ABSTRACTThis study therefore assesses credit risk management practices among rural banks in the Kumasi Metropolis using Odotobri Rural Bank as a case study. The objectives of the study were; to examine the processes of approval and recovery of loans of rural banks in the Kumasi Metropolis, determine credit risk management …
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ABSTRACTThis study therefore assesses credit risk management practices among rural banks in the Kumasi Metropolis using Odotobri Rural Bank as a case study. The objectives of the study were; to examine the processes of approval and recovery of loans of rural banks in the Kumasi Metropolis, determine credit risk management practices of rural banks in the Kumasi Metropolis and suggest solutions to challenges of credit risk management practices of rural banks in the Kumasi Metropolis. Primary source of data was used to gather data for the study. The study adopted the census sampling method to arrive at samples from the Credit Department, Operations Department, Customer Advisers and the Manager. From the study, management of Odotobri Rural Bank files legal actions against defaulted customers as loan recovery strategy. Also, management of Odotobri Rural Bank disburses credit to borrowers takes a short time once approved. Similarly, management of Odotobri Rural Bank used collaterals to monitor loan in most cases. It is recommended that the board and management of Odotobri Rural Bank should provide severe sanctions to credit defaulters who do not meet their obligations agreed upon to serve as deterrent to potential defaulters. Likewise, it is recommended that the board and management of Odotobri Rural Bank should not make collateral securities be the only method used to recover debts. Further study should be based on the causes of loan failures and the assessment of the behavioural and environmental aspects from both the lenders’ and borrowers’ perspective.
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