Credit Risk Management Practices, Social Capital and Loan Performance among UMRA Licenced Institutions in Uganda.
| dc.contributor.author | Bagambe, Lordson | |
| dc.date.accessioned | 2024-07-17T06:54:55Z | |
| dc.date.available | 2024-07-17T06:54:55Z | |
| dc.date.issued | 2023 | |
| dc.description | A Dissertation Submitted to Makerere University Business School (Faculty of Graduate Studies and Research) in Partial Fulfilment of the Requirements for the Award of Degree of Masters of Business Administration of Makerere University. (PLAN A). | |
| dc.description.abstract | Micro Finance Institutions in Uganda have established various credit risk management practices hoping to improve loan performance. However, with all these practices in place, MFIs in Uganda continue to register poor financial performance manifested by a high loan defaulting rate and poor portfolio quality (Performance Monitoring Tool 2016/2019). This study examined the mediating role of social capital in the relationship between credit risk management practices and loan performance of among UMRA licensed institutions. The study adopted a cross-sectional research design, combined with descriptive and correlational research approach. The study considered Micro Finance Institutions licensed by UMRA located in Kampala Wakiso and Mukono which constituted the population of study. The unit of analysis was MFIs and the units of inquiry were Credit officer or Supervisor or Money Lender. The population was 646 MFIs and a sample of 242 institutions was taken for this study. Completed and usable questionnaires were solicited from 197 respondents indicating 81.4% response rate. Data was analyzed through correlation coefficients and regressions using Statistical Package for Social Sciences (SPSS) V.23. The study found credit risk management practices (r= 0.431**, p<0.01), and social capital (r= 0.515**, p<0.01) have a positive and significant relationship with loan performance. The results also show that social capital mediates the relationship between credit risk management practices and loan performance. Based on the findings, it is recommended that strategic managers in MFIs need to take risk management as a priority, especially credit risks. They should be mindful of the short-run and long-run influence of credit risk on loan performance. Effective management of risks will enhance their performance and hence their ability to properly manage their assets and equity shareholders. Also, policymakers in government should formulate economic and financial policies with due cognizance of factors that can affect loan performance. This requires a holistic view to policy formulation to ensure that cost trade-offs are considerably minimized in all strata of the economy. | |
| dc.identifier.citation | Lordson, B (2023) Credit Risk Management Practices, Social Capital and Loan Performance among UMRA Licenced Institutions in Uganda. Unpublished Masters Dissertation Makerere University Business School. Kampala, Uganda. | |
| dc.identifier.uri | http://hdl.handle.net/20.500.12282/4832 | |
| dc.language.iso | en | |
| dc.title | Credit Risk Management Practices, Social Capital and Loan Performance among UMRA Licenced Institutions in Uganda. | |
| dc.type | Thesis |