| dc.description.abstract | This study analysed the effect of credit risk management on the performance of loan portfolio in
UGAFOD Micro Finance Ltd, Mpigi Branch. Specifically, the study reviewed the effect of credit
risk assessment on loan portfolio performance, the effect of credit monitoring on loan portfolio
performance and the effect of credit risk control on loan portfolio performance in UGAFOD
Micro Finance Ltd, Mpigi Branch. The study used a cross – sectional research design on a
sample of 360 respondents got from a total population of 11,750 clients. Data was collected by
use of questionnaire, interview guide, focus group discussions and observation and it was
analysed both quantitatively and qualitatively. The study findings revealed that credit risk
assessment affects the performance of the loan portfolio as it reduces the chances of loss by the
bank. Credit monitoring affects loan portfolio performance however, this has to be continuous,
the bank does not need to wait to begin monitoring when the client develops signs of inability to
repay. In credit risk management, credit risk control affects loan portfolio performance since;
administering the credit facility ensures orderly and full payment which helps the clients to be
able to fulfil their repayment requirements. The study concludes that there is need to find away
to improve service delivery through lower interest rates, extended payback period and flexing of
the strict credit risk management conditionality, product differentiation, customer segmentation
and improved information technology for more people to access the institutions services for
improved living standards. The study recommends that; banks need to strictly assess their clients
to eliminate Non Performing Assets. Credit monitoring should be vigilantly implemented for
better performance of the loan portfolio. Credit risk control needs to be fully implemented such
that clients do not forfeit their obligations to the banks. | en_US |
