An Assessment of Credit Risk Management in Non- Bank Financial Institution: A Case Study of Selected Co-Operative Credit Union in Ghana

Abstract

The study sets out to assess the Credit Risk Management in the Non-Bank Financial Institution in Ghana. The case of selected Co-Operative Credit Union in Koforidua municipality. The study adopted both qualitative (case study) and quantitative methods respectively. A number of co-operative credit union was selected to gather data, which was acquired from answers obtained from our administered questionnaires. The population of the survey constituted the management and non-management staff and customers of the selected co-operative credit union. The data gathered for the study were analyzed using correlation and regression. It was discovered in the study that the Non-Bank Financial Institution (Co-Operative Credit Union) has been of much assistance to most businesses through the mobilization and provision of funds to enable them improve and expand their businesses. The researchers, however noted some constraints which, when eliminated, will enhance the development and survival of most businesses which seek financial assistance from these Non-Bank Financial Institutions to improve the Ghanaian economy. Among such constraints were; improper credit risk management, inappropriate approaches used in controlling loan default, to mention few.  The researchers have put forward useful recommendation for consideration in order to improve the credit risk management to the greater benefit of management, customers and the entire nation. Non-Bank Financial institution has been of much assistance to most industries and businesses through the provision of finance to enable them improving and expand their businesses. To also assess the credit policy written down by Non-Bank financial institution.it also ascertains the monitoring of loans granted to customers. Co-operative credit unions should put in facilities in place to educate the public on how customers and members can take advantage and improve upon their existing standard of living.

Keywords: Non-Bank Financial Institution, credit analysis, credit policy and decision, loan policy, monitoring, and loan losses (default and failures).