Credit Risk Management Practices of Rural Banks in Ghana

The study explores the credit risk management practices of Rural Banks in Ghana with reference to Adansi Rural Bank Limited. The justification for undertaking this study is to deeply investigate the practices, policies and to some extent the credit lending, monitoring and strategies for managing overdue loans as well as problems they face in this practice and to propose the possible solutions that will aid the rural banks to run their operations in the safest way, as credit is known to be the main stay of all banks. The ability of banks to adhere to policies, procedures that promote credit quality and curtail non-performing loans is a prudent measure to survive in a stiff competition in the banking industry. The study shows that Adansi Rural Bank Limited has adopted a couple of risk management practices which includes; thorough loan appraisal, use of collateral and checking the credit history of borrowers.