the performance of commercial banks in Uganda. The study revealed that credit risk management impacts on the performance of Ugandan commercial banks. The results portrayed that banks&apos; performance was inversely influenced by non-performing loans which may expose them to large magnitudes of illiquidity and financial crisis. Thus given such results, the researcher recommends that banks need to enhance their credit risk management techniques not only to earn more profits but also to maintain a qualitative asset portfolio and attention be given to non-performing loans, loan loss provision to total loans and growth in interest earnings that were found to be significant. Banks need to design appropriate credit policies that must handle all necessary conditions before advancing credit to their customers and also develop strong credit administration committees and teams that must conduct appropriate and sound loan appraisal evaluations and which must also monitor the loans throughout the required processes right from extending a loan to a customer up to the completion of loan repayments so as to mitigate credit risks.

Czech name

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Czech description

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Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

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OECD FORD branch

50206 - Finance

Project

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Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2018

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis

ISSN

1211-8516

e-ISSN

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Volume of the periodical

66

Issue of the periodical within the volume

6

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

9

Pages from-to

1627-1635

UT code for WoS article

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EID of the result in the Scopus database

2-s2.0-85060699363