CREDIT MANAGEMENT ANALYSIS OF

GLOBAL IME BANK LTD

A Project Work Proposal

Submitted by:
Aastha B.k
T.U Reg.No.
Exam Roll No………………..

Submitted to
The Faculty of Management
Tribhuvan University
Kathmandu

In Partial Fulfillment of the Requirement for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)
 TABLE OF CONTENT

Title page.no

1. Background of study …………………………………. 1

2. Statement of problem…………………………………. 2

3. Research Question …………………………………….. 2

4. Objective of the study………………………………….. 2

5. Rationale ………………………………………………. 2

6. Literature Review ……………………………………… 3

7. Methodology……………………………………………. 3

8. Limitation……………………………………………… 5

9. Time frame……………………………………………… 5

10.Reference ………………………………………………. 5
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1. Background
Credit is a financial arrangement in which a lender provides money, goods, or services to
a borrower with the promise of future repayment, often with interest. Credit is the trust
which allows one party to provide loan or resources to another party, whereas the second
party does not reimburse the second party immediately but agrees to repay or return those
resources in future date. It plays crucial role in an economic growth by enabling
investment Business Expansion and consumer expansion. Commercial banks act as
intermediaries, mobilizing deposits from the public and channeling them into productive
sectors through credit issuance. Credit involves the agreement by a creditor to lend money
or resources to a debtor under certain conditions, with the expectation of repayment and
compensation in the form of interest (A.Barealey, 2016)
Credit management is the key function of the bank (and other financial institution,
including insurer and institutional investor) with large multifaceted portfolios of credit,
often including liquid loans. It involves evaluating borrowers' repayment capacity, setting
appropriate credit terms, and implementing risk mitigation strategies such as
collateralization and loan diversification. Credit risk management practices and credit risk
mitigation measures have a positive relationship with loan repayment, while obstacles
faced by borrowers have no significant relationship with loan repayment (Pradhan, S., &
Shah, A. K. ,2019). One of the key components of credit management is credit risk
management, which focuses on identifying, assessing, and controlling the risks associated
with lending. Commercial banks also employ techniques such as periodic loan reviews,
stress testing, and debt recovery mechanisms to manage credit risk. Among all the
activities credit provision is main product which bank provides to the potential business
entrepreneur as a main source of income.
Global IME Bank Ltd. is a leading commercial bank in Nepal, committed to financial
inclusion and excellence in banking services, aligning with its vision of being ‘The Bank
for all’. Global IME Bank Limited began its journey as Global Bank limited in 2007 as a
'Class A' commercial bank after receiving approval from Nepal Rastra Bank. In 2012, it
merged with the former IME Financial Institution Limited and Lord Buddha Finance
Limited, subsequently rebranding and operating as Global IME Bank Limited.
The bank was established with the largest capital base at the time with paid-up capital of
NPR 1.0 billion. The paid-up capital of the bank has since been increased to NPR 36.13
billion. The bank’s shares are publicly traded as an “A” category company in the Nepal
Stock Exchange (Global IME Bank Limited (2010/11 to 2017/18).
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2. Statement of Problem
In today’s financial landscape, banks and financial institutions face growing challenges in
credit management due to economic uncertainties, rising inflation, fluctuating interest
rates, and stricter regulatory requirements. The increasing number of non-performing
loans (NPLs), liquidity shortages, and weak risk assessment models threaten financial
stability and profitability. Many banks struggle with loan recovery as borrowers face
financial difficulties, highlighting the need for more effective credit policies. This study
analyzes the credit management practices of Global IME Bank Ltd , identifying key
challenges, evaluating the effectiveness of existing credit policies, and exploring
strategies to minimize credit risks while ensuring sustainable financial performance.

3. Research Question
Research question typically address what, why or how certain phenomena occur or relate
to each other and they help the structure the research process by delineating the scope and
objectives of the study. The research question of the study are as follow:
 What are the various type of loan provided by Global IME Bank Ltd?
 How is the relationship between various types of loan and non- performing loan
of Global IME bank Ltd?

4. Objective
The primary focus of this study is to examine the credit management practices of Global
IME Bank, with a particular emphasis on the types of loans it offers and their impact on
non-performing loans (NPLs). Understanding the variety of loans provided by the bank is
essential to assess how credit is allocated across different sectors and customer segments.
Additionally, analyzing the relationship between these loan types and NPLs will help
determine potential risk factors and the effectiveness of the bank’s credit management
strategies. Based on this, the study aims to achieve the following objectives:
 To identify various types of loan provided by Global IME Bank Ltd.
 To analyze the different types of loan and non-performing loan of Global IME
Bank Ltd.

5. Rationale
The rationale behind credit management lies in its vital role in ensuring financial
stability, minimizing risks, and maximizing profitability for banks. Effective credit
management helps control non-performing loans (NPLs), which, if not managed properly,
can reduce liquidity and erode profits. In Nepal, rising NPLs have become a concern for
commercial banks like Global IME Bank, impacting their operational
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efficiency and earnings. Since the bank provides various loan products to individuals and
businesses, understanding how these loans contribute to NPLs is essential for improving
credit policies and maintaining financial health. This study aims to identify the types of
loans offered by the bank and analyze their relationship with NPLs, providing insights
that can help enhance credit management strategies, reduce risks, and improve long-term
profitability.

6. Literature review
A literature review serves as a means to explore what previous researchers have
discovered in the area of the problem being studied, while also ensuring that issues that
have already been thoroughly addressed are not investigated again. For this report, the
researcher draws on a variety of sources, including books, reports, and scholarly
opinions, to gain a deeper understanding and provide clarity on the study's objectives.
This process helps in forming a clear framework for the research, avoiding redundancy,
and building on the existing body of knowledge.
Agrawal (2005) states that field work assignment and report writing" provides practical
guidance to the field work and report writing. This is the basic guide book for this field
work. This book provides practical knowledge about how to write field work and report.
Fisher and Jordan (2006) states that, the investment is a commitment of funds made in
the expectation of some positive rate of return. If an investor is properly undertaking the
return will commensurate with the risk investor assumes.
Iqbal (2003) has found that, Bangladesh Krishi Bank, was concentrating its lending to
primary agriculture to serve to poor people in rural area. Later on, it has diversified its
activities to secondary agriculture. After diversification, the financial position of the bank
become more transparent and expected for better result soon.
7. Methodology
Research methodology outlines the approach and techniques used to collect, analyze, and
present data in a study. It is a crucial section of the report, as it demonstrates how
effectively and clearly the researcher will communicate the findings. The methodology
section provides a roadmap of the processes and tools that will be used to gather and
interpret data. For this study, the following methods will be employed to prepare the
report:
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7.1. Research Variables
While preparing this report, several research variables will be utilized, including various
types of loans and deposits, to explore the bank's approach to credit management at
Global IME Bank LTd . These variables will help in analyzing the bank’s strategies, risk
management practices, and the overall effectiveness of its credit management policies.

7.2. Research Design

Research design is a detailed plan for conducting the investigation. This study will use
both analytical and descriptive research designs to explore the research objectives.
Analytical design will examine relationships, while descriptive design will provide
detailed insights into loan types and their connection with non-performing loans.

7.3. Population sample

Due to time constraints, it will not be possible to collect data from all organizations.
There are 20 commercial banks in Nepal, but for this study, the researcher will focus on
Global IME Bank Ltd., using convenience sampling techniques.

7.4. Sources and technique of data Collection

For this report, data will be collected from secondary sources. To analyze credit
management, the researcher will use quantitative data. The data collection techniques will
involve secondary collection methods, which are outlined below:

A. Secondary Data
Here, data are not originally collected by the researcher but is obtained from other
sources. These data are pre-existing and have already been collected by others. The
secondary data for this study will be obtained from the following sources:
 Annual reports
 Published data provided by the bank
 Official websites

7.5. Data presentation and Analysis Tools

The data will be processed, tabulated, and graphed to analyze and achieve the objectives
of the study. The following statistical tools will be used in this study:
 Mean
 Standard Deviation
 Coefficient of Variation
 Correlation
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8. Limitations
The study will be subject to the following limitations:
 It will focus exclusively on loans and deposits.
 Only statistical tools will be employed for data presentation and analysis.
 The study will cover a five-year period, from 2076/77 to 2080/81.
 The study will utilize secondary data exclusively.
9. Time Frame

Topic selection 2 days

Proposal writing 5 days
Data collection 5 days
Date presentation and analysis 8 days
Preparation of report 6 days
Proof reading 4 days
Setting and printing 5 days
Review of literature 5 days
Total 40 days

10. Conclusion
Credit is a foundational element of economic exchange, enabling trust and reciprocity
between parties. Effective credit management, especially within banks, is essential for
evaluating and mitigating risks linked to lending activities. Global IME Bank Ltd., as one
of the commercial bank of Nepal, has played a significant role in formalizing the banking
system and promoting economic development by offering essential financial services.

The conclusion of this study highlights that the report primarily focuses on the loan
management practices of Global IME Bank Ltd. The study also draws comparisons with
similar research conducted on other commercial banks. Global IME Bank Ltd Provides
six different types of loan product such as: Home Loan, Share Loan, Loan against FD,
Education Loan, Personal Loan, Auto Loan.

11. References
Agrawal, G. R. (2005). Fundamentals of investment. K.P. Pustak Bhandar.
Fisher, D., & Jordan, M. (2001). Fundamentals of financial institutions and markets.
McGraw-Hill.
Fisher, Y. L., & Jordan, P. (2006). Fundamentals of financial institutions and markets.
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Iqbal, A., Hasan, M., & Rahman, M. (2003). The role of agricultural credit in the growth
of the livestock sector: A study of Bangladesh Krishi Bank. Bangladesh Journal of
Agricultural Economics, 29(2), 81-84.
Steven, M. (2003). Economics: Principles in action. Upper Saddle River, NJ: Pearson
Prentice Hall.