Credit risk and bank performance: a Sub-Saharan African perspective
by Adamu Yahaya; Fauziah Mahat; Aliyu Mamman
Afro-Asian J. of Finance and Accounting (AAJFA), Vol. 14, No. 2, 2024

Abstract: Credit risk is one of the dominant risks that pose a great threat to the performance of banks. This study examines the effect of credit risk on the performance of banks in Sub-Saharan Africa (SSA). A total sample of 50 banks was drawn from six Sub-Saharan African countries which include Nigeria, Ghana, South Africa, Zambia, Kenya, and Tanzania from 2010-2018. A two-step system GMM is applied and the findings reveal a significant negative relationship between credit risk and bank performance in the SSA region. The risk committee has a significant positive impact on the performance of banks in the SSA region. Bank management is encouraged to embrace a modern and efficient credit risk management technique to have better control of the rate of credit risk experienced in banks.

Online publication date: Thu, 14-Mar-2024

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