Browsing by Author "Semusu, Alex"

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    The effect of credit collection policy on loan performance in the banking sector in central region of Uganda
    (Indonesian Association of Lecturers Researchers in Economics and Business (ADPEBI), 2026-03-30) Semusu, Alex; Eton, Marus; Kaaya, Siraje; Mpora, Eliab Byamukama
    This study examined the effect of credit collection policy on loan performance in the banking sector of Central Uganda. Despite the presence of formal credit collection frameworks, commercial banks in Uganda continue to experience persistent loan defaults, raising concerns about the effectiveness of existing collection practices in improving loan performance. Anchored in a pragmatic research paradigm, the study adopted a mixed-methods approach. Quantitative data were collected using structured questionnaires administered to selected commercial banks and analyzed through Covariance-Based Structural Equation Modeling (CB-SEM) using Jeffrey’s Amazing Statistical Program (JASP) version 0.19.3.0. Exploratory Factor Analysis (EFA) was employed to validate the measurement model. Qualitative data were obtained through key informant interviews and analyzed thematically to complement and explain the quantitative findings. The results revealed that credit collection policy had a negative but statistically non-significant relationship with loan performance (β ≈ −0.04, p > 0.05). While the measurement model demonstrated acceptable construct validity and reliability, the structural model indicated that formal credit collection policies did not significantly influence loan performance outcomes. Qualitative findings provided further insight, showing that collection practices were largely reactive, with recovery efforts typically initiated only after loans became non-performing. In addition, heavy reliance on third-party debt collectors and delayed borrower engagement weakened internal ownership and accountability in the credit recovery process. The study contributes empirical evidence from Uganda’s banking sector by demonstrating that the effectiveness of credit collection policy is determined less by formal policy design and more by proactive implementation and early borrower engagement. By integrating quantitative SEM results with qualitative insights, the study offers a nuanced explanation for the weak linkage between credit collection policies and loan performance, with implications for strengthening credit risk management policies in developing economies.
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    The effect of credit limit policies on loan performance in the banking sector of the central region of Uganda
    (East African Nature and Science Organization, 2026-02-03) Semusu, Alex; Eton, Marus; Kaaya, Siraje; Mpora, Eliab Byamukama
    This study examined the effect of credit limit policies on loan performance in the banking sector of Central Uganda. A quantitative cross-sectional survey design was employed and complemented with qualitative insights. Data was collected from credit officers, risk managers, and relationship managers in selected commercial banks using structured questionnaires. Credit limit policies were operationalised through borrowers’ cash flows, collateral adequacy, capital, conditions, creditworthiness, character, and capacity, while loan performance was measured using non-performing loans, recovery rates, and repayment timeliness. Data was analysed using SPSS version 26 and JASP version 0.19, with Structural Equation Modelling (SEM) applied to test the hypothesized relationship. The findings reveal a positive but statistically insignificant relationship between credit limit determination and loan performance. Qualitative evidence indicates that this weak effect is primarily due to inconsistent enforcement of credit limit policies, managerial overrides, and infrequent reviews of approved limits in response to changing borrower conditions and market dynamics. The study concludes that although formal credit limit frameworks exist within commercial banks, deficiencies in implementation and monitoring undermine their effectiveness in enhancing loan performance. By integrating quantitative SEM results with qualitative insights, this study contributes to the credit risk management literature by highlighting the implementation gap between policy design and practice. Practically, the findings offer actionable guidance for commercial banks and regulators, including the Bank of Uganda, on strengthening credit limit enforcement, review mechanisms, and governance structures to improve loan performance. While the focus on Central Uganda may limit generalizability, the insights remain relevant for similar banking contexts in emerging economies.
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    The effect of credit monitoring policy on loan performance in commercial banks in central Uganda
    (East African Journal of Business and Economics, 2026-03-25) Semusu, Alex; Eton, Marus; Siraje, Kaaya; Mpora, Eliab Byamukama
    This study examined the effect of credit monitoring policy on loan performance in commercial banks operating in Central Uganda. Guided by a pragmatic philosophy, a convergent mixed-methods design was adopted. Quantitative data were collected from 378 banking professionals and analysed using Exploratory Factor Analysis (EFA), Confirmatory Factor Analysis (CFA), and Structural Equation Modelling (SEM), while qualitative insights from semi-structured interviews were thematically analysed to support interpretation. The results reveal a positive but statistically insignificant relationship between credit monitoring policy and loan performance (β = 4.227, t = 0.425, p > 0.05). EFA identified three key dimensions of credit monitoring: effective governance and strategic leadership, organisational governance and continuous improvement, and risk evaluation approaches. These constructs demonstrated acceptable validity and reliability, with KMO values ranging from 0.616 to 0.626, Bartlett’s Test of Sphericity significant at p < 0.001, Cronbach’s alpha coefficients between 0.530 and 0.600, and Average Variance Extracted (AVE) values above 0.50. CFA results confirmed strong model fit (CFI = 1.000, TLI = 1.000, RMSEA = 0.000). Qualitative findings indicate that monitoring practices are largely manual, reactive, and inconsistently applied, limiting early detection of borrower distress and weakening policy effectiveness. The study concluded that the effectiveness of credit monitoring depends more on implementation quality than on the existence of formal frameworks. Strengthening automated monitoring systems, early warning mechanisms, and managerial accountability is essential for improving loan performance and reducing non-performing loans. While the cross-sectional design limits causal inference, the findings provide context-specific insights for enhancing credit risk management in emerging banking markets.