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Evaluating the Effect of Credit Collection Policy on Portfolio Quality of Micro-Finance Bank

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  • Esther Yusuf Enoch
  • Abubakar Mahmud Digil
  • Usman Abubakar Arabo

Abstract

This study evaluates the effect of collection policy on portfolio quality of microfinance banks in Adamawa State, Nigeria. Real data were collected from 51 credit officers, then a multi-stage sampling method was used to select a sample of 21 respondents from the population (i.e., 51 credit officers). In addition, we used regression analysis and descriptive statistics to analyze the data collected and to also test our proposed hypothesis. Based on the evaluation performed, the results showed that collection policy has a higher effect on portfolio quality. Hence, the study showed that microfinance banks should adhere to strict or stiff debt collection policy as strictness in collection policy help the banks to recover their loans, thereby improving the portfolio quality of the bank.

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  • Esther Yusuf Enoch & Abubakar Mahmud Digil & Usman Abubakar Arabo, 2021. "Evaluating the Effect of Credit Collection Policy on Portfolio Quality of Micro-Finance Bank," Papers 2105.10991, arXiv.org.
    • Handle: RePEc:arx:papers:2105.10991
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    References listed on IDEAS

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    1. Lawrence M. Benveniste & Alexander Ljungqvist & William J. Wilhelm & Xiaoyun Yu, 2003. "Evidence of Information Spillovers in the Production of Investment Banking Services," Journal of Finance, American Finance Association, vol. 58(2), pages 577-608, April.
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