Credit risk and bank performance: a Sub-Saharan African perspective

Adamu Yahaya, Fauziah Mahat and Aliyu Mamman

Afro-Asian Journal of Finance and Accounting, 2024, vol. 14, issue 2, 170-191

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.

Keywords: credit risk; return on asset; earning per share; two-step system GMM; Sub-Saharan Africa; SSA. (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ids:afasfa:v:14:y:2024:i:2:p:170-191

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