The study was focused on the assessment of credit provision mechanism of development bank of Ethiopia Arbiminch branch. To do so the researcher was used both primary and secondary data, among the primary data interview and questionnaire was used. Secondary data like development bank of Ethiopia Arbaminch branch credit manual, books and other documents was used. The study paper addresses an introductory statement of problem from total population of credit customers of development bank of Ethiopia Arbiminch branch by taking 100 samples through judgmental sampling. The collected data was analyzed and presented using descriptive analysis technique like tables percentages, pie chart, bar graphs. Finally based on findings the possible conclusion and recommendation was developed. The findings of the study indicated that the bank‘s lending procedure has a problem. Such as long processing time, limited loan amount, repetition of documents during renewal, time taking and misunderstanding with the customer as well as the problem on determine the value of collateral security.
Key words: Development Bank, credit, Ethiopia
Table of Contents
Back ground of the Study
Statement of the problem
Objective of the study
General objective of the study
Specific objective
REVIEW OF RELATED LITERATURE
RESEARCH DESIGN AND METHODOLOGY
DATA ANALYSIS AND PRESENTATION
Analysis of customers view
General Personal Information
Loan requested by customers
Getting the amount of loan request
Satisfaction of customers
Consultancy or advice service gives by the bank
Repayment of loan
Bank Follow – up and Supervision
Problem on credit provision mechanism of the bank
Loan Approval
Loan collection
CONCLUSION AND RECOMMENDATION
SUMMARY OF FINDING
RECOMMENDATION
References
Research Objectives and Themes
This study aims to assess the credit provision mechanism of the Development Bank of Ethiopia, specifically at the Arbaminch branch, to identify challenges in loan processing and their impact on bank performance.
- Evaluation of credit policies and selection procedures for applicants.
- Identification of key factors influencing loan approval decisions.
- Assessment of post-lending supervision and follow-up activities.
- Analysis of customer satisfaction regarding current credit services.
- Examination of the relationship between credit mechanisms and loan repayment performance.
Excerpt from the Book
Problem on credit provision mechanism of the bank
A round 25% of the total respondent expressed that there is problem on credit provision mechanism. But around 75% of them consider there is some problem on the part of the bank to identify the problem and attempt to give solution to identified problem. The dissatisfied customer expressed that the main problem on loan provision is the bank estate the collateral security in worming value. Those customers also expressed that they faced delay in getting loan service within a time. Therefore, this shows the branch’s lending provision has got a problem. According to the respondents the following problems filled. Long processing time, limited loan amount, repletion of documents during renewal, time taking and high interest rate and misunderstanding with the customer etc. their suggestions and comments about the lending procedures of the bank may revise credit provision mechanism and must have smooth relationship.
Summary of Chapters
Back ground of the Study: This chapter introduces the importance of credit facilities and the role of financial institutions in economic development, highlighting the balance between liquidity and profitability.
Statement of the problem: The chapter outlines the specific challenges the bank faces, such as default risks and the need for adequate credit appraisal to prevent financial distress.
Objective of the study: This section defines the primary goal of assessing the credit provision mechanism at the Arbaminch branch and lists the specific research objectives.
REVIEW OF RELATED LITERATURE: This chapter provides a theoretical foundation on banking, credit granting processes, and loan characteristics.
RESEARCH DESIGN AND METHODOLOGY: The chapter describes the descriptive research design and data collection methods, including interviews and questionnaires used for the study.
DATA ANALYSIS AND PRESENTATION: This section presents and interprets the empirical data collected from bank customers and management regarding credit provision, loan amounts, and satisfaction levels.
CONCLUSION AND RECOMMENDATION: This chapter summarizes the findings regarding systemic problems and provides actionable recommendations to improve lending procedures and supervision.
Keywords
Development Bank, Ethiopia, Credit provision, Loan appraisal, Collateral, Non-performing loans, Customer satisfaction, Risk management, Banking performance, Loan disbursement, Agricultural loan, Financial supervision.
Frequently Asked Questions
What is the core focus of this research paper?
The paper focuses on assessing the credit provision mechanism of the Development Bank of Ethiopia, specifically focusing on the Arbaminch branch.
What are the primary themes discussed in the study?
The main themes include loan selection policies, factors influencing credit granting, the effectiveness of post-lending supervision, and customer satisfaction with bank services.
What is the primary objective of this work?
The primary goal is to evaluate how the bank provides credit and to identify the challenges in the loan advancing procedure that affect the bank's income and profitability.
Which scientific methodology was applied?
The researcher utilized a descriptive research design, combining both qualitative and quantitative approaches through interviews with managers and questionnaires distributed to customers.
What topics are covered in the main body of the work?
The main body covers the theoretical background of credit, detailed data analysis regarding customer demographics, loan requests, satisfaction, and the specific problems identified in the bank's lending process.
Which keywords best characterize this study?
The study is best characterized by terms such as Credit provision, Development Bank of Ethiopia, NPLs (Non-Performing Loans), Loan appraisal, and Agricultural loan.
What did the study identify as the main operational challenges for the bank?
The study identified long processing times, limited loan amounts, recurring documentation requirements, and difficulties in accurately valuing collateral as significant challenges.
How does the bank's focus on agriculture affect its performance?
While the bank is deeply concentrated on agricultural loans to support national development strategy, the study notes that this concentration, coupled with weak supervision, contributes to collection issues.
- Quote paper
- Mekuanint Abera Timbula (Author), 2018, Assessment of Credit Provision Mechanism of Development Bank of Ethiopia. Case of Arbaminch Branch, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/452340
