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Evaluating The Efficacy Of Credit Risk Management On The Financial Performance Of Finance Companies In Nigeria

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Credit risk has increasingly become an issue of interest to financial institutions in Nigeria. This paper seeks to establish the relationship between credit risk management and the financial performance of finance companies in the Nigerian financial sector. It seeks to examine the role of credit management tools in minimizing credit risks. 225 copies of questionnaire were administered to the employees of 15 selected financial companies. Regression analysis is used to ascertain the impact of credit management tools while correlation analysis is used to test the strength of relationship between credit risk management and financial performance of the companies. ANOVA is also used to compare the means of the obtained sample data. Findings show that credit management tools, credit rating techniques, and credit risk analysis are all very necessary in mitigating credit risks in the financial sector. It is recommended that finance companies should continuously strive to improve and update their credit risk management practices.

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  • Samuel, Faboyede, & Rachael, Ben- Agbo, & Opeyemi, Ajetunmobi, & Bolaji, Adejana,, 2020. "Evaluating The Efficacy Of Credit Risk Management On The Financial Performance Of Finance Companies In Nigeria," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 5(1), pages 193-220, January -.
    • Handle: RePEc:ris:jfaafi:0020
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