ASSESSMENT OF CREDIT RISK MANAGENT SYSTEM IN ETHIOPIAN COMMERCIAL BANKS

The main objective of this study was to assess credit risk management system in Ethiopian banking industry<br> in Yirga cheffe city. The motive to limit this study in Yirga Cheffe City is the area known by yirga cheffe<br> organic coffee due to this reason there is high demands for loan to banks from different investors. Those<br> selected banks are Commercial Bank of Ethiopia Yirga Cheffe branch, Nib International Bank S.C, Bank of<br> Abyssinia S.C, Wegagen Bank S.C, United Bank S.C, and Debub Global Bank S.C. The researcher employed<br> purposive sampling technique. This is because it helps to ponder on people who are directly involving in<br> credit processing and administering. Besides, they can give appropriate and relevant information regarding<br> to the study. Hence, from total population of 150 and among those employees 50 participants (12<br> participants from Commercial Bank of Ethiopia Yirga Cheffe branch, 10 participants from Wogagen Bank<br> S.C, 8 participants from Nib International Bank S.C, 7 participants from United Bank S.C, 8 participants<br> from Abyssinia Bank S.C, and 5 participants from Debub Global Bank S.C) were involved in this particular<br> study from banks which listed above. Therefore, the researcher selected those 50 employees purposively and<br> they are worthy for getting an information related to the study. For the purpose of the study, both primary<br> and secondary data were used. Primary data collected through interview and questionnaires distributed to<br> the respondents that involve department managers and senior officers working on loan processing, such<br> involves loan officers, credit analysis, Credit follow-up and monitoring officers, relation managers and<br> recovery officers. Due to qualitative and quantitative nature of data that will be gathered, data analysis<br> would carried out using descriptive statistics by employing Statistical Package for Social Scientist (SPSS)<br> version 20. The descriptive analysis presented using statistical analysis such as frequencies, percentages,<br> means, mode and standard deviations. Based on the findings, most of the respondents agreed on the<br> appropriate credit administration, measurement and monitoring process, credit risk management practice,<br> appropriate credit risk environment, and adequate control over credit risk that are implemented in the<br> selected commercial banks in Ethiopia.