Strategies for effective management of loans: A case study of keystone Bank plc

Authors

  • Michael Emedo Obafemi Awolowo University Ife

DOI:

https://doi.org/10.53402/ajebm.v3i1.403

Keywords:

Keystone Bank, Loan Management, Structured Questionnaire, Credit Loan, Loan Strategies

Abstract

In this study, strategies for effective loans management using keystone bank plc as a case study was investigated. Survey research methodology was adopted via structured questionnaire containing both open and closed ended questions administered to 120 respondents who were management staff of Keystone bank at both head and corporate offices. Likert scale was used in the questionnaire formulation and Hypothesis was tested using chi square at 0.05 level of significance. The result revealed that corporate loan portfolio diversifications is the most effective technique of loan portfolio management. Also, preference function allows banks compare risky portfolios and rank them according to the degree of satisfaction. Problems encountered with management of loan portfolio were identified to include insider abuse, increased perception of risk regarding the solvency of other banks within the banking system and anticipated decline in the value of the collateral used by the banks to secure the loans. The result obtained indicated that there is significant relationship between loan portfolio management and productivity. It is recommended that Keystone bank should focus on exposure assessment involving the credit review and a valuation of the collateral based on the data provided by the credit applicant. Also, effective risk management based on the risk regarding the solvency of other banks within the banking system should be implemented. Adequate provisions for bad loans that have very little chance of being recovered should be provided. In conclusion, there is significant relationship between loan portfolio management and productivity.

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Published

2024-03-17

How to Cite

Emedo, M. (2024). Strategies for effective management of loans: A case study of keystone Bank plc. Asian Journal of Economics and Business Management, 3(1), 477–486. https://doi.org/10.53402/ajebm.v3i1.403