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Credit risk and bank performance: a Sub-Saharan African perspective

Author

Listed:
  • Adamu Yahaya
  • Fauziah Mahat
  • Aliyu Mamman

Abstract

Credit risk is one of the dominant risks that pose a great threat to the performance of banks. This study examines the effect of credit risk on the performance of banks in Sub-Saharan Africa (SSA). A total sample of 50 banks was drawn from six Sub-Saharan African countries which include Nigeria, Ghana, South Africa, Zambia, Kenya, and Tanzania from 2010-2018. A two-step system GMM is applied and the findings reveal a significant negative relationship between credit risk and bank performance in the SSA region. The risk committee has a significant positive impact on the performance of banks in the SSA region. Bank management is encouraged to embrace a modern and efficient credit risk management technique to have better control of the rate of credit risk experienced in banks.

Suggested Citation

  • Adamu Yahaya & Fauziah Mahat & Aliyu Mamman, 2024. "Credit risk and bank performance: a Sub-Saharan African perspective," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 14(2), pages 170-191.
    • Handle: RePEc:ids:afasfa:v:14:y:2024:i:2:p:170-191
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