Impact of Credit Management on Non-Performing Loans in Nigerian Commercial Banks

  • Kayode David Kolawole University of Ilorin
  • Florence Olubunmi Osemene University of Ilorin
  • Muftau Niyi Ijaiya University of Ilorin
  • Adebayo Micheal Ajayi University of Ilorin



Banks occupy vital position in every economy which enhances growth. In spite of this, there exist corporate governance failure in banks that results largely from customers sophistication and non-performing loan. The study examines credit management and non-performing loans of commercial banks in Nigeria. Ordered probit regression was used test the impact of bank specific control measures on non-performing loans in Nigerian commercial banks and vector autoregressive model was employed to examine the impact of macro-economic variables on non-performing loans in Nigerian commercial banks. The result of the regression analysis revealed that monitoring of loans usage by borrowers has significant impact on non-performing loans at 10% level of significance. The study concluded that bank specific control measures have significant impact on non-performing loans in Nigerian commercial banks. Banks should therefore ensure that credit officers perform periodic follow-ups on borrowers to ensure that loans are used for intended purposes to reduce the incidence of non - performing loans.

Author Biographies

Kayode David Kolawole, University of Ilorin
Department of Accounting (Research Assistant)
Florence Olubunmi Osemene, University of Ilorin
(Accounting Department, Senior Lecturer)
Muftau Niyi Ijaiya, University of Ilorin
(Finance Department, Associate Professor)
Adebayo Micheal Ajayi, University of Ilorin
(Finance Department, Senior Lecturer



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How to Cite
Kolawole, K., Osemene, F., Ijaiya, M., & Ajayi, A. (2019). Impact of Credit Management on Non-Performing Loans in Nigerian Commercial Banks. KCA Journal of Business Management, 9(1), 1-19. Retrieved from
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