Assessment of Loan Portfolio Quality at Housing Finance Bank (U) Ltd
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Date
2023
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Makerere University Business School
Abstract
The study's purpose was to assess loan portfolio quality. The study's objectives were to examine the level of loan portfolio quality, to identify the challenges to improve loan portfolio quality, and to provide strategies to improve loan portfolio quality. In order to gather information from a sample of 61 staff, the study used a self-administered questionnaire with closed-ended questions. Data analysis was done with SPSS version 23.
According to the study's findings, the level of loan portfolio quality was moderate. The most emphasized was the increasing non-performing loans and portfolio at risk were worst aspects of loan portfolio quality. The study indicated that challenges do existed in improving loan portfolio quality such as poor credit scoring and monitoring procedures, existence of COVID 19 caused cash flow interruptions, high default rate among the existing clients, multiple borrowing by clients, high interest rates on the existing loan products, lack of specialized training programs specifically in credit management, poor skills by staff in credit management among others.
The study further recommended suggested strategies for improvement of loan portfolio quality like need to implement credit restructuring decisions such as loan rescheduling, interest
amortization and credit reliefs, design effective training modules to advance the knowledge and skills of credit staff, recruit experienced staff in loan recovery management, institute appropriate
internal policies and procedures, establishment of a specific business unit specialized in the management of NPLs, design market driven loan products, charge affordable interest rates, and develop cost effective and efficient management strategies and policies.
Description
Research Dissertation Submitted to Makerere University Business School (Faculty of Graduate Studies and Research) in Partial Fulfilment of the Requirements for the Award of the Degree of Master of Business Administration of Makerere University. (Plan B).
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Citation
Evelyn, N. (2023) Assessment of Loan Portfolio Quality at Housing Finance Bank (U) Ltd. Unpublished Masters Dissertation Makerere University Business School. Kampala, Uganda.