ASSESSMENT OF CREDIT MANAGEMENT PRACTICE IN COMMERCIAL BANK OF ETHIOPIA

Abstract

This study intends to assess credit management practice of the Commercial Bank of Ethiopia based on three basic dimensions namely adequacy of credit policy content, compliance of the actual credit activities of the bank against the formulated policy and the overall existing credit control practice of the bank. The research is designed as a case study on a single bank and a survey method was employed. Sources of both primary and secondary data were used. Questionnaire was used as a main instrument to collect primary data while secondary data were reviewed from different publications. Data was analyzed using SPSS 16.0 version and results are described based on statistical mean and standard deviation values. The findings of the study revealed that CBE has adequate credit policy with a good content as per the examining statements provided. Similarly credit activities of the bank are complied with the stipulated credit policy document more than the average level. On the other hand the overall credit control activities of the bank are performing in an average level. This implies that the bank is expected to strengthen its credit controlling practice as one of the basic credit portfolio management tool so as to avoid associated risks with ongoing credit activities.