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Title: An Assessment of the Impact of Information Assymetry on Loan Performance: a Case of The Zimbabwean Commercial Banks
Authors: Makhurane, Lobohang
Keywords: multi-currency system
commercial banks
loan default ratio
loan application form assessment
Issue Date: May-2018
Publisher: Lupane State University
Abstract: Since the introduction of the multi-currency system in the Zimbabwean sector most of the country’s commercial banks have resumed their core business which is lending. However, their lending business has led to the rapid increase in the loan default ratio of which information asymmetry is one of the major factors contributing to the increasing loan default ratio. Therefore, the objectives of the research were to assess commercial banks, assessing the effectiveness of loan application form assessment and to find out the techniques bank use in proving the existence of collateral from borrowers. A cross sectional survey was used for the study and the sample size was selected and questionnaires were used to collect data. The study found that banks rely mostly on one method of proving that the collateral of the borrower exists and that the information gathering techniques employed by banks were effective. The conclusions drawn from the study were that information asymmetry has an impact on loan performance and this was tested using the One Sample T-test. A positive correlation was found between information asymmetry and non-performance.
Appears in Collections:Department of Accounting and Finance

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