Appraisal Of Effect Of Credit Management On Bank Profitability In Nigeria:- Iroka Peace U

ABSTRACT

The study appraised the effect of credit management on bank profitability in Nigeria from 1995 to 2017. Data used for the study was sourced from Central Bank of Nigeria Statistical Bulletin and Nigerian Deposit Insurance Corporation Annual Report. Bank profitability was proxied by return on assets while lending and credit management were measured by loans and advances, non-performing loans, lending rate and loan loss provision. The tool for data analysis was multiple regression based on Ordinary Least Squares technique. It was found that commercial banks loans and advances had a positive and significant effect on profitability, while non-performing loans ratio had a negative but significant effect during the study period. On the other hand, the effect oflending rate and loan loss provision were insignificant. Based on the findings, it was recommended among other things that commercial banks in Nigeria should strictly adhere to their credit appraisal policies which ensures that only credit worthy borrowers have access to loanable funds.