Credit Risk Management

The practice of credit risk management is so challenging since it offers a relatively greater freedom and scope to bankers for deciding over matters related to loan portfolios. However, the prevalence of higher degree of freedom in the field of credit risk management is also accompanied by greater risks. This study is aimed to assess the credit risk management practices and challenges in the context of Awash International Bank, Mekelle Branch which is located in the capital of Tigrai National State, Mekelle. The rationale for undertaking this study is to enable Awash International Bank manage its credit risk effectively which determines its success and future survival. It is also equally important for financial institutions especially banks which are suffering from credit default problems. The study used both primary and secondary data. The secondary data were collected from clients’ files, report, directives, journal articles, and manual of the bank while the primary data were collected through semi-structured questionnaire and interview. Out of 164 target population for the study, 69 individuals were taken as a sample through stratified sampling techniques.