Browsing by Author "George William B Mutatina"

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    Credit policy and financial performance of commercial banks in Kampala, Uganda: a case study of Pearl Bank Uganda, Main branch
    (Uganda Christian University, 2026-04-17) George William B Mutatina
    This study sought to investigate the relationship between credit policy, such as interest rate policy, loan approval policy, and loan terms and financial performance of commercial banks in Kampala, Uganda, using a case study of Pearl Bank Uganda Main Branch. The study was undertaken using a quantitative approach with 43 respondents out of a target of 44 (98% response rate) and findings analysed using descriptive statistics. The findings of this study revealed that rigorous credit policy in evaluating credit applications reduces non-performing loans, and flexible loan terms positively relate to returns on assets and returns on equity of commercial banks in Uganda. The study findings also showed that respondents have a consensus on the efficient performance of commercial banks as a result of credit policy application. However, knowledge and application of credit policy could improve efficiency in performing credit functions and regulations. Additionally, workers reached a consensus on the effectiveness of credit policy in improving financial performance in terms of management of credit implementation and minimizing credit risk. However, comprehension and application of credit policy are not consistent in workers and therefore need improvement in financial health evaluation and revenue growth. The major findings include the following: the mean values for the results indicate that increasing interest rates increase net interest margins, though this may be at the expense of loan volume (mean = 3.80), and the criteria for approving loans, such as the LTV ratio, decrease default risk (mean = 3.58). The study recommends balanced credit policies to optimize profitability amid Uganda's 5.9% NPL ratio as of 2023 Furthermore, the research showed that approval criteria assure asset quality and that early reception is required to maximize working capital, improve profitability, and reduce the risk of default. The necessity for reliable information emphasizes the relevance of effective accounting in decision-making. Based on the findings, solutions include credit management through internet-based innovations, financial reporting through the use of computerized accounting packages, and training to improve financial management abilities in credit departments. These improvements may improve the commercial bank's financial performance and operational feasibility.