Abstract

The biggest objective of this research is to provide the investigated bank with an insight into its credit risk management framework and the effectiveness of the credit risk management practices at the development bank. In addition, the readers will also get familiar with the risks inherent in banking business, realize the importance of credit risk management in banks, and understand the facts about the Rwanda credit conditions The purpose of this work is to find out the evaluation of credit risk management in Rwanda banking sector a case study of BRD. The existing literature was reviewed to come up with the full idea of the study and with both primary and secondary data was obtained through BRD documentation and Reports, BNR guidelines and other relates documents. The collected data were analyzed and interpreted in line with objectives to have meaningful information. Purposive sampling techniques were used to select credit manager and operational credit risk manager from targeted department. We come up on the Introduction theories; however, is not the final aim of this thesis. In order to give out an evaluation of credit risk management practices, this thesis has tried to build a list of assessment criteria deriving from the literature that has been revised during the study. The criteria are grouped into four categories: credit culture, credit policies, credit organization & personnel and credit practices & performance. What the research truly cares about is to use those theories as the foundation for the evaluation the credit risk management actual implementation based on the established benchmarks. This dissertation has gone through those theoretical concepts to lead the readers to a much more practical section of the factual practices in the bank. We conclude that credit risk management has continuously been studied about and improved. Banks usually handle credit risk with a well-established credit culture showing their attitudes towards credit risk, a structured credit organization and firm personnel base, and a comprehensive set of policies governing credit activities in the whole group. As recommendations of this work the staff training quality must be critically revised. The bank should dig out whether the little effectiveness is due to the employees’ own perception or due to the bank’s implementation. If it is the latter case, it must be improved on the bank’s accord. When the credit staffs state that they do not believe the training sessions are of great support in their career, they must think if it is owing to their lack of enthusiasm. If the answer is yes, they must definitely change their attitudes, because the training indeed will help them gain knowledge and experience.