TITLE:
Credit Risk Management Practices and Performance of Commercial Banks in South Sudan
AUTHORS:
Maurice Olobo, Gerald Karyeija, Protazio Sande, Steven Khoch
KEYWORDS:
Credit Risk Identification, Credit Risk Assessment, Credit Risk Control, Asset Book
JOURNAL NAME:
Journal of Financial Risk Management,
Vol.10 No.3,
September
13,
2021
ABSTRACT: The study was set to examine the extent to which
Credit Risk Management Practices influence banks’ performance in South Sudan. Credit Risk Management practices were looked at in
terms of Credit Risk Identification (CRI) Credit
Risk Assessment (CRA) and Credit Risk Control (CRC). The study applied a
cross-sectional survey design with 124 respondents linked
to the Credit process across 7 sampled banks in Juba. Cluster, purposive and
sample random techniques were employed in gathering data using Structured
questionnaires and interview guides. The study revealed a strong positive
correlation between risk management practices and bank performance (r = 0.959; p-value = 0.000 which is less than
0.01). Credit Risk Assessment (CRA), Credit Risk Identification and Credit Risk
Control all revealed significant results at r = 0.932 at p-value = 0.000; r = 0.977 at p-value
= 0.000. The study further revealed that a unit increase in CRI and CRA and
CRC, increased bank performance by 35.8%, 25.3% and 37.1% respectively. While
CRI = (β = 0.358 and p = 0.000) and
CRA (β = 0.253 and p = 0.000) seamed to drive growth of the asset book, CRC influenced Asset Quality
by (β = 0.371 and p = 0.000).