Effectiveness of Credit Management System on Micro Credit Performance: Case Study of East Africa Commercial Banks and Mobile Operators

Credit management is the process of granting credit, terms and conditions definition, compliance with credit policy, and then payment on the due date. The core business for financial institutions is to improve revenues and profit by facilitating sales and reducing loss and financial risks. This research is to assess the effectiveness of credit management principles and their impact on loan performance for a specific type of loan “microcredit”. The case study is microcredit in East Africa especially provided by commercial banks in partnership with mobile network operators. The purpose of the research will be mainly to assess the applicability of credit management principles to achieve better performance in microlending. This research's target sample is East Africa commercial banks in conjunction with mobile operators providing online microcredit to mobile money subscribers and commercial banks ‘customers.