A Study On The Credit Risk Management Of ACLEDA Bank PLC,Cambodia

In the financial market,credit risk is one of the most general risks that existed and a significant risk faced by financial institutions.The main objective of the credit risk management of ACLEDA banks is try to control the risk within an acceptable scale and fulfill the regulatory requirements.Credit risk management has long been in the center of attention of governments,regulatory authorities and financial institutions.This thesis will therefore analyze the importance of credit risk management for ACLEDA Bank Plc,which describe in the literature,and attempts to offer some possible solutions and develop a credit risk management’s implementation plans in the purpose of answering to the challenges faced by the same particular bank.Credit risk management is a guide to identifying,measuring,monitoring and controlling of the possible arising risks from default loan’s repayment.Plenty of studies and researcher have developed and recorded the crucial advantages of credit risk management within financial institution.This research will firstly bring a brief overview information about Cambodia’s financial and banking system as well as the general information needed and related to the chosen commercial bank.It has totally four specific research objectives.First of all,the main challenges for ACLEDA Bank Plc in terms of lending will be identified especially through the interview with related staffs from the bank.Second,it seeks to examine the current practices of credit risk management in the same bank,as this bank is a biggest and well operate bank in Cambodia.In addition,the proposal for some possible solutions for credit risk management will be presented,and finally,the recommendation of the practicable credit risk management implementation plans will be proposed,which could be able to outweigh the challenges and improve the credit risk management’s practices in ACLEDA Bank.In this study,both qualitative analyzes and interviews are conducted to identify key factors that contribute to the practice and the challenges faced by the selected bank.A credit risk management’s framework or implementation plans and possible solutions for ACLEDA Bank Plc.in Cambodia will be proposed in order to improve the credit risk management’s performance.In addition,this study carried out by an analysis of the documents of the case bank,and with both internal and the external environment.Those will show the real situation and the significant of credit risk management as well as the organizational structure in risk management and particularly in credit risk management.This study has also contributed to the literature which examining credit risk management of financial institutions in general and ACLEDA Bank Plc.in particular.The insights of finding,in addition to the application of good practices,methods and available technologies,will enhance and improve credit risk management’s practices.Proposals such as department restrictions between credit approval and credit risk control and audit,improvement of the legal department,which including decentralization of the legal department,strengthening of the legal department and creation of a new credit culture are presented.Implementation plans will also propose in term of management,human resources and technological support in order to allow for a smoother flow of work while attempting to improve their practices.The general and overall conclusion will present along with the difficulties and challenges that have arisen throughout the research,as well as the further direction for further research.