Paper Title
Credit Risk Management in Rural and Community Banks in Ghana

Abstract
For almost all rural banks in Ghana, loans are the largest and most obvious source of credit risk; however, other sources of credit risk exist throughout the activities of a bank, including the banking book and in the trading book. The main goal of the research was to assess the credit risk management practices used by rural banks in Ghana precisely Ashanti region. To have information on this, annual reports of the selected rural banks of the years of study were thoroughly studied. In addition, interviews and questionnaire were used to collect information from key staffs that were directly related to the credit origination and credit risk management and the defaulters from the banks. A critical observation of the processes involved in the banks’ credit creation to its administration was made. The results of the study revealed that, the selected rural banks were making efforts to reduce their portfolio at risk to minimal. From the findings, the banks portfolio at risk showed a downward trend from 2009 to 2013. The major causes of loan default among defaulters of the banks were also revealed. Notwithstanding the fact that banks were able to reduce their portfolios at risk, it should be recognized that an institution need not engage in business in a manner that unnecessarily imposes risk upon it: nor it should absorb risk that can be transferred to other participants. Keywords - Portfolio, Risk, Diversion