Assessment Of Performance Of Micro Finance Institutions In Credit Risk Management The Case Of Five Micro Finance Institutions In Addis Ababa

Risk is the fundamental element that drives financial behaviour of micro financerninstitutions. Financial Institutions, therefore, shou ld manage the risk efficie ntly tornsurvive in this highly un ce rtain wor ld. The future of mi cro finance in stitutions willrnundoubtedly rest on ri sk management dynamics. Onl y those micro finance institutionsrnthat have effic ient risk management system will survive in the market in the long run.rnThe effective manage ment of credit risk is a critical component of comp rehen sive ri skrnmanagement essent ial for long-term success of a micro finance in sti tution that is whyrna micro finance's success lies in its ability to manage a risk.rnThe st udy was tried to eva lu ate the performance sa mple mi cro finan ce in stitution s inrncredit ri sk managem e nt. To conduct this study the res ea rche r were employed mixedrnapproach and used que st ionnaires, interview and document ana lys is as a so urce ofrndata. The data obta in ed from diFferent so urce s were analyzed and presented thernfindings. In conc lu sion th e study were tries to seek to outline the components of anrneffective cred it ri sk management system and also were try to find the failure torneffectively manage credit ri sk contributed to a greater exten t to the micro financernin stitutions crisis.

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