Theses and Dissertations Collection

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Browsing Theses and Dissertations Collection by Author "Mwedadi, Nassib"

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    Impact of credit on the performance of Banks and other Financial institutions, A case study of Kilimanjaro Co­ operative Bank limited
    (Sokoine University of Agriculture, 2008) Mwedadi, Nassib
    This study investigated the impact of credit on the performance of financial institutions focusing on the Kilimanjaro Cooperative Bank Limited (KCBL) in Moshi Municipality, Kilimanjaro Region. Tanzania. The researcher interviewed the Bank Manager, credit officer, and the Management board. He also obtained valuable information through reviewing relevant documents (reports and credit documents). The information was analyzed using a simple impact assessment approach. The study revealed that KCBL is poorly performing on account of unsatisfactory asset quality attributed to poor loan administration, unsatisfactory earnings and credit management as loans. On the other hand the study also revealed that the bank was performing well in terms of extending loans and overdrafts to many borrowers to cater for inputs acquisition and other expenses. The total gross loans amounted to TZS 3,351.06 million and were extended to various sectors including Agriculture (28.37%), Education (12.62), Transport & Communication (12.13%), Trade (10.75%). and manufacturing (8.22%) Hotels & Tourism (6.45%). Personal loans (6.36%). Real Estate and Construction (5.63%), Health (4.87), Fishing (3.05%) and the remaining (1.49%) were on insurance and finance. The Bank faced various risks ranging from financial and non-financial risks. KCBL has several systems in place which include various management and board committees to address credit risk. The study also found out that the KCBL did not have an approved credit policy manual for its day to day lending activities making it difficult to abide by the best practices of credit management. It is therefore suggested that the bank should prepare a credit policy to act as a blue print in credit management. The study also recommends s that there should be both English and Swahili versions of the contract documents so that indigenous borrowers can comprehend these documents easily