Debt management in commercial banks: a case study of Post Bank Uganda Limited

Abstract

The main objective of this study was to evaluate debt management practices in commercial banks in Uganda, while the specific objectives were; i) to assess the effectiveness of loan rescheduling mechanisms in debt management, ii) to investigate debt management challenges faced by commercial banks, and iii) to explore strategies for improving debt management practices. This study adopted a case study research design, focusing on Post Bank Uganda Limited. The findings indicated that loan rescheduling mechanisms were moderately effective in debt management, while high interest rates, harsh repayment terms, and lack of flexibility in repayment schedules were significant debt management challenges. The study recommends that commercial banks in Uganda should review their interest rates and offer more flexible repayment schedules to improve debt management. This study had some limitations, including its focus on a single commercial bank, which may limit the generalizability of the findings to other commercial banks in Uganda. Additionally, the study relied on self-reported data, which may be subject to bias. Future research could expand on this study by investigating debt management practices in other commercial banks in Uganda or exploring the impact of debt management on financial performance. Moreover, a comparative study between different commercial banks could provide more insights into the effectiveness of debt management practices in the banking industry. The study's findings contribute to the development of more effective debt management practices in commercial banks in Uganda, and have implications for policymakers, bank managers, and customers.

Subject Keywords: Debt management; commercial banks; Post Bank Uganda Limited