JIMMA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

A RESEARCH ON THE ASSESSMENT OF CREDIT MANAGEMENT

(IN CASE OF DASHEN BANK JIMMA BRANCH)

PRESENTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR THE DEGREE OF ARTS IN ACCOUNTING

Prepared by: ID Center

ABUBEKER KASIM RU3099/13 JIMMA

AMARE MELESE RU2568/13 JIMMA

ABINET ALEMU RU1515/13 JIMMA

ADVISOR: MOHAMMED A.

APRIL,2015E.C

JIMMA,ETHIOPIA
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 TABLE OF CONTENTS
Contents Page i

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 Acknowledgement
The first and most great thanks given to God for made some body from nothing and helping one
in every aspect of our life.

Second, a great and pleasure hearted thanks given to our advisor MR.MOHAMED A. for
supporting ,advising, answering for every questions and for valuable suggestion that made this
work possible and also moral support during our stay the study.

Thirdly, a great hearted thanks given to Dashen bank manager for answering every questions and
for valuable suggestion that made this work possible and also moral support during our stay in
the study.

Finally, we are also great full in the staff member of Dashen bank Jimma branch which has
assisted we in giving the necessary data.

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 ABSTRACT
The paper is the result to the researcher project which would be at the Dashen bank share
company in jimma branch under the take of assessment of credit management practice one of the
key element in ensuring business success into build a strong and efficient credit management
practice organized an effective credit management system for safeguarding resources of
management at any organization cannot achieve its own objective regarding the credit goal. The
main objective of this study is to assess the overall credit question of the bank regarding the
existence and applicable of audit standards. Hence this research has come out with the major
trends with some correction action that the management credit activities of the bank. This study
was conducted on assessments of credit management system of the Dashen bank. In general this
research paper uses sequential and mixed methodology. During the collection of data was use
both primary and secondary data. Primary data was obtained through structured questionnaires
and interview. Secondary data sources were the selected: from annual report. The researchers
were uses a non-probability sampling (Purposive sampling) The questionnaire was distributed to
10 employees of the organizations and also use Qualitative and quantitative data was used for
analyzed and interpreted. This research paper briefly organized into four chapters. The first
chapter is introduction part. Chapter two consists of reviews of the related literature which
support the core idea of the study. The third chapter is the research design/methodology. The
fourth chapter has work plan and budget.

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 CHAPTER ONE
INTRODUCTION

1.1 Background of the study

Credit is a contractual agreement in which aborrower receives something of value now and
agrees to repay the lender at some date in the future, generally with interest .The term also refers
to the borrowing capacity of an individual or company (http;//www.investopedia.com)
Credit exploitation and banking to side by side in banks in their stages of development and are
always related to credit. It is particularly impossible to set one independent to other, to see the
important place of credit in the banking industry it is important to see how banks are evaluated in
the different parts of the world as early as 200bc Babylonian had developed a system of banks. In
ancient Greek and Rome the practices of ranting loans was ideally prevalence. Those of ranting
of credit by compensation and by transfer offer are found in Assyrian, phonation and Egypt.
Before the system attained full developments they have developed credit through compensation
(kiduelz,2006).
In today world banking is an important parts of every bodies life. They are one of the most
important financial institutions in developed as well as developing countries and crucial
functions of banking are providing credit. Commercial banks are the primary sources of credit
for any business and households and environment unit in other world credit becomes the
business of banks and primary basis on which banks quality and performance are justified
(Nouihtton 1992).
credit management of a bank is believed to be a good indicator of the quality of the bank. Credit
management is a perquisite for financial institutions stability and continues profitability. Credit
management from debtor point of view is managing finance especially debts so as to not have of
credit or lucking behind your bank credit management is a responsible that both the debtor and
the creditor should seriously take (http//:www.growth.com)
Credit management is to maximize the value of the firm by achieving at rode off between risk
and return. To achieve this basic goal the firm should be mange its credit in an effective manner
(Pare shsah).
Credit can be considered as heart of commercial banking business. In almost every commercial
bank, the majority of its asset holds in the form of loan and practices all of these face inherent
risk. Invading and assessing the risk factor involved in the bank loan portfolios are part of

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principle credit management concern. Credit management is the process of controlling and
collecting payments from customers. This is the function within a bank or company to control
credit policies that will improve revenues and reduce financial risks. A credit manager is a
person employed by an organization to manage the credit department and make decisions
concerning credit limits, acceptable levels of risk and terms of payment to their customers
(Edwards, 1990).
The credit managers are responsible for Controlling bad debt exposure and expenses, through the
direct management of credit terms on the company’s ledgers. Assessment of credit standing of
both new and existing customer.

Monitoring and control of customer balance. The finance that made available to borrowers or
customers in this manner is required to be collected by bank after a specific period of time. In
order to make effective collection, however, the bank is expected to establish efficient credit
management. It is worth mentioning that the credit management system that is designed in
adequately and applied improperly is one of the
possible cases which may expose bank to credit risk where the borrower might fail to pay the
loan on due date. The effective management of credit is critical component of a comprehensive
approach to loan term success of any banking organization. Currently, the Dashen bank offers
the following credit products: short term loan, medium term loan, long term loan, merchandise
loan and agricultural loan.
The beneficiaries of the bank credit facility are business people who are engaged in domestic and
foreign trade. In order to get loan these customers are expected to satisfy certain criteria which
are set by the bank. Also borrowers are obliged to provide the bank with accurate information
about their business. Finally the loan contract will be signed between the customer and the bank
as to release the required loan amount. A nonperforming loan is a loan is default or close to
being in default. Many loans become nonperforming loan after being in default for three months,
but this can depend on the contract ( According to IMF).a loan is nonperforming when payment
of interest and principal past due 90 days or more, or at least 90 days of interest payments have
been capitalized, refinanced or delayed by agreement of payments are less than 90 days overdue,
but there are other good reasons to doubt that payments will be made in full.

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Thus, in their day to day activities banks are under exposure to various types of banking risks
among which credit risk is this most imports one. Nonperforming loan can be considered as ones
of the major source of credit risk, where a borrower will fail, to meet his/her obligation in
accordance with agreed terms. The practice of credit management of the Dashen Bank of
Ethiopia assessed in particular from the point of view of the nonperforming loan which is a
potential credit risk area of the bank.

Hence, the purpose of this study is to assess the strength and weakness of the bank and system of
releasing of the credit oriented to costumer and to review different types of credit management of
Dashen bank Jimma branch.

1.2 Statement of the problem

Credit management is planning, organizing, administrating and processing of the source and
functions pertaining to the act of providing economic equivalent will be returned to the provider
in the future .It is about how loan processing, granting and disbursement and recoveries are
managed so that there is no impact on sides, creditor and borrower(Edwards,1990). Assessment
of credit management practice is good for successful of credit service given by the bank. Credit
is back bone of investment trade and other business activity. Managing and maintaining credit is
a common problem of banking industry due to the poor credit managing techniques which create
negative influence on the activity of the banking industry. On the other hand poorly managed
risks associated with nonperforming loans can lead to distress and failure of bank nonperforming
loan is the major risk that the bank faces. Nonperforming loan have adverse effect on the
profitability of the bank and liquidity of the bank. Moreover, the very nature of any banking
business is highly sensitive because most of its liability comes from deposits of its customers.
Bank uses these deposits to generate credit for borrowers, which in fact is a revenue generating
activity for the bank such credit creation

process exposes the loan provide bank to high default risk which might lead to financial distress
including bankruptcy. Dashen bank Share Company is the private bank playing an important role
in the country’s economy and social life. However, most private company faces poor credit
management and application of non performing loan in Ethiopia as it has been assessed through
preliminary studies (yigremachew,2008).implying that these loan losses have produced lower

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return to the bank and over all economy. thus,Dashen bank share company is one of the private
company in Ethiopia with regard The researcher aims to assess the credit management of the
bank which contribute to the nonperforming loans that are , inadequate applicant screening
criteria ,diversion of loan and poor credit follow-up that affect the loan recovery performance of
the Dashen bank. The researcher formulates the following guide line research questions.

1.3Research questions

• What mechanism is being used by the bank to give credit to its customers?
• What is the sequence of procedure for borrower whose payment is over due?
• What type of loan is advanced by the Dashen bank to the borrowers?
• What is the loan recovery rate from 2014 to 2015?

1.4 Objectives of the study

1.4.1 General objective

The general objective of the study is to assess the overall control of credit management of
Dashen bank of jimma branch

1.4.2. Specific objective

• To assess appropriateness of loans to customers granted by the Dashen bank
• To assess the time and system of recovering of the credit granted to customers
• To review different types of credit granted by the Dashen bank

1.5 Significance of the study

• The study helps the Dashen bank share company in Jimma branch to recognize its
weakness in the credit service and to take correct measures that enables to strengthen the
service.
• It is hoped that the finding and recommendation suggested in this study will be helpfull
for Dashen bank to identify problem areas and to solve it
• To make lesson and corrective measures for the bank itself
• As a reference for these who need to make a research on similar areas
• The study is helping the student researcher to have experience in conducting research
• It also help other service sectors( financial to solve problems of credit management)

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 1.6 Scope of the study
The research addressed different issues regarding the credit management and nonperforming
loan in Banking industry. The research takes specifically credit department of Commercial Bank
of Ethiopia as a model for practical consideration. Therefore, the study would discussed the
assessment of credit management the case of Dashen Bank of Ethiopia Jimma branch. analyze
the data and interpret the data with particular reference of Dashen bank for the last two year.
1.7 Organization of the Paper
The study consists of five chapters with subtitles. The first chapter deals with the problem and its
approach /introduction/, the second chapter contains review of related literature, in chapter three
methodology and chapter four includes presentation, analysis and interpretation of the study will
be deals with and the last chapter will present the conclusion and Recommendation of the study.
In addition, list of reference materials and sample of the questionnaire /interview/ would be
attached in the appendix.

CHAPTER TWO
Review of Related Literature

2.1 Meaning and definition of credit management

The word credit is derived from the Latin word credit which means to believe or trust. In
economics the term credit refers to a promise by one party to pay another for receive money or
goods or services received. It is a medium of exchange to receive money or goods on demand at
some future date. credit as the right to receive payment or obligation to make payment on
demand at some future time on account of the immediate transfer of goods[ R.Pkent].

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Credit can be considered as heart of commercial banking business. In almost every commercial
bank, the majority of its asset holds in the form of loan and practices all of these face inherent
risk. Invading and assessing the risk factor involved in the bank loan portfolios are part of
principle credit management concern. Credit management is the process of controlling and
collecting payments from customers. This is the function within a bank or company to control
credit policies that will improve revenues and reduce financial risks. A credit manager is a
person employed by an organization to manage the credit department and make decisions
concerning credit limits, acceptable levels of risk and terms of payment to their customers
(Edwards, 1990).
credit management of a bank is believed to be a good indicator of the quality of the bank. Credit
management is a perquisite for financial institutions stability and continues profitability. Credit
management from debtor point of view is managing finance especially debts so as to not have of
credit or lucking behind your bank credit management is a responsible that both the debtor and
the creditor should seriously take (http//:www.growth.com)

There are many definitions given for credit management by different scholars among these some
are here cited as follows. Credit management is implementation is and maintains assists of
policies and procedures to minimize the amount of capital field up in captors and to minimize the
exposures of the business brief (http//www.small business wa gov all)
Credit management from debtor point of view finances especially debates so as not to have of
creditors lurking behind your bank credit management is a responsibility that both the debaters
and the creditors should seriously take when its functions affectivity. Credit management serves
an excellent instrument for the business to remain functionality stable (http//:www.self
groth.com)

2.2.1 Types of credit

• service credit it is smoothly payment for utilities such as telephone, gas ,electricity and
water you often have to pay deposit and you may a lot charge if you payment is not one
time.

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 • Loans can before small or large amount and for short or long period’s loans can be rapid
in none lump sum. Or in several regular installment payments until the amount borrowed
and the finance charges are paid.
• Installment credit it is described as buying on time financing through the store or the easy
payment plan.
• Credit cards are issued by individual retail, bank, or business using a credit card
(http//www.or benes illcnoise all)

2.1.2.Future of credit
• Trust and confidence, trust is the fundamental element of credit. The leader will lend his
money or good s on the trust and confident that the borrowers or buyers well back the
money or price in time.
• Time element all credit transaction involves time element money is borrowed or goods
are bought with a promise to repay the money or pay the price on some future date.
• Transfer of goods and service credit involves transfer of goods and service by the seller
to the buyer on the ray back promise at the buyers on some future date.
• Willingness and ability. Credit depends in person willingness and ability to pay the
borrower money. In fact creditor depends on his character, capacity and capital. It is these
three co’s which a man’s credit depends.
• Purpose of credit for banks and financial institution gives large amount of credit for
productive purpose rather than for consumption purpose.
• Security in the form of property, goods silver, bones or shares on important element for
raising credit (www.abcom HYPERLINK "http://www.abcom.coop/". HYPERLINK
"http://www.abcom.coop/"coop)

2.1.3 Credit instrument

Credit play a significant role in modern business and that part is represented by credit instrument
some of the important credited instrument are
• Promiscuous notes:- the promiscuous note is the earliest type of another person specified
some of money by an aimed gives date usually which a year with three days of grace
• Bill of exchange or commercials bill: - a bill of exchange is an older drawn by the
creditors to the debtors instructing the latter to pay specified sum of money to the former

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 or to the bears or to his nominees. The payment is to be made after some fixed date
usually two days with three days of grace.
• Bank notes: - the central bank of country issues currency notes. All notes carry the
promise of the government of the central bank.
• Credit cards a recent addition to credit instruction is the issue of credit cards by banks.
Credit cards holders are allowed credit facilities by the concerned bank for a specific
period of time without any security form them.
• Check; - a check is an order on the bank written by the trawler who has deposit with that
bank, the pay on demand the stated sum of money to the person named in the check
cacique may be bears check or an order check or crossed check the bearer check can be
cashed by the payee 9 whose name appears on the check or by any other person who
holds it.
• Speculation:- speculation and credit expansion or contraction goes to gather when
speculative activity is high credit expands when speculators lose credit contracts.
• Economic development:- credit expands in developing country in which new banks and
financial institutions are being set up. Such institution provides credit to tiny, small
medium and large industries to agriculture etc in poor country which lack finances as
institution. The volume of credit is law because trade, business, agriculture etc are back
word.(http//www.abcom coop )
2.1.4. Significance of credit
Modern economy is said to be a credit economy credit vital is importance for the working of an
economy.
• Economical credit instruments economies the use of metallic company. They are chapter
them coinage.
• Increase productivity of capital credit increase the productivity of capital. People having
money deposited tin banks and with non bank financial institution which is lent to trade
and industry for productive losses.
• Covenant: - credit instrument are covenant made of national and international payment.
They help in transferring payment with little cost and without the use of actual money
from one place to other quickly.

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 • Internal and external trade: of a country to the above by facility payment quickly credit
helps in the explanation of internal trade and external trade of a country.
• Encourages investment: according to Keynes credit is the payment along which
production travels and those bankers provide facilitate to manufactures to produce full
capacity. The bank in case of a crossed change the amount of the change must be credit to
the account of the payee in this bank.
• Draft: a draft also called demand orate is the form of achieve and is an order of a bank to
its branch in authority for making payment of the amount specified into the person of
firm or organization.
• Hound: hound is an internal billet exchange which has been in use in India from ancient
times.
2.1.5. Factors influencing the volume of credit
Some time credit expands when borrowing and lending goon briskly. At other time credit
contracts when borrowing and lending two place slowly.
• Boom and recession: under boom condition when in duster and trade are expanding
because the in fenestrate is rising. They also know the money will be returned due to high
rate of profit in the industry.
But when there is recession the quality of credit contracts. Business man are not prepared to
borrow even thought the in tersest rate is law.
• Political condition: credit expands when there is political stability in the country.
Encourages investment in which increase the some and for credit on the other hand
political instability and insecurity of life and prosperity business and investment are
discouraged.
• Currency condition: the volume of credit expands or contracts depending up on the
currency condition of the country.
• Banking system: if the banking system is fully developed credit encourage investment in
the economy financial institution help mobilization selling of the people thrush deposits
bonds etc.
• Increase demand availability of cheap and easy credit the reuse the demand for goods
and service in the country. This leads to increase in the production of such durable
customer goods as rooter, vehicles, refrigerators, TV etc.

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 These vesicles standers of living of the people when they consume more goods and
service. Consumption loons by banking and non banking financial institution coupled
with the use of credit card have made these possible.

Bank risk management

Banking is the management of risk: banks accept strategies in terms of their risk return
characteristics with the gold of maxi making share holder wealth. In doing so banks recognize
that there are deferent types of risk and that the impact of a particular investment stratum on
share organization depends on the impact on the risk of organization.
Credit risk
Credit risk is the risk to earning and capital that an obligate may rail omit the terms of any
contract with the bank. It is usually associated with lone and investment but it can also arise in
connection with derivatives foreign exchange and other extension of bank credit.
Reputation
Reputation risk is the risk to earning or capital arising from negative public opinion of the bank.
Negative public opinion can arise from poor service failure to serve the credit needs to their
communities and for other reason .A recent survey revealed that consumer rank telephone
companies ahead of bank in terms of service. Regulation feared that negative public opinion
would contribute to also of market share and be a potential source of litigation.
Credit control
A central bank is basically different from commercial bank. The central bank does engage itself
in ordinary banking activities like accepting deposits and advancing loan to the public. It does
not aim at making profit like commercial rather it aims at controlling commercial bank and
implementing the economic policies of the government according to layers the central banks the
organs of the government that undertakes the major financial operation of the government.
Methods of credit control
Methods of credit control the central bank adopt two types of methods they are qualitative and
quantitative methods. Qualitative methods aim at control the use and direction of credit.
However quantitative methods are deeply discuss the following
Bank rate policy

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The bank rate or discount rate is the rate fixed. But the commercial banks at which if rediscount
first class bills of exchange and government secretes held by commercial bank.
Market operation
Open market operation is other method of credit control used by central bank. It refers to a sale
and purchase of secretes bills and bond of government as well as private financial institution by
the central bank.
Although banks fail for many reasons the single most important reason is bad loans. Banks of
coarse don’t have more bad loans. They make loans that go bad of the time the loans were made
the decision seemed correct. However unforeseen things in economic condition and other factors
such as interest rate socket changes in tax lows and soon have resulted in credit problems. Credit
is the primary cause of failures and it is the most visible risk taking bank manager.

Interest rate risk is the risk of earning and capital that market rate of interest may change
unfortunately. This risk arises from difference in timing of rate changes and the timing of cash
flows (repining risk) from things in the shape of the field curve (yield curves risk) and from
option values embed in the bank ( product option) increase in the market value of a bank’s assets
will tall with increases in the rest rate.
Operational risk
Operational risk also refers to as transaction risk is the risk to earning or capital arising from
problems associated with the delivery or derives of a product.
Liquidity risk
Liquidity risk is arise to earnings or capital related to a bank stability to meet its obligation to
depositors and the needs of borrowers by turning assets into cash quickly with minimal loss
being able to borrow fund when need and having fund available to execute profitable
crudities trading activates given the larger amount of bank deposit that must be paid on
demand or within a very short liquidity risk is of crucial importance in banking.
Variable reserve ratio Variable reserve ratio or regal minimum requirement as a method of
credit control was first suggested by Keynes in his treaties on money.
Selective credit control Are a means to regulate and control the supply of credit among
many its possible users and users. It does not affect the total amount of credit but the amount
that is used in particular section. (Www. Preservearticles.com)

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 Objectives of credit control
Credit control means to control the lending policy of commercial bank by the central banks.
Central bank control to achieve the following objectives:-
To establish the internal price level
One of the objectives of controlling credited is to establish the price level in the country.
Frequent changes in the prices adversely affect the economy inflationary trend need to be
prevented.

Establish of the rate of foreign exchange

With the change in internal price level exports and imports of the country are affected with price
falls export increase and import declines consequently demand for domestic currency increase
foreign market and its exchange rate rise in contraries in the domestic currency lends to decline
in Ethiopia and increase imports.(www.preservearticles.com)
To control business cycle
Business cycle is a common phenomenon of a country which leads to periodic fluctuation in
production, employment and price central can contract such cyclical fluctuation through
contraction of the bank credit during boom period and expansion of bank credited during
depression (www.preservearticles.com)
To meet business needs
According to business one of the important objective of credit control is the adjustment of the
volume of the credit to the volume of business. (www.preservearticles.com)
Classification credit loan
Pendey (1990) states the credit can be classified on the time, purpose, security lender and
borrower.
Time classification
A. short term loans: - it is expected that loan plus interest would be repaired from the
income received through the enterprise in which it was invested. The usual time to repay
such loans is year at most 18 month.
B. medium term loam:- where the return according from increasing in farm asset is repaid
over more than one production period. The usual repayment period for such types of loan is
from fifteen month to five years.

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 C. long term loans: - would normally very difficult to accumulate funds sufficiently to repay
the internal loans plus interest from income generated through assets in less than five years.
The normal repayment period for these loans. Therefore ranges from five to fifteen years or
in a few cases up to 20 years.
Purpose of classification
The purpose classification can facilitate the profitability of specific loan it proper report on
income and expense are kept. It also provides information about the destination of different
types of credit use which significantly influences the repayment capital of the former.
Security classification
The security classification obtained provides another basis for classification the loans. The
secure loans are advanced as against the security of the same tangible personal property such
as land, livestock other capital assets i.e. medium and low term loans.
Lender classification
Credit also classified on the basis of lender such as:-
• Institutional credit example cooperative loans, commercial bank loans and government
loans.
• Non institutional credit example professional and agricultural money lenders traders and
commission against relatives and friends etc

Borrower classification
Credit also can be classified on the basis of types of borrower (i.e. production or business activity
as well as size of business) such as crop farmers, dairy farms poultry farmers and rural artisans
etc. According to Koch (1995) also indicated in his bank different types of loans. These
includes:-
• Commercial loans: - bank lends large amount of manufacturing company’s service
companies. Farmers and security dealers and to other financial institutions. Because
many commercial loans finance current asset they include working capital requirement
short farm commercial loans. Seasonal working capital loans open credit lines asset based
loans etc.(KIDUELZ,2006)

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 • Real estate loans: - real estate loans can be highly superlatives however if banks lend
against property that do not generate predictable cash flows. Real estate can be classified
short term real estate loans and long term real estate loans. (KIDUELZ,2006)
• Agricultural loan and long term real estate loans: - agricultural loans are similar to
commercial bank and industrial loans in that short term credit finances seasonal operating
expense in this case these associated with planting and harvesting crops. Long term loans
finance livestock equipment and purchase the fundamental source of repayments is cash
flow from these livestock and harvested crops in operating expenses.( KIDUELZ)
• Consumer loans:- non marketing consumer loans different substantially from commercial
loans their purpose of finance education medical care and other expanses mass of these
loans have maturates from 1 to 4 years.( KIDUELZ,2006)

Credit evolution process

Credit security
Credit security is the use of statistical operational research and data mining models to determine
the credit risk of prospective borrowers. The credit score is number that is calculated by a credit
bureau or other company such as the Fair Isaac corporation Flco score that is used in making
credit decision and for another purpose. The most advantage of using credit scoring models are
that they reduce the cost of evaluating credit and increase the speed , consistency and accuracy of
credit decision. Credit scoring technologies are also used to assess risk adjusted profitability of
account relationships, for delinquency intervention for fraud detection and for other purpose.
They are widely used in making consumer loans, home mortgage loans and some commercial
banks. (KIDUELZ ,2006).

Consumer credit and home montage loans

Credit scores are based on the past financial performance of groups of borrower similar to the
one being scored. The models employ variables that are associated with default risk. Past due
payment debt load relative to income and employment status are expels of factors related to
customer credit and home montage loans. However under the equal credit opportunity all items
such as race, religion and sex are illegal to consider to such models. In general a high credit score
signal low credit risk. (KIDUELZ)

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 Credit rating
Credit rating is agencies such as standard and poor moody’s investor’s service Fitch and Duff
and Phelps provide credit rating that reflects opinions about the general credit worthiness of
debate and equity issuers in the capital markets. The rating also takes into account the type of
security collateral and other factor (paresh shah...) final management

CHAPTER THREE
3. Research Design & Methodology
3.1 Research design

Designing a research is making a road map to a study which leads all functions and steps
undertaken. Kothari (2004) defines research design as the conceptual structure with in which
research is conducted; and it consists of the blue print for the collection, measurement and
analysis of data. It is also a strategy of describing procedures about sample size, data sources,
means of collection & methods of data processing, analyzing and presenting based on available
time and resources. This study were design as a descriptive research method with qualitative and
quantitative data analysis approaches. The rational behind the selection of the design would that
it helpes the researcher to assess the credit management of Dashen bank of branch.

3.2 Data sources, types and methods of collection

In this study, both qualitative and quantitative data would used. The data would be obtained from
primary and secondary sources. The reason of using qualitative and quantitative data types will
gathers from primary and secondary data sources is to increase validity and reliability of the
research result. The basic tools/instruments during primary data collection system is structured
interview, questionnaires would prepare with open-ended and closed-ended questions for the
collection of qualitative and quantitative data from the respondents and The secondary data
sources collected from annual financial reports and documents.

3.3 Sampling technique and sample size

The number of employee in the organization is 80. From this number of employee 10 employees
are responsible in credit management, so purposive sampling technique would used to collect

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data. Because in this study there are small number of employees and the researcher to get fact
and real information.

3.4 Data gathering tools

In order to collect significant data from our participants, the researcher would used questionnaire
including open ended and closed ended questionnaires. Besides the researchers would used
document analysis as a tool for finding out valuable information.

3.5 Methods of Data Analysis and Interpretation

The data collected through structured interview, survey questionnaire and from annual report.
The quantitative data will analyze trough descriptive statistics such as percentages and tabular
representations. Whereas, the qualitative data will analyze by reading, understanding and
interpreting the raw data gathered from the respondents in to words.

After the data have been collected and edited, the researchers would used narrative and
interpretive techniques of data analysis. Onwards this analysis summary, conclusion and
recommendations would be drawn.

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 Chapter four

4.Work plan and budget plan

4.1 Work plan

The work plan of this research proposal is listed in the table below

Table1 the work plan of the research proposal

Number Activities January February March April May

1 Title
selection

2 Proposal
writing and
Review
Literature

3 Observation
study area

4 Data
collection

5 Data entry

6 Data
analysis

7 Submission
and
presentation
of research

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 proposal

4.2 Budget plan

The budget requirement of the study area is listed below.

Table2:- Budget breakdown of the research proposal

Number Items need Unit quantity Unit price day Total

price

1 Pen No 2 20 40

2 Pencil No 1 5 5

3 Paper No 20 2 40

4 Ruler No 1 10 5

5 Note Book No 1 50 50

6 Flesh disk No 1 450 450

7 Transport Km _ _ _

8 Print paper pages 20 3 60

9 Total 650

SOURCE of Budget: Own

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References

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