A Preliminary Study on Credit Risk Management Strategies of Selected Financial Institution in Malaysia

Catherine Soke Fun Ho, Nurul Izza Yusoff

Abstract


Commitment to prudent lending is an important and current issue of discussion in the global banking system today. Banking prudence and efficiency to manage their risks in different business cycle and environment would help to alleviate crises and losses. The effective management and critical to the long-term succes of all banking institutions. This study aims to investigate the type of risk management strategies and monitoring practices implemented by financial institutions in Malaysia. the sample consists of fifteen institutions and this study found thaht diversification of loan services, risks mitigation and training and development of staff are three most popular practices implemented by financial institutions. Lastly, this paper is one of the first that attempts to use primary data in credit risk management strategies which is a significant contribution in the area of finance.

ABSTRAK

Komitmen terhadap perlaksanaan memberi pinjaman bijaksana merupakan satu isu yang penting dan semakin mendapat perhatian di dalam sistem perbankan global pada hari ini. Perbankan bijaksana dan kecekapan dalam menguruskan risiko kredit yang berkesan merupakan satu elemen yang penting di dalam teknik pengurusan risiko yang komprehensif dan ia amat penting bagi memastikan kejayaan semua institusi kewangan dalam jangka masa panjang. kajian ini dijalnakan bagi mengenalpasti jenis-jenis strategi pengurusan risiko dan keadah pemantauan yang dilaksanakan oleh institusi kewangan di Malaysia dan mendapati bahwa tiga jenis kaedah yang sering dilaksanakan oleh institusi kewangan di negara ini adalah pelbagai bentuk pinjaman, mitigasi rsiisko dan latihan dan pembangunan staf. Akhir sekali, kajianini merupakan salah satu kajian yang terawal menggunakan data primari dalam pengurtusan risiko kredit dan memberikan sumbangan yang penting dalan bidang kewangan.


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