Perceived quality of loan appraisal reports, relationship quality, mutual disclosure and loan performance: A case of Centenary Rural Development Bank

Abstract

The study sought to examine the impact of perceived quality of loan appraisal reports, mutual disclosure, relationship quality and loan performance of Centenary Bank. A sample of 637 respondents was selected using disproportionate stratified random sampling. Data collection was carried out using self administered questionnaires from the respondents. In particular, the study examined relationships between the study variables; perceived quality of loan appraisal reports, mutual disclosure, relationship quality and loan performance and found that all the correlations were significant and positive. The results from the regression analysis revealed that mutual disclosure and perceived quality of loan appraisal reports were strong predictors of loan performance. The absence of mutual disclosure, relationship quality and correct perceptions about the quality of loan appraisal reports at Centenary Bank attributed to the existence of poor loan performance. This is because a satisfied customer will provide a roadmap as regards the loan performance of the organization. Therefore, loan performance strategies should be designed to reflect organizational strategy, to realize the organization’s vision and strategic intent through developing the desired performance culture and values, innovation, risk-taking etc. To be comprehensive, any measure of performance evaluation must include not only contributions to organizational performance through measures of business success but must also include behaviors that are aligned with the business strategy.