An Investigation of the Predictors of Credit Risk Among Ghanaian Rural and Community Banks

Abstract

Non-performing loans (NPLs) have attracted a lot of academic attention in recent times due to the devastating effects of credit risk on banks. This study investigated the predictors of credit risk in rural and community banks (RCBs), and the effects of rural banking in the Ashanti Region of Ghana. The study examined the correlation between credit risk as the dependent factor and a set of 8 systemic and nonsystemic factors of credit risk as independent variables. The systemic variables were GDP growth rate, interest rate, inflation rate and unemployment rate. The nonsystemic factors analyzed were branch network, total assets, return on assets and capital adequacy ratio. Secondary data was collected from 15 RCBs which were selected through purposive sampling, stratified random sampling and simple random sampling. The dataset ranged from the year 2008 to 2017. The study found that return on assets, branch network and size (total assets) were the significant unsystemic predictors of credit risk whilst interest rate, inflation and unemployment were the significant systemic predictors of credit risk in RCBs in Ghana. Furthermore, the study revealed that RCBs have had a considerable positive impact on the communities where they operated. Managers of RCBs must consider pursuing a strategy of branch expansion and improving the efficiency of staff because of the moderating effects of these factors on credit risk.

Keywords

• Credit Risk
• Rural and Community Banks
• Branch Network

Gana Kırsal ve Topluluk Bankaları Arasındaki Kredi Riskinin Belirleyicilerinin İncelenmesi

Abstract

Son dönemde, kredi riskinin bankalar üzerindeki yıkıcı etkileri nedeniyle, geri ödenmeyen krediler (NPL'ler) akademik ilginin odağı haline gelmiştir. Bu çalışma, Gana’nın Ashanti Bölgesi'ndeki kırsal ve topluluk bankalarında kredi riskinin belirleyicilerini ve kırsal bankacılığın etkilerini incelemiştir. Çalışmada, bağımlı değişken olarak kredi riski ile birlikte 8 sistemik ve sistemik olmayan kredi riski faktörü arasındaki ilişki incelenmiştir. Sistemik değişkenler olarak GSYİH büyüme oranı, faiz oranı, enflasyon oranı ve işsizlik oranı ele alınmıştır. Sistemik olmayan faktörler ise şube ağı, toplam varlıklar, varlık getirisi ve sermaye yeterliliği oranı olarak analiz edilmiştir. 2008-2017 yılları arasında, amaçlı örnekleme, tabakalı rastgele örnekleme ve basit rastgele örnekleme yöntemleriyle seçilen 15 RCB'den ikincil veriler toplanmıştır. Çalışmada, varlık getirisi, şube ağı ve büyüklüğün (toplam varlıklar) kredi riskinin önemli sistemik olmayan belirleyicileri olduğu, faiz oranı, enflasyon ve işsizlik oranının ise Gana'daki RCB'lerde kredi riskinin önemli sistemik belirleyicileri olduğu tespit edilmiştir. Ayrıca, RCB'lerin faaliyet gösterdiği topluluklar üzerinde kayda değer olumlu bir etki yarattığı ortaya konmuştur. RCB yöneticileri, bu faktörlerin kredi riski üzerindeki düzenleyici etkileri nedeniyle şube genişletme stratejisini takip etmeyi ve personelin verimliliğini artırmayı düşünmelidir.

Keywords

• Kredi Riski
• Kırsal ve Topluluk Bankaları
• Şube Ağı

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