CHAPTER TWO
2. LITERATURE REVIEW
2.1. Poverty in Ethiopia
Ethiopia is one of the poorest countries in the world with annual per/capital income of $ 170. The
United Nations development program’s human development report for 2007- 2008 ranked
Ethiopia as 169th out of 177 countries on the Human development Index the average life
expectancy after birth is 48yers. Infant, mortality and malnutrition rate are among the highest in
the world while access to education has increased in recent years, the overall adult literacy rates
is low compared to the sub- Saharan African standards roughly 44% of the population lives
below marked differences between rural and urban areas. Most rural households live on a daily
per capital income of less then$ 0.50
Generally, rural households have less access to most essential assessment, overall progress in
reducing poverty since 1992 falls short of what is required of meet 190G 1 by 2015 as result high
variability in agricultural GDP and rapid
(4)
CHAPTER THREE
3. METHODOLOGY
3.1. Study area
Hawassa Located in Siama Region, this town has a latitude and longitude of 7°0477′N
38.4958°0′E with an elevation of 1708 metres (5,604ft) above sea level. It is located about 275
kilometres by road from Ethiopia's capital Addis Ababa. Hawassa Airport with neighboring
shashemane. Ethiopian Airlines has a scheduled flight five times a week connecting it to the
capital Addis Ababa. Notable tourist attractions include the Hawassa lake.
3.2. The research Design
The study is focuses on the assessment of credit management on finance institutions in case of
Awach credit and saving Share Company in Hawassa
branch. The study will be used both qualitative and quantitative research approaches in order to
achieve the research objective.
3.3. Source of data
In order to get sufficient and relevant information for the study the researcher will use both
primary and secondary data. The primary data will be collected from customers, employees of
the institution and management on the current situation of the institutions and performance of
employee and secondary data will be collected from books, manuals and reports.
(13)
Chapter four
4.1 WORK PLAN in 2024
No
Activities Des Jan Feb Mar Apr May Jun
Summiting
Research Title
1 Draft proposal
writing
2 Questionnaire
preparation
3 Proposal
presentation
4 Submission of
proposal
5 Data collection
6 Data coding
and editing
BSTL COLLEGE HAWASSA
DEPARTMENT OF ACCOUNTING AND FINANCE
ASSESSMENT OF CREDIT MANAGEMENT FINANCE INTITUTIONS:
A CASE STUDY ACCOUNTING ON AWACH CREDIT AND SAVING
SHARE COMPANY ON HAWASSA BRANCH
RESEARCH PROPOSAL SUBMITTED TO TEACHER
MOHAMED ALI
FOR THE PARTIAL FULFILMENT OF THE REQUIREMENT OF
BACHELER DEGREE OF ART IN ACCOUNTING AND FINANCE (BA)
BY:
NATNAEL SOLOMON. E/159/14
SUBMITTED TO MOHAMED ALI
February -2024
HAWASSA/ETHIOPIA
Table of content
Chapter one.......................................................................................(1)
1. INTRODUCTION ............................................................................................................1
1.1 Background of the study ____________________________________________1
I_______________________________I_____________________________________II
1.2. Statement of the problem ____________________________________________2
1.3. Objective of the study ____________________________________________3
1.3.1. General objective _______________________________________________3
1.3.2. Specific objectives__________________________________________ 3
1.4. Significance of the study__________________________________________3
1.5. Scope of the study __________________________________________3
1.6. Organization of study _____________________________________________3
Chapter two
2. LITERATURE REVIEW_______________________________________________________4
2.1. Poverty in Ethiopia___________________________________________________4
2.2. Microfinance in Ethiopia__________________________________5
2.2.1. Micro finance as Anti- Poverty strategy _________________________5
2.2.2. The concept of micro financing and it’s objectives ______________6
2.2.3. Mechanism for screening defaulting defaulting___________________7
2.3. Credit management an over view __________________________________9
2.3.1. Presentation appraisal _________________________________9
2.3.2. Post sanction control __________________________________10
III
2.4. Credit policy system and procedures_____________________________10
2.5. Repayment Ethics _______________________________________________12
2.5.1. Over does management _____________________________________12
2.5.2. External factors _______________________________________________12
2.5.3. Internal factors ________________________________________________13
Chapter three I________________________________ III
3. METHODOLOGY_______________________________________________________13
3.1. Study area__________________________________________________________13
3.2. The research Design __________________________________14
3.3. Source of data __________________________________14
3.4. Sample techniques and sample size ___________________14
3.5. Method of data collection _____________________________14
3.6. Method of data processing____________________________14
3.7. Method of data analysis_______________________________15
Chapter four
4.1 WORK PLAN in 2024__________________________________15
4.2 Budget Plan__________________________________16
REFERENCES__________________________________17
IV
ABTRACT
The purpose of this study is to investigate the credit management of in finance institutions on
Awach credit and saving Share Company in Hawassa branch. The general objective of this study
is to examining the credit management of in finance institutions on Awache credit and saving
Share Company in Hawassa branch. In order to achieve this objective, the researcher employs
mixed research methods (Both quantitative and qualitative research methods will be used).
Descriptive research design will be used. In order to get sufficient and relevant information for
the study the researcher will use both primary and secondary data. Primary data will be
collected using structural interview from credit mangers because, to get relevant data and by
using questioners from customers and employees. In the questioners, the researcher will use both
close- end and open- end questions in such a way that they should generate important
information on credit management system of Awach credit and saving institution. The collected
data will be analyzed by using descriptive analysis method according, percentage and frequency
count will be analyzed and interpret the data collect form the sample respondent.
KEY TERMS: Credit management, finance, Institutions
II
1.3. Objective of the study
1.3.1. General objective
The main objective of the study is to examine the credit management in finance institutions in the case of Awach
credit and saving Share Company on Hawassa branch.
1.3.2. Specific objectives
To assess the activities practiced credit management of the institution.
To assess the effectiveness of polices and procedure the institution follows in providing loans.
To assess the methods of the institution uses to follow up loan.
To identify the monitoring mechanism used by the institutions to collect credit.
1.4. Significance of the study
The importance of this study is to enhance the competitive position of Awach credit and saving finance institution
by finding ways that improve the credit management system of the institutions. The researcher will also believes that
the result of this study will pave the way for the clients of the institutions, also for the institutions and additionally
serves as reference for other researcher. Also the study will provides additional knowledge to credit managers in
designing new credit management and for planning and controlling procedures in credit activities and it helps the
clients of the institution by informing necessity of paying credit according to agreements, in preventing un necessary
payments. Finally, the study will helps for further researchers as reference who want to conduct study on the area of
credit management of financial institutions particularly microfinance institutions.
1.5. Scope of the study
Because of no sufficient time and no enough budget to conduct study on wide area the study is limited to Awach
Micro finance institution of Hawassa branch geographically.
1.6. Organization of study
This research contains five chapters. The first chapter contains an introduction to the study which as different parts.
Background of the organization and the study; statement of the problem objectives of the study; significance of the
study; scope of the study; limitation of the study and organization of the paper. The second chapter contains
literature review on credit management. The third chapter contains methodology of the study. The fourth chapter
contains data analysis, interpretation,
(3)
The board of directors should have responsibility for approving and periodically reviewing the CR strategy
and significant CR policies of the institution. The strategy should reflect the lenders to learned for risk and
the level of profitability the institution expects to achieve for incurring various CR.
Senior management should have responsibility for implementing the CR strategy approved by the board of
directors and for developing policies and procedures for identifying measuring monitoring and controlling
CR such policies and procedures should address credit risk in all of the lenders activities.
Lender should identify and manage CR inherent in all products and activities new to them are subjects to
adequate procedures and controls before being introduced or under taken and approved by other board of
direction.
2.5. Repayment Ethics
In a country where a large proportion of people are very conservative and orthodox in their thinking, taking
loan form money lenders. Banks is considered to be grave risk. If person dies with out repaying his debts, his
sons and heirs feel their duty do so or the fathers soul will not rest in peace. Also, the father of non repayment
of debts due to exorbitant interstates, could lead to alienation of property rights (Danielk, 2010)
2.5.1. Over does management
Overdoes arise due to non payment of loan installments on due dates willful default is mainly due to the
inadequate and ineffective organization efforts of banks to receive dues. Clearly over does, can result form
external or internal factors. (IBID)
2.5.2. External factors
There are factors over which the banks have no operational or demonstrative control, such as: (Daniel K,
2010) .
.Natural calamites like foods, drought and earth quakes. . .Political
and government in interference cropping pattern changes not adopted by farmers.
. Cropping pattern changes not adopted by farmers.
.Costs of in puts and prices of farm produce with out price support.
2.5.3. Internal factors
There are factors related to organizational deficiencies and administrative ineffectiveness, such as (Daniek, 2010)
.reflective loaning policies procedures .
in effective supervision machinery over loab utilization.
Lack of efforts for recovery and inadequate system for recovery There
are other causes lending to loan over does, such as: lll .Under financing
/over financing. .In fructuous investments h
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LIST OF ACRONOMY
GDP: GROWTH AND DEVELOPMENT PROGRAM
MFIS: MICRO FINANCE INSTITUTIONS
