THE IMPACT OF CREDIT RISK MANAGEMENT ON PERFORMANCE OF MICROFINANCE BANKS IN AKURE, ONDO STATE

Abstract

The study examined the impact of credit risk management on performance of microfinance banks in Akure, Ondo State. The research design used in the study was survey research design where questionnaire was designed and administered to the staff of Moniepoint Microfinance Bank and LAPO microfinance bank in Akure, Ondo State, Nigeria. The sample size for the study was fifty. The study used chi-square as the statistical tool to analysis the hypotheses formulated. The result of the study showed that credit risk management impacts performance of microfinance banks in Akure, Ondo State. Specifically, credit risk appraisal, credit risk monitoring and credit risk mitigation impacts performance of microfinance banks in Akure, Ondo State. Consequently, it is recommended that an effective monitoring system should be implemented in microfinance institutions (MFIs) so that information regarding customers, credit risk exposures, collateral, and borrowers, is up to date.