IMPACT OF CREDIT MANAGEMENT ON THE PERFORMANCE OF MICROFINANCE BANKS IN OFFA LOCAL GOVERNMENT AREA OF KWARA STATE NIGERIA

ABSTRACT Regardless of the form of the business, credit management is one of the most crucial operations in any firm and cannot be disregarded by any economic enterprise that uses credit. A financial institution's stability and ongoing profitability depend on sound credit management, whereas declining credit quality is the most common reason for subpar financial performance and condition. The largest danger in microfinance, as with any financial organization, is lending money and not getting it back. The goal of the study was to ascertain how credit management affected the financial success of Nigerian microfinance institutions. The research used a descriptive survey methodology. The investigation was conducted using data from a census. Utilizing questionnaires, primary data was gathered. To analyze the data, descriptive statistics were employed. Additionally, descriptions were created using the data from the tables. The study discovered that the financial performance of MFIs in Nigeria was impacted by client evaluation, credit risk management, and collection policies. According to the report, there is a high correlation between MFI financial success and client approval. Credit risk management and collection practices also have a big impact on MFI financial performance in Nigeria. It was discovered that the collection policy had a greater impact on financial performance. The report thus advises MFIs to improve their collection approach by switching from a lenient policy to a more severe one in order to effectively recover debt.