Loan management and financial performance in financial institutions
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Date
2012-01
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Uganda Management Institute
Abstract
This was a case study on the effects of loan management on financial performance at Barclays
Bank Uganda Ltd with the objectives of examining the effects of loan pricing, loan vetting, loan
collection and competition on financial performance. A case study research design using both
quantitative and qualitative approaches was used on a population of loan staff and borrowers of
Barclays Bank of Uganda of which 181 were sampled using systematic and simple random
sampling. Quantitative and qualitative data was collected using a questionnaire, interview
schedules and a documentary checklist. The data collected was analyzed using SPSS of which
graphs, mean, standard deviation, correlation analyses and regression analysis techniques were
used. The study found out that correlation between loan pricing, loan vetting, loan collection and
competition on financial performance of BBU was 0.4, 0.5, 0.6, and 0.5 respectively while they
each predicted 16%, 23%, 45% and 17% of the variance in financial performance at the bank.
The study concluded that loan pricing, loan vetting and loan collection had significant impact on
the financial performance of the bank and that competition also had a significant influence on the
relationship between loan management and financial performance at Barclays Bank. The study
recommends that for sustained financial performance; the board, management and staff of
commercial banks should always ensure that the responsible persons effect reasonable loan
pricing, vetting, collecting while considering competition and making appropriate changes to
adopt to the industry competition. The bank’s management and responsible persons should also
educate customers on credit issues through customer promotions. The study recommends that
other studies need to examine the influence of loan product design and customer retention on
financial performance in the banking sector of Uganda.
Description
Keywords
Loan Management, Financial Performance, Uganda, Financial Institutions, Barclays Bank Uganda
Citation
Nabayiinda, Lydia Were (2012) Loan Management and Financial Performance in Financial Institutions: A case study of Barclays Bank Uganda