The impact of credit risk on credit granting decisions in Libyan commercial banks

Abstract

This study aims to identify the impact of credit risk on credit granting decision in Libyan commercial banks, To achieve the study's objective, both the inductive and deductive approaches were used, The study population represented Libyan commercial banks operating in the eastern region, while the study sample represented the departments in these banks, namely "Senior Management, Compliance Management, Risk Management, Internal Audit Management, and Banking Control Management at the Central Bank ". The study subject was the managers of these departments, A questionnaire was used to collect data to test the study hypotheses, The Statistical Package for Social Sciences ( SPSS ) was used to test data statistically, The descriptive and deductive methods were used to analyze the data and test the study hypotheses, The descriptive method was represented by frequency tables and percentages, in addition to arithmetic means and standard deviations to describe the characteristics of the study sample and interpret the answers related to the opinions of the study sample opinions, The deductive method was based on using the "The Sign Test" to test the study hypotheses.  The study reached results indicating that credit risks have an impact on credit -granting decision in Libyan commercial banks, as well as their relationship to the credit decision - making process and the factors influencing it, The recommendations of this study included the need to raise the attention and awareness of credit - granting decision - makers in Libyan commercial banks about the risks arising from the credit decision - making process and their negative repercussions on banking performance, It also recommended that credit - granting decision - makers be informed of the research and studies conducted in the field of credit decision - making and its relationship to the factors influencing it, in order to be more aware of them and their impact on economic decisions, It also called for directing the attention of credit grantors to the importance of the factors influencing the decision - making process and their effects on credit decisions, and developing their skills in this area so that they can easily discover these factors, thus enabling them to make the appropriate decision regarding accepting or rejecting credit.