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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/8516

Title: Credit Risk Management of Banks in Ghana: A Case Study of Fidelity Bank Limited
Authors: Asiedu, Stephen Sadhartt
Issue Date: 6-Apr-2016
Abstract: Traditionally, banks in Ghana buy money, sell money and make money. Banks buy money by taking deposits from clients; sell money by making investments with the deposits mobilized by giving out loans and advances as well as investing in securities. The financial intermediation that the banks do carries significant elements of risk. Although Banks in Ghana are faced with numerous risks, one of the most challenging is the risk of default or credit risk. It has there become very prudent for banks to adopt steps or action points to comprehensively manage credit risk. The study investigated the challenges to effective management of credit risk, the development methods needed to risk of default whilst taking into account the steps that will mitigate it. The study was completed by finding out about some principles that would help banks in the credit operations. The study revealed that a strong relationship exists between management of credit risk and the following variables: little or no serious financial analysis, inadequate training of credit officers, low quality of assets, ignoring market risk, insufficient liquidity, weak corporate governance, inadequate capital adequacy, weak economic growth, lack of credit diversification and others. Since the above challenges If not properly handled will worsen the loan portfolio of the bank which will result in losses, some development methods such as training of credit officers, adopting a comprehensive strategy for credit operations, exchanging credit information with relevant institutions and other methods will help effectively manage credit risk. The study also found out that there are other measures to mitigate the risk of default. Some of the measures are reducing the interest charged on loans, monitoring loans, diversifying the borrower pool and invoking loan covenants. Finally, the principles investigated will help banks in their credit operations. The purposes of the principles are to stream line the banks‟ operations to reduce or avoid the risks, reduce losses and increase the profit. Whilst the banks will grow and be sustainable, shareholders wealth will surely be maximized.
Description: Submitted in partial fulfillment of the requirement for the award of Master of Business Administration degree in finance, 2015
URI: http://hdl.handle.net/123456789/8516
Appears in Collections:College of Arts and Social Sciences

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