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This study mainly aimed at identifying factors responsible for ineffective lending performance among commercial banks in Tanzania: The Case of National Bank of Commerce (NBC) Corporate Branch, Kinondoni District, Dar Es Salaam, Tanzania. In the methodology, the study used documentary review, questionnaire, and interview as techniques in gathering data from a sample size of eighty respondents. The findings were presented and analyzed using figures and tables, both supported by percentage in comparing and making consideration from respondents’ views upon which, conclusion and other final steps were drawn. The study had to achieve four specific objectives which were; to examine whether effective lending performance can lead commercial banks to achieve desirable return on investment from lending exercise; to identify factors responsible for the ineffective lending performance achieved by commercial banks in Tanzania, to determine whether there is influence from inappropriate repayment process that leads to ineffective lending performance in commercial banks, and to assess the influence of available banks lending policies on the favourability of effective lending performance in commercial banks.
Based on findings obtained from the whole process, this study found out that effective lending performance can lead commercial banks to achieve desirable return on investment from lending exercise, since each and every aspect from there in will be as well as desirably achieved. The study also found that lending performance at NBC seems to be unsuccessful (ineffective). The study further concluded that the ineffective lending performance is the result of several factors amongst others which include; low trend in returning credits (loan) by borrowers, tight lending conditions leaving most of borrower incapable of benefitting by this exercise. The study found that factors that hinder the implementation of effective lending performance include; poor lending policies, low trend in returning credits/loans, all other conditions governing lending exercises being too tight, high interest imposed in returning credit, and son. For, it was
found that lending policies are not favorable toward effective lending performance. Therefore, since, many issues relating to lending exercise, in commercial banks, in Tanzania remain critical, commercial banks were recommended to take urgent action to rectify the situation. Further studies recommend to touch either similar or same areas as the way to the either extend or put more clarification about knowledge pertaining to lending business. |
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