Analyzing Credit Risk Management in Commercial Banks: An Exploratory Research about the Opinions of a Sample of Managers and heads of departments in selected commercial banks in Erbil City (2021


  • Dr. Sangar Sarbast Qasim
  • Dr. Muhammad Muhsin Anwar


Commercial Banking, Credit Risk Management, The Central Bank and monitory authorities, Banking Policy, Management.


Banks are vital to any healthy economy due to their crucial role in society. Nowadays, they provide a wide range of services and products. Their principal function is to transfer surpluses into deficit units by taking deposits from the community and giving them back to the community through lending (Paddy, 2012) as providers of financial resources and information to the economy. They even play a more critical function in developing economies. Borrowers, "individuals and businesses," have no easy access to capital markets. Therefore, well-functioning commercial banks accelerate economic growth, while poorly functioning ones hinder economic development and thus increase poverty (Muye and Muye, 2017).

Lending is one of the principal types of banking activity, which is essential for meeting the ever-growing consumer needs and taking part in the production and socio-economic development of the country. Various forms and types of banking credits demonstrate that lending is the core of banking as a source of profit, while there is a constant demand from individuals and business entities (Yanenkova et al., 2021).

On the other hand, these banks face different risks that need intervention with various protection ways to decrease these risks. Risk management (RM) is the procedure for identifying, monitoring, and measuring risk (Spucháková & Adamko 2015). One of these risks is CR, which these banks face due to lending and credit processes. CR is associated with the businesses of financial institutions as the financial position of a borrower deteriorates (Afriyie et al., 2018). Banks have developed credit scoring models to improve evaluating creditworthiness process during the credit evaluation process to reduce CR and promote lending quality (Paddy, 2012).