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

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.

scholarly journals Applying ontologies to data integration systems for bank credit risk management

2018 ◽  
Vol Special Issue on Scientific... ◽  
Author(s):  
Jalil Elhassouni ◽  
Mehdi Bazzi ◽  
Abderrahim Qadi ◽  
Mohamed Haziti
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Bank Credit ◽  
Management Process ◽  
Credit System ◽  
Special Issue ◽  
Credit Risk Management ◽  
Integration Model ◽  
Risk Management Process ◽  
Credit Granting

Special ISSUE VSST 2016 This paper proposes an ontological integration model for credit risk management. It is based on three ontologies; one is global describing credit risk management process and two other locals, the first, describes the credit granting process, and the second presents the concepts necessary for the monitoring of credit system. This paper also presents the technique used for matching between global ontology and local ontologies.

Service Risk Management in Emerging Economies

2017 ◽  
pp. 90-115
Author(s):  
Yilmaz Akgunduz
Keyword(s):  
Risk Management ◽  
Emerging Economies ◽  
Management Strategies ◽  
Economic Structure ◽  
Management Process ◽  
Negative Effects ◽  
Developed Economies ◽  
Risk Management Process ◽  
Risk Management Strategies

The economies of countries face various risks depending on the environmental conditions. While some of these risks do not pose very serious negative effects on developed economies, they may be destructive on non-developed, underdeveloped or emerging economies. Risk management is accepted as a process for all economies. The risk management process starts with the determination of the risks, and goes on with the assessments of the risks, the determination of various strategies that may respond to the risks; and the application of the most suitable one from among these strategies. In risk management, in order to respond to the risk, emerging economies may select one of the methods like tolerating the risk (accepting it), managing it, transferring, eliminating or making use of its opportunities. In this chapter, the risk management strategies have been explained, examples are given from Turkey, which is has many characteristics of an emerging economic structure.

Service Risk Management in Emerging Economies

2018 ◽  
pp. 378-397
Author(s):  
Yilmaz Akgunduz
Keyword(s):  
Risk Management ◽  
Emerging Economies ◽  
Management Strategies ◽  
Economic Structure ◽  
Management Process ◽  
Negative Effects ◽  
Developed Economies ◽  
Risk Management Process ◽  
Risk Management Strategies

The economies of countries face various risks depending on the environmental conditions. While some of these risks do not pose very serious negative effects on developed economies, they may be destructive on non-developed, underdeveloped or emerging economies. Risk management is accepted as a process for all economies. The risk management process starts with the determination of the risks, and goes on with the assessments of the risks, the determination of various strategies that may respond to the risks; and the application of the most suitable one from among these strategies. In risk management, in order to respond to the risk, emerging economies may select one of the methods like tolerating the risk (accepting it), managing it, transferring, eliminating or making use of its opportunities. In this chapter, the risk management strategies have been explained, examples are given from Turkey, which is has many characteristics of an emerging economic structure.

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