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AN ANALYSIS OF THE SUFFICIENCY OF CREDIT RISK MANAGEMENT FRAMEWORK IN THE BANKING SECTOR IN ZIMBABWE

Kunofiwa Tsaurai

DOI: 10.22495/cocv10i1c5art3

Abstract

The research investigates sufficiency of credit risk management policies of banks in Zimbabwe from 2000 to 2007 using the E-Views statistical software package. The regression model suggests that high non performing loans were due to inefficient management of the banks’ credit risk activities. An inverse relationship between non performing loans and credit risk management competency was also detected. The t-statistic for size of the bank was found to be closer to 1.5 and that shows the size of the bank has a bearing on both the level of non performing loans and the sufficiency of credit risk management frameworks. The author therefore recommends enough credit risk management frameworks be instituted in Zimbabwe banking sector to ensure financial sector stability.

Keywords: Zimbabwe, Credit Risk, Commercial Banks, Linear Regression Model

How to cite this paper: Tsaurai, K. (2012). An analysis of the sufficiency of credit risk management framework in the banking sector in Zimbabwe. Corporate Ownership & Control, 10(1-5), 515-520. http://doi.org/10.22495/cocv10i1c5art3

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