Research Article


DOI :10.26650/JEPR1012975   IUP :10.26650/JEPR1012975    Full Text (PDF)

Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis

Emerson Abraham JacksonEdmund Tamuke

This study assesses the nexus between credit risks and performance of commercial banks in Sierra Leone using data collected from the Bank of Sierra Leone (BSL) on relevant Financial Soundness Indicators like ROA, Bank Liquidity, NPL, and Credit over the 2008Q1-2018Q4 period. Evidence from (unbalanced) panel data estimation within the fixed effects model shows that the fragility of the banking system stems from high NPLs. We further provide evidence that a low productive base in the domestic economy influences the state of high NPLs in the banking system. The study revealed the need for collaboration between the research arm of monetary policy and financial stability departments in a bid to monitor risk in the financial system, which the entire banking system experienced around 2015-2017 that resulted in stringent measures adopted by the BSL to rescue the two state–own commercial banks. Equally, vigilant approaches should be explored by the BSL authority that leads to (positive) structural changes in banks’ approach to improving efficiency while at the same time minimizing continued risks to high NPLs and many more. The study finally recommends that ROA and ROE be adopted as independent indicators by the regulatory authorities to effectively monitor performances across the banking industry, as this would help monitor unexpected shocks in the banking system. 

JEL Classification : G21 , G28 , G32

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APA

Jackson, E.A., & Tamuke, E. (2022). Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis. Journal of Economic Policy Researches, 9(1), 139-164. https://doi.org/10.26650/JEPR1012975


AMA

Jackson E A, Tamuke E. Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis. Journal of Economic Policy Researches. 2022;9(1):139-164. https://doi.org/10.26650/JEPR1012975


ABNT

Jackson, E.A.; Tamuke, E. Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis. Journal of Economic Policy Researches, [Publisher Location], v. 9, n. 1, p. 139-164, 2022.


Chicago: Author-Date Style

Jackson, Emerson Abraham, and Edmund Tamuke. 2022. “Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis.” Journal of Economic Policy Researches 9, no. 1: 139-164. https://doi.org/10.26650/JEPR1012975


Chicago: Humanities Style

Jackson, Emerson Abraham, and Edmund Tamuke. Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis.” Journal of Economic Policy Researches 9, no. 1 (Feb. 2023): 139-164. https://doi.org/10.26650/JEPR1012975


Harvard: Australian Style

Jackson, EA & Tamuke, E 2022, 'Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis', Journal of Economic Policy Researches, vol. 9, no. 1, pp. 139-164, viewed 4 Feb. 2023, https://doi.org/10.26650/JEPR1012975


Harvard: Author-Date Style

Jackson, E.A. and Tamuke, E. (2022) ‘Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis’, Journal of Economic Policy Researches, 9(1), pp. 139-164. https://doi.org/10.26650/JEPR1012975 (4 Feb. 2023).


MLA

Jackson, Emerson Abraham, and Edmund Tamuke. Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis.” Journal of Economic Policy Researches, vol. 9, no. 1, 2022, pp. 139-164. [Database Container], https://doi.org/10.26650/JEPR1012975


Vancouver

Jackson EA, Tamuke E. Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis. Journal of Economic Policy Researches [Internet]. 4 Feb. 2023 [cited 4 Feb. 2023];9(1):139-164. Available from: https://doi.org/10.26650/JEPR1012975 doi: 10.26650/JEPR1012975


ISNAD

Jackson, EmersonAbraham - Tamuke, Edmund. Credit Risk Management and the Financial Performance of Domiciled Banks in Sierra Leone: An Empirical Analysis”. Journal of Economic Policy Researches 9/1 (Feb. 2023): 139-164. https://doi.org/10.26650/JEPR1012975



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Submitted21.10.2021
Accepted08.01.2022
Published Online27.01.2022

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