Credit risk management, credit information sharing and loan portfolio performance among commercial banks in Uganda. A case study of bank of Africa Uganda ltd

Abstract

This study examined the relationship between credit risk management, credit information sharing and loan portfolio performance among commercial banks in Uganda, a case study of bank of Africa Uganda ltd. This study was a cross-sectional research and it adopted a quantitative approach. A sample of 152 employees constituting of branch managers, credit officers and credit supervisors was obtained from a total of 252. Data was obtained using a structured questionnaire instrument. Validity was ensured using expert judgment and content validity index (CVI). Reliability was obtained through pretesting and Cronbach Alpha Coefficients. Data was analyzed using SPSS V.25. Results were presented using frequency tables, correlation and regression analysis. The study obtained positive relationship between credit risk management and loan performance. The study established a positive relationship between credit information management sharing and loan portfolio performance. The study obtained that credit risk management and credit risk information sharing significantly predictors of variance in loan portfolio performance. This study further obtained that credit information sharing is the better predictor of loan portfolio performance than credit risk management. The study concludes that as financial institutions seek to stimulate loan portfolio performance, they should bear in mind that variables of credit risk management and credit information sharing are necessary and should not be taken for granted. Moreover, this research unveils that with emphasis towards credit information sharing, commercial banks will be in a better position to achieve better loan portfolio as opposed to risk management. This study recommends that; employees should ensure that customers provide them with credit information which is quality to facilitate realistic credit decisions; information timeliness must be enhanced; employees should intensify credit risk monitoring and control; and intensify risk assessment in order to stimulate loan portfolio performance.