The Effect of Loan Portfolio Management on the Performance of Banks in Ghana

The objective of the study is to determine the influence of loan portfolio management on the financial performance of banks in Ghana. The study adopted an explanatory cross-sectional survey as its research approach. The research was based on panel data acquired from banks that were in operation from 2010 to the present. Correlation analysis and regression analysis were used in the study, with regression models built by the researcher to assess the study's assumptions. The study shows that personal loans, real estate loans, and small and medium-sized enterprise loans all collectively do have a statistically significant impact on the financial performance of commercial banks. Overall, the model shows that the variables included in the model have a relatively good measure of fit and that the loan portfolio has a significant impact on ROA, ROE, and CR. A number of empirical research back up this conclusion, although it also conflicts with findings from certain other investigations. The study recommends the diversification of personal loans to reduce risks of defaults, which can be done by discriminating the borrowers based on the information available.

The objective of the study is to determine the influence of loan portfolio management on the financial performance of banks in Ghana. The study adopted an explanatory cross-sectional survey as its research approach. The research was based on panel data acquired from banks that were in operation from 2010 to the present. Correlation analysis and regression analysis were used in the study, with regression models built by the researcher to assess the study's assumptions. The study shows that personal loans, real estate loans, and small and medium-sized enterprise loans all collectively do have a statistically significant impact on the financial performance of commercial banks. Overall, the model shows that the variables included in the model have a relatively good measure of fit and that the loan portfolio has a significant impact on ROA, ROE, and CR. A number of empirical research back up this conclusion, although it also conflicts with findings from certain other investigations. The study recommends the diversification of personal loans to reduce risks of defaults, which can be done by discriminating the borrowers based on the information available.