Browsing by Author "Tamale, Joseph"

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    Credit Risk Management, Loan Portfolio Quality and Financial Performance Within Regulated Financial Institutions in Uganda.
    (2023) Tamale, Joseph
    Purpose: This study aimed at examining the relationship between credit risk management, loan portfolio quality and financial performance within regulated financial institutions in Uganda. Design/Methodology/Approach: The study adopted a cross sectional research design with a quantitative research approach. A sample size of 30 financial institutions which included 22 commercial banks, 4 licensed credit institutions and 4 licensed MDIs in Uganda was used. Primary data was obtained from credit managers, finance managers, credit supervisors and risk managers using a structured questionnaire instrument which was self-administered. Validity of the instrument was obtained using CVI and reliability using Cronbach Alpha Coefficient. Data was analyzed using SPSS (v.25) to obtain descriptive and inferential statistics used in the interpretation of findings. Findings: The study found a positive relationship between loan portfolio quality and financial performance. The study also found a positive relationship between credit risk management and financial performance. Furthermore, the study found that jointly credit risk management and loan portfolio quality were significant predictors of financial performance among financial institutions in Uganda. The study further found that the loan portfolio quality was a better predictor of financial performance among financial institutions. Research Limitations/Implications: The study concluded that credit risk management and loan portfolio quality management are inevitable. The study observed that as far as financial performance is concerned, more effort should be directed towards the quality of the loan portfolio. Like any research, this study faced limitations of; limited response; the target respondents’ titles were not synonymous in all institutions and the subject matter was highly sensitive. Practical implication: The study acknowledges that lending is the prime business for all financial institutions. Accordingly, failure to manage and control the prime source of revenue would expose the business to high business risks. The study therefore recommended that financial institutions adopt strict lending policies; prudent lending and strict loan recoveries; loan diversification; continuous delinquency meetings; and regular follow-ups. Originality/Value: This research is unique since it established the relationship between credit risk management and loan portfolio quality towards financial performance in a single study unlike most studies which have focused on the influence of one variable.