Building a strong credit culture—borrower’s perspective

The growth and development of the banking and financial sector has been propelled by factors driven by market demand and supply forces. We have seen banks coming up with various products not only to meet client demands but also as a means of remaining competitive given the number of players within the banking sector. Comparatively, customers now have a wider range of selection when it comes to choice of a banker. Taking advantage of the technology banks have no choice but to keep on being creative and innovative on product development and service delivery channels. A review of financial performance of most banks reveals that lending/credit accounts for over 50% of the banks’ revenues. However, lending has increasingly become riskier thus pushing banks to equip themselves more on risk management through strengthening of credit culture where everyone, regardless of their roles, understands the need to drive revenue growth while also minimizing risk. To enable this synergy, banks and financial institutions must assess the components of their institutional cultures, including training, communication, decision-making, and compensation. For many banks it is compulsory for officers engaged in the entire credit chain from marketing, origination, analysis, approval, documentation, control, recovery and so on to