A Preliminary Study on Credit Risk Management Strategies of Selected Financial Institution in Malaysia

2009 ◽  
Vol 28 ◽  
pp. 45-65 ◽  
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Institution ◽  
Management Strategies ◽  
Credit Risk Management ◽  
Risk Management Strategies ◽  
Preliminary Study

An Investigation of Credit Risk Management Strategies of Private Commercial Banks of Bangladesh

2014 ◽  
Vol 2 (2) ◽  
pp. 77-87
Author(s):  
Abu Hanifa Md. Noman ◽  
Md. Amzad Hossain ◽  
Sajeda Pervin
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Management Practices ◽  
Management Practice ◽  
Management Strategies ◽  
Third Party ◽  
Primary Data ◽  
Credit Risk Management ◽  
Risk Management Strategies

Objective - The study aims to investigate credit risk management practices and credit risk management strategies of the local private commercial banks in Bangladesh. Methodology -The investigation is conducted based on primary data collected from a set of both closed end and open end questionnaire from 23 out of 39 local private commercial banks in Bangladesh. Descriptive statistics has been used in processing the data and interpreting the results. Findings - The results reveal that credit risk management practice of the sample banks is sound which is attributed to the appropriate implementation of Basel II and credit risk management guidelines the country's central bank. The findings further show that use of Credit risk grading is most popular and effective criteria for measuring the borrowing capacity of the borrowers. In order to control credit risk and preventing losses from credit exposure banks give more focus on collateralization, accurate loan pricing and third party guarantee. Loan is monitored properly and credit reminder is given to the client if principal and interest remain outstanding for three months. The study further reveals that lack of experienced and trained credit officers, lack of genuine market information and Lack of awareness regarding non-genuine borrower are the most important problems of current credit risk management practices in Bangladesh. Novelty - To the best of the knowledge of the authors the study is the first that investigates credit risk management strategies of private commercial banks, especially on Bangladesh. Type of Paper - Empirical Keyword : Bangladesh; Commercial Bank; Credit risk; Credit risk management; Credit risk management strategies.

scholarly journals Impact of risk management strategies on the credit risk faced by commercial banks of Balochistan

2019 ◽  
Vol 5 (1) ◽  
Author(s):  
Zia Ur Rehman ◽  
Noor Muhammad ◽  
Bilal Sarwar ◽  
Muhammad Asif Raz
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Quantitative Data ◽  
Management Strategies ◽  
Capital Adequacy ◽  
Regression Analyses ◽  
Credit Risk Management ◽  
Capital Adequacy Ratio ◽  
Risk Management Strategies

AbstractThis study aims to identify risk management strategies undertaken by the commercial banks of Balochistan, Pakistan, to mitigate or eliminate credit risk. The findings of the study are significant as commercial banks will understand the effectiveness of various risk management strategies and may apply them for minimizing credit risk. This explanatory study analyses the opinions of the employees of selected commercial banks about which strategies are useful for mitigating credit risk. Quantitative data was collected from 250 employees of commercial banks to perform multiple regression analyses, which were used for the analysis. The results identified four areas of impact on credit risk management (CRM): corporate governance exerts the greatest impact, followed by diversification, which plays a significant role, hedging and, finally, the bank’s Capital Adequacy Ratio. This study highlights these four risk management strategies, which are critical for commercial banks to resolve their credit risk.

Management of Credit Activities and their Effects on Commercial Banks’ Credit Risk in Indonesia

2013 ◽  
Vol 6 (1) ◽  
Author(s):  
EMANUEL KRISTIJADI ◽  
UBUD SALIM ◽  
MADE SUDARMA ◽  
DJUMAHIR DJUMAHIR
Keyword(s):  
Risk Management ◽  
Moral Hazard ◽  
Credit Risk ◽  
Commercial Banks ◽  
Management Strategies ◽  
Process Quality ◽  
Management Process ◽  
Credit Risk Management ◽  
Risk Management Process ◽  
Risk Management Strategies

The financial institution in any nation has a potential role in the economy but it can also create the risks taken by the borrowers. This study seek to test the effect of policy and credit risk management strategies, quality of human resources, information technology intensity, and moral hazard of lending staff on the credit risk management process. This is positivist approach with qualitative information to support quantitative analysis using 83 respondents of commercial banks (excluding foreign banks), collected by means of questionnaires related to respondents’ perceptions with Likert scale. The analysis was done by using Generalized Structured Component Analysis (GSCA). Results showed that credit risk management olicies can improve credit risk management strategy formulation; credit risk management strategies improves credit risk management process quality; the intensity of high IT improves credit risk management process quality; the human resource quality can less improve credit risk management process quality; moral hazard less improves credit risk management process quality; and, the high quality of credit risk management processes can reduce credit risk. It can be concluded that credit risk management process has a significant effect on credit risk. The credit risk management policy and strategy, information technology, and moral hazard are needed to support such process.Keywords: Business and Management, credit risk, Generalized StructuredComponent Analysis (GSCA), Indonesia Commercial Banks, Indonesia

scholarly journals FINANCIAL RISK MANAGEMENT STRATEGIES AND THE GROWTH OF MICROFINANCE SECTOR IN KENYA

2017 ◽  
Vol 2 (1) ◽  
pp. 23-53
Author(s):  
Dr. James Rurigi Njuguna ◽  
Prof. Roselyn Gakure ◽  
Dr. Anthony Gichuhi Waititu ◽  
Dr. Paul Katuse
Keyword(s):  
Risk Management ◽  
Financial Risk ◽  
Management Practices ◽  
Management Strategies ◽  
Credit Risk Management ◽  
Financial Risk Management ◽  
Risk Management Strategies ◽  
External Sources ◽  
Internal Sources ◽  
The Relationship

Purpose: The purpose of this study was to investigate how financial risk management strategies lead to growth of MFI sector in Kenya.Methodology: The study adopted a correlation survey research design. The population of this study was fifty seven (57) MFIs. The sampling frame was the list of MFIs provided in the AMFI website www.amfikenya.com. A sample of thirteen (17) MFIs was selected using the random sampling approach. A questionnaire and an interview schedule were the main data collection tools. Qualitative data was analyzed using content analysis whereas the quantitative data was analysed using Statistical Package for Social Sciences (SPSS) where descriptive and regression analysis were conducted to determine the relationship between enterprise risk management strategies and growth of MFIs.Findings: The findings indicated that MFIs had effective financial risk management strategies such as effective credit risk management practices, liquidity risk management practices, interest risk management practices and price risk management practices. In particular, MFIs took into consideration the conditions, characters, capacity, collateral and capital of borrowers. Strict debt collection practices were widely adopted by MFIs. In addition, the concept of Know Your Customer (KYC) policy, seem to have been adopted by MFIs. The relationship between financial risk management strategies and growth was positive and significant. It also shown that sources of funds for MFIs include external sources and internal sources and the most frequently used source of funds are bank loans. The use of banks loans may present various risk exposures to MFIs, the most significant being interest rate risk. However, the ability of MFIs to source funds from various sources indicates that MFIs can apply the pecking order by first exploiting internal sources of funds since they present a lower financial risks and then move on to external sources. However, despite the financial risk exposure accompanied by leverage from external sources, MFIs may also benefit as they may experience higher growth driven by the leverage. It was also found that MFIs had put in place a number of good practices that had emerged to promote responsible and inclusive lending. These include loan size limits, standardized (simple) loan terms, zero tolerance on delinquency, group-based lending. This finding implies that MFIs have put in place effective credit risk management policies which are part of an overall financial risk management strategy. The existence of effective financial risk management practices may have influenced the growth of MFIsUnique contribution to theory, practice and policy: The study recommends that the MFIs to continue practicing effective financial management practices as this would improve the growth of MFIs.

The management of risk in a dryland environment

2011 ◽  
pp. 13-21
Author(s):  
D.I. Gray ◽  
J.I. Reid ◽  
D.J. Horne
Keyword(s):  
Risk Management ◽  
Service Providers ◽  
Management Strategies ◽  
Subterranean Clover ◽  
Farming Systems ◽  
Market Risk ◽  
Farm Size ◽  
Forage Crops ◽  
Risk Management Strategies ◽  
Upside Risk

A group of 24 Hawke's Bay hill country farmers are working with service providers to improve the resilience of their farming systems. An important step in the process was to undertake an inventory of their risk management strategies. Farmers were interviewed about their farming systems and risk management strategies and the data was analysed using descriptive statistics. There was considerable variation in the strategies adopted by the farmers to cope with a dryland environment. Importantly, these strategies had to cope with three types of drought and also upside risk (better than expected conditions), and so flexibility was critical. Infra-structure was important in managing a dryland environment. Farmers chose between increased scale (increasing farm size) and geographic dispersion (owning a second property in another location) through to intensification (investing in subdivision, drainage, capital fertiliser, new pasture species). The study identified that there may be scope for further investment in infra-structural elements such as drainage, deeper rooting alternative pasture species and water harvesting, along with improved management of subterranean clover to improve flexibility. Many of the farmers used forage crops and idling capacity (reduced stocking rate) to improve flexibility; others argued that maintaining pasture quality and managing upside risk was a better strategy in a dryland environment. Supplementary feed was an important strategy for some farmers, but its use was limited by contour and machinery constraints. A surprisingly large proportion of farmers run breeding cows, a policy that is much less flexible than trading stock. However, several farmers had improved their flexibility by running a high proportion of trading cattle and buffer mobs of ewe hoggets and trade lambs. To manage market risk, the majority of farmers are selling a large proportion of their lambs prime. Similarly, cattle are either sold prime or store onto the grass market when prices are at a premium. However, market risk associated with the purchase of supplements and grazing was poorly managed.

Retail Credit Risk Management in Indian Public Sector Banks

2012 ◽  
Vol 3 (8) ◽  
pp. 31-37
Author(s):  
Nayan J. Nayan J. ◽  
◽  
Dr. M. Kumaraswamy Dr. M. Kumaraswamy
Keyword(s):  
Risk Management ◽  
Public Sector ◽  
Credit Risk ◽  
Credit Risk Management ◽  
Public Sector Banks ◽  
Retail Credit
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