Factor Influence for Credit Risk at Saving and Credit Cooperative Societies

Abstract

This study has been done to evaluate factor influence for credit risk at the Saving and Credit Co-operative Societies (SACCOS) in Kathmandu. This study has used a qualitative and descriptive approach to assess factors affecting credit risk on saving and credit cooperative societies. It reveals that loan size and years of the borrowers contributed positively to the credit and risk of credit. The factors such as interest rate, loan duration, the value of collateral, management inefficiently, boards vested interest in investment, inadequate follow-up, and lack of training to the staff affected the status of the loan. This had noticed that the absence of proper credit risk management practices resulted in a huge amount of overdue loans. This study recommends that the board of directors should not be intervening in the cooperative society’s activities and SACCOS should make sure, that they abide by their regulations.

Keywords: Factor influence, Credit risk, Savings and Credits Cooperative Societies (SACCOS).