The Effect of Credit Risk Management on the Performance of Selected Banks

The general objective of the study was assess the effect of credit risk management on the performance of selected banks in Ghana. Specifically, the study sought;

1. To identify the major sources of credit risk in the selected commercial banks.
2. To examine the types of credit risk faced by the selected commercial banks.
3. To identify the practices and policies put in place to check credit risk at the bank.
4. To establish the relationship that exist between credit risk management and banks performance.

The study was descriptive in nature. A total of two hundred and ten (210) employees were chosen as the sample for the study. Questionnaire were handed to these employees to give their respective views on the subject under review. Responses gathered were analyzed using SPSS. The first objective of the study was to identify the major sources of credit risk in the selected commercial banks. In analyzing the first objective, the study revealed that, inappropriate credit policies, poor governance and management control, government interference, poor loan underwriting, negligence in credit assessment, volatile interest rates, reckless lending and inadequate supervision by the central bank were the major sources of credit risks to the various banks.