Credit risk management and financial performance of microfinance institutions Carmen, Davao del Norte

Abstract

The study aims to determine the significant relationship between credit risk management and financial performance of microfinance institutions. This study was based on an adapted questionnaire with different measurements of credit management practices and credit risk control. The convenience sampling technique was used in collecting data from the 13 employees of three microfinance institutions in Carmen, Davao del Norte. The statistical tools used were mean and Pearson’s product-moment correlation coefficient. The study revealed that the level of credit risk management was high and yielded an overall mean of 3.77. In terms of the level of the financial performance of microfinance institutions, it has a result of 3.60, which is high. Furthermore, it revealed that there was a significant relationship between credit risk management and financial performance. The results showed a P-value of 0.011 which is less than the 0.05 level of significance, indicating that the null hypothesis (ho) was rejected.