IMPACT OF CREDIT MANAGEMENT ON BAD DEBTS AND PROFITABILITY OF DEPOSIT MONEY BANKS IN NIGERIA
Abstract
ABSTRACT
This study examined the impact of credit management on bad debt and profitability of Deposit Money Bas in Nigeria. The study utilized secondary data from the annual report of the selected listed banks and multiple regression was used in testing the hypothesis. The analysis found that non-performing loans have a negative and significant effect on the bad debts of listed deposit money deposit banks in Nigeria, non-performing loans have a negative and significant effect on the Return on Assets of listed Deposit Money Banks in Nigeria. The study concludes that ineffective credit appraisal and recovery processes contribute to the accumulation of bad debts thereby constraining profitability and long-term sustainability. The study recommends among others that Deposit Money Banks should maintain strict credit management policies and effective loan strengthening credit appraisal procedures and regularly review borrowers’ repayment capacities and ensure timely recovery of outstanding loans.
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