The Relationship Between Credit Risk Management and Profitability Among the Commercial Banks in Kenya

Banks operate in an environment of considerable risks and uncertainty. Credit risk has always been a vicinity of concern not only to bankers but to all in the business world because the risks of a trading partner not fulfilling his obligations in full on due date can seriously jeopardize the affairs of the other partner. Credit risk management in banks has become more important not only because of the series of financial crisis that the world has experienced in the recent past, but also the introduction of Basel II Accord. The objective of the study was to establish the relationship between credit risk management and profitability in commercial banks in Kenya, Both qualitative and quantitative methods were used in order to fulfill the main purpose of the study. A regression model was used to do the empirical analysis. The results obtained from the regression model show that there is an effect of credit risk management on profitability at a reasonable level. The findings and analysis reveal that credit risk management has an effect on profitability in all the commercial banks analyzed.

The Fifth China International Credit and Risk Management Conference

The 5th China International Credit and Risk Man- agement Conference was held on September 24- 26 in Xiamen,Fuiian province.More than 600 enterprises,mainly from the fields of import and export trade,manufacturing and finance,sent their repre-

企业违信行为的动因分析及管理对策

文章对市场经济条件下企业违信行为的表现形式作了概要介绍,综述了企业信用问题状况,从理论与现实两方面分析了企业违信行为产生的原因,并在此基础上提出了治理企业违信行为的管理对策。

Consumer lending efficiency:commercial banks versus a fintech lender

Fintechs are believed to help expand credit access to underserved consumers without taking on additional risk.We compare the performance efficiency of LendingClub’s unsecured personal loans with similar loans originated by banks.Using stochastic frontier estimation,we decompose the observed nonperforming loan(NPL)ratio into three components:the best-practice minimum NPL ratio,the excess NPL ratio,and a statistical noise,the former two of which reflect the lender’s inherent credit risk and lending inefficiency,respectively.As of 2013 and 2016,we find that the higher NPL ratios at the largest banks are driven by inherent credit risk,rather than lending inefficiency.Smaller banks are less efficient.In addition,as of 2013,LendingClub’s observed NPL ratio and lending efficiency were in line with banks with similar lending volume.However,its lending efficiency improved significantly from 2013 to 2016.As of 2016,LendingClub’s performance resembled the largest banks–consistent with an argument that its increased use of alternative data and AI/ML may have improved its credit risk assessment capacity above and beyond its peers using traditional approaches.Furthermore,we also investigate capital market incentives for lenders to take credit risk.Market value regression using the NPL ratio suggests that market discipline provides incentives to make less risky consumer loans.However,the regression using two decomposed components(inherent credit risk and lending inefficiency)tells a deeper underlying story:market value is significantly positively related to inherent credit risk at most banks,whereas it is significantly negatively related to lending inefficiency at most banks.Market discipline appears to reward exposure to inherent credit risk and punish inefficient lending.

The Effects of Professional Managers＇ Credit on Their Work Performance： Firm Owners＇ Trust and Credit Identification Mechanisms

Finding successors for private enterprises has become an urgent problem in recent years, partially because those firms＇ owners lack trust in professional managers. Previous research on agents focuses on preventing opportunistic behavior and neglects the value of their entrepreneurship. In our research, professional managers＇ credit is divided into three dimensions： personal credit, professional credit and operational credit. Using a sample of 379 firm owners from 27 provinces in China, we find that credit and its detailed dimensions are positively related to private owners＇ trust in professional managers. We also found that a rigorous and effective credit identification mechanism positively moderate the above relationships. Furthermore, trust affects professional managers＇ work performance in a positive way. Accordingly, we advise that （1） professional managers＇ credit assessment system should be established and improved; （2） professional managers and enterprise owners should attach importance to enhancing professionalism and promoting rigorous credit identification mechanisms; （3） the closed-loop of the credit-trust psychologically interactive mechanism based on credit mechanisms and credit identification mechanisms should be put to use.

诚信的自由诠释与法治规训

实现法治型社会管理效果,必须重视诚信法治的研究。现代诚信不仅保有道德结构、政治情境和法律场域的三重意境,更因解构而存在新的三维之义:作为个体品质的诚信、作为关系纽带的诚信和作为价值追求的诚信。以此为前提预设,失信行为即能避开道德难题的困扰,进入法律规制范畴。社会失信治理的现实困境,是呼吁诚信法治的条件因素;诚信法治则以诚信的法治与法治的诚信为基本内涵,证成了规范诚信的正当逻辑。诚信法治回应社会诉求,应以内在一致性与递进式的层次为建构原则,依次推动思想基础、结构基础、制度基础和实践基础的建设。法治以诚信为本义,诚信法治与民生法治构成现代法治的一体两面,是解决失信问题的现实选择。构建诚信法治,是法治实效的重要前提,更是社会管理模式创新的题中应有之义。