Factors affecting to the credit recovery in Sri Lanka: A Review of Literature

Abstract

One of the most important matters in banking in general and lending in particular is the ability of a lending officer to confidence lend out money and be assured that these funds will be recovered from the borrower without resorting to punitive action. The problem of credit default is a real one that has cost many financial institutions fortunes in bad debts. Because of lack of information on credit defaults many credit officers are likely to still lend out funds that may never be recovered. This study sought to identify factors that lenders could look out for and the foresight they would need to have in order to avoid default of credits. The findings were that the education background of borrowers is a vital factor that they all need to be weary of as they make decision to lend. It also was brought to the fore that it is vital to equip credit officers with sufficient knowledge and skills in the field of lending for them to be better analyst of credit assessment.