Assessment Of Loan Recovery Performance Of Development Bank Of Ethiopia

The study examines the loan recovery performance of DBE. To achieve this objective the research methodology adopted both descriptive and analytical research design. Data was collected from primary and secondary sources. Primary data was collected by using questionnaire. A sample size of 73 respondents were taken from the bank’s credit process, project rehabilitation and loan recovery teams by using Simple random sampling method. Secondary data was retrieved from DBE Supervisory reports and also from DBE annual reports, bulletins, manuals, directives and procedures issued by the bank. In the study SPSS were used to analyze the data. The finding from the questionnaire revealed that rate of inflation; Gross Domestic Product and interest rate are the major macro-economic factors that affect the loan recovery performance of the bank. On the other hand malpractice of loan police and procedures, lack of close follow up, lack of skilled man power, and in adequate customer due diligence assessment are the major bank specific factors that lower the loan recovery performance of the bank. The researcher recommends that the bank should provide Loan advisory service before and after the loan, and the Bank should developed strong credit assessment and follow up to reduce the amount of NPL.

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