Published Online:April 2025
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:IJARAP050425
DOI:10.71329/IUPJARAP/2025.24.2.110-124
Author Name:Radhika V R and Resmi R
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:110-124
The paper examines borrower perspectives on the effects of credit risk management practices in Urban Cooperative Banks (UCBs), focusing on three key factors—credit granting process; credit rating; and loan repayment, follow-up, and recovery—through a survey of 480 borrowers from UCBs in Kerala. Using Exploratory Factor Analysis (EFA), these factors are identified, and Confirmatory Factor Analysis (CFA) confirms a good model fit. The study also explores how perceptions vary based on gender, age, education, occupation and income levels. The results indicate that female borrowers perceive credit granting, loan repayment, and recovery more favorably than males, while perceptions of credit rating remain statistically similar across genders. ANOVA and Welch’s ANOVA findings reveal significant differences in perceptions across age groups, education levels, occupation, and income levels, underlining the role of demographic factors in shaping borrower views on credit risk management. These insights can help policymakers and financial institutions develop inclusive lending policies that increase the confidence of borrowers, improve risk assessment, and reduce default rates. The study contributes to understanding how the characteristics of borrowers influence risk perceptions, and helps UCBs in refining their credit risk management frameworks for financial stability.
Modern financial systems are fundamentally based on credit, an essential instrument for managing cash flow, investing in opportunities, and reaching financial objectives for individuals and corporations.