ABSTRACT

The study sought to establish the factors that determined the contributions of short term investment on credit management of commercial banks and was driven by three objectives: Identified the extent to which short term investment affect the financial performance of Banks, Identified short term investment and credit management options of commercial banks and identified the management strategies put in place and source of possible solutions. To achieve these objectives, the researcher sampled 50 respondents from Post bank and their clients. The study utilized quantitative and qualitative research methods; four data collection instruments, and the collected data was presented in tabular and analyzed statistically to show the findings. The major finding of the study was that credit management policy provides a frame work for the entire credit management process, by setting objectives, standards and parameters to guide these commercial banks. Banks should therefore have a clear understanding of the level of risk inherent in the borrowers and they intend to invest in as well managing the risks they have accepted. The study indicated that banks should ensure proper loan management so as to ensure repayment of funds on the loans as orderly repayment presupposes systematic monitoring of the loan after it has been extended. X