ABSTRACT This study was done in order to analyze the impact of lending policy of CRDB Bank upon recovery rate and consequently to give recommendations wherever possible for the sake of making loan recovery rate performance more competitive and profitable in the future and current market. The main problem in this study is the impact of loan recovery process and procedures as guided by the lending policy of the bank which to large extent hinder the process. In carrying out this study, data collection techniques such as; observation, personal interview, structured questionnaire and documentary review have been employed. Security pledged such as landed property was found to be not realistic to recover the loan issue to considered were; ► Higher lending interest rates hinder rate of recovery ► New Land Act 1999 lengthen recovery process as not supportive to the bank ► Poor securities pledged depreciate in value such as chattel mortgage. From the research findings, a recommendation has been made that the policy should be reviewed thus makes the following changes to improve recovery rate and motivate customers towards loan repayment:- ► Encourage other forms of securities apart from landed properties ► Discourage acceptance of residential houses as securities ► Lending rates to be at concessionary rate. Lowering lending rates to match with saving rates so as to encourage borrowing and loan recovery process. ► The bureaucracy in the legal system which slows down the settlement of commercial disputes especially foreclosure of mortgages should be improved to accelerate rate of recovery. 

TABLE OF CONTENTS 

COPYRIGHT ................................................................................................. i 

© Albert Mushumba 2006 ..................................................... : ..................... i 

DECLARATION ................................................................................. , ......... ii 

ACKNOWLEDGMENT ................................................... : ........................... iii 

DEDICATION .............................................................................................. .iv 

TABLE OF CONTENTS .............................................................................. v 

ABSTRACT ..... , ........................................................................................... vi 

DEFINITIONS OF TERMS .......................................................................... vii 

CHAPTER ONE ........................................................................................... 9 

1.1 Background information of CRDB Bank Limited ..................................... 9 

1.2 Background of the study ....................................................................... 11 

1.3 Foundations of the credit policy ............................................................ 11 

1.4 Source of funds .................................................................................... 12 

1.5 Problem Statement. .............................................................................. 15 

1.6 Research objectives ............................................................................. 16 

1.7 Research questions .............................................................................. 16 

1.8 Significance of the study ...................................................................... 16 

1.9 Scope of the study ................................................................................ 17 

1.-1 O Limitation of the study ........................................................................ 17 

CHAPTER TWO ........................................................................................ 18 

2.0 Literature review ................................................................................ 18 

2.1 On Services marketing ......................................................................... 20 

2.2 Marketing in banks ............................................................................... 21 

2.3 Basic principles of lending .................................................................... 22 

2.3.i Safety.............................................................................. 22 

2.3.2 Suitability...................................................................... 22 

2.3.3 Profitability................................................................................... 23 

CHAPTER THREE ..................................................................................... 24 

3.0 Research methodology ........................................................................ 24 

3.1 Research Design .................................................................................. 24 

3.2 Area of study ........................................................................................ 24 

3.3 Units of Inquiry ..................................................................................... 24 

3.4 Data collection methods ....................................................................... 24 

3.5 Data analysis ........................................................................................ 25 

CHAPTER FOUR 

4.0 Data analysis and research findings ............................................. 26 

4.10 Factors associated with the lending policy .................................. 26 

4.1.1 Collateral/security .................................................................. 26 

4.1.3 Poor securities ..................................................................... 28 

4.1.4 New Land Act.. ..................................................................... 30 

4.1.5 Performance of CRDB Banking loan Recovery ............................ 31 

Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 

Questionnaire .............................................................................. 35 

BIBLIOGRAPHY .................. : ..................................................................... 39