FACULTY OF BUSINESS AND MANAGEMENT SCIENCE MASTER OF BUSSINESS ADMINISTRATION (MBA) COURSE: BUSINESS RESEARCH METHODOLOGY
COURCE CODE: RMB 604
NATURE OF ASSIGNMENT: INDIVIDUAL ASSIGNMENT
COURSE INSTRUCTOR: DR. CHALU.
NAME OF STUDENT MOLLEL ALLEN REG ; 036/MBA/T/2012
SUBMISSION DATE 10 OCTOBER 2013
TOPIC; THE ASSESMENT OF CREDIT RISK MANAGEMENT EFFECTIVENESS IN COMMERCIAL BANK IN TANZANIA –A CASE OF CRDB –BANK IRINGA MUNICIPALITY CHAPTER ONE
INTRODUCTION
1.1 Background of the problem:
According to Lopez ,(1999) he defined credit risks as the degree of value fluctuations in debt instruments and the derivatives due to changes in the underlying credit quality of borrowers and counterparts also the credit risk model are used to determine risk–adjusted and regulatory capital requirements. However the development of the corresponding regulatory standards for credit risk models is much more challenging than for the markets risks model.
Also according to Bhattacharya, (1996) Commercial banks are the ones which facing credit risk, other are lender to business, and even individual themselves. Financial institutions particular commercial banks are the one which come across credit risk. The only solution necessary for setting banking status is credit risk management and control. Global financial crisis which has its roots on mortgage are reason for banks collapse, this force automatically banks to gain enough confidence and reset their policy and strategies over credit management. Not only that but also the