An analysis of the factors leading to rising credit risk in the Zimbabwe banking sector

Abstract

The study sought to analyse the factors that lead to rising credit risk in the Zimbabwean banking sector. The objective was to ascertain the impact of macroeconomic, industry and bank specific factors on rising credit risk in in Zimbabwe. The study aimed at contributing to credit risk management literature by providing evidence Sub Saharan context. Being anchored on the positivist quantitative research approach, a survey was carried out to gather the data that were analysed using descriptive, correlation and regression analyses. The results revealed that the most significant factors leading to credit risk in the Zimbabwean banking sector were macroeconomic and bank specific factors. The industry factors did not show a significant influence on the rising credit risk. The research findings of this study will a valuable addition to the existing knowledge and provide a platform for further research on how the credit risk problems can be dealt with. While credit risk is known as one of the risks inherent to any banking institutions, the alarming levels of credit risk in the Zimbabwe banking sector has motivated this current study to critically analyse the factors that have led to the high credit risk levels