International Journal of Scientific Research and Engineering Development-– Volume 4 Issue 1, Jan-Feb 2021 Available at www.ijsred.com ISSN : 2581-7175 ©IJSRED: All Rights are Reserved Page 500 Credit Risk Management Strategies of Deposit Money Banks on Loan Facilities Dr. Banjo, Kudirat Adeola Department of Insurance School of Management and Business Studies Lagos State Polytechnic, Ikorodu, Lagos State ----------------------------------------************************----------------------------------------------- Abstract The collapse of many banks is due to poor management of credit facilities. The objectives of this study are to investigate loan supervision and monitoring as a strategy for effective credit risk management.The design for the study was a survey design.The targeted population of this study comprises of all thestaff of the 5 top Deposit Money Bank operating in Nigeria. This study revealed that loan supervisor and monitoringare strategic tool for effective credit risk management, also, collateral security is a strategic tool to effective credit risk management. Arisen from the findings of this study, the study recommended that banks should ensure their credit risk management strategy is effective and for every new product (in form of loan) introduced, there should be efficient loan supervisor and monitoring, and banks should ensure that no loan is granted without corresponding collaterals, because, collateral security is a robust strategic tool to effective credit risk management. Keywords: Credit Risk Management Strategies, Collateral, Deposit Money Banks, LoanFacilities ----------------------------------------************************----------------------------------------------- I. INTRODUCTION Deposit money Banks today are the largest financial institutions around the world, with branches and subsidiaries throughout the world. These banks offer different products and services to the public, and because of their high liquidity, these intermediary operations are quite risky. Therefore, the banks are faced with diverse risks in the course of carrying out their operations. In view of the risks inherent in bank lending and the need to minimize or contain the risk (since they cannot be avoided entirely), and in view of the need for liquidity and profitability consistence with safety and regulatory constraints, the central issue in managing the lending portfolio is balancing the potential risk with returns. This involves effective credit risk management strategies and credit analysis. The borrower’s ability to repay the loan has to be determined, the borrower capacity and capital have to be assessed (Nwankwo, 2010). Banks are corporate bodies; they have the following objectives which are; profit maximization, maximization of owners’ wealth, corporate social responsibility Loans and advance constitute the major source of operating income of banks as the act as the most profitable asset for employment of bank fund. As much as banks generates income through interest accruable to those facilities, the also run the risk of losing both the interest and principal if the credit risk management strategies employed are weak. Credit risk management strategies on the other hand, is one of the most important and challenging functions of all banks. It is the act of managing debtors who might have received services from banks in exchange for promise of repayment in future. Credit risk management strategies is faced with credit risk which is the most significant risk faced by banks. The success of their business depends on accurate credit risk management RESEARCH ARTICLE OPEN ACCESS