| Abstract: | This study investigated the effect of credit risk management and Addis Credit and Saving
Institution's profitability. The researcher employs panel data regression models with Return on Asset
and Return on Equity as the dependent variables along with Nonperforming loan ratio, Capital
adequacy ratio, Institution Size, and Total loan total deposit independent variables. This was
accomplished by gathering information from the Addis Credit and Saving Institution in Addis Ababa
and their published annual report for the years 2017 to 2022. Descriptive statistical methods
including mean, maximum, minimum, and standard deviation were used to examine the acquired
data. Furthermore, using STATA software, multiple linear regressions were utilized to determine the
cause-and-effect relationship between the study variables analysis. The non-performing loan to total
loan ratio and capital adequacy ratio were found to have significant negative effects on both return
on assets andreturn on equity, according to the study's key findings. Moreover, Institutional size and
the Total Loan to Total Deposit ratio have significantly and favorably impacts the Addis Credit and
Savings Institution's profitability as assessed by Return on Asset) and Return on Equity. According
to the study, it is advised that Addis Credit and Saving Institution adopt a strict policy for managing
credit risk, develop a non-performing total loan management system, and create efficient collective
ways for managing loan receivables. This research's expansion would be interesting to pursue with
larger sample sizes and new measures of credit risk management and performance. |
