Determinants of Debt Collection Management of the Financial Institutions in the Kingdom of Bahrain

Abstract

The performance of a financial institution engaged in extending credits is determined by the effectiveness of their efforts to collect the payment once it became due. The identification of the possible challenges related to debt collection helped in proactively planning on how to deal with these issues. The topic represents a demanded study for the Kingdom of Bahrain since it is crucial for the financial institutions to maintain good strategy of debt collection as its greatly affect their financial status. This study assessed the determinants of debt collection management of the financial institutions in the kingdom of Bahrain. Its main objective is to analyze the effects of staff competency, collection’s resources as well as collection’strategies to the debt collection management. The research was conducted through the use of questionnaire for the employees working as debt collectors of a different financial institutions in Bahrain. The sample size was 112 respondents determined through the simple random  sampling method. Multiple regression analysis methodology applied for analyzing the data. Results of the study showed that the null hypotheses are rejected, which implied that staff  competency, collection’s resources and collection’s strategies have significant effects in debt collection management of the different financial institutions in Bahrain. It’s recommended that  financial institution should make sure that employees are equipped with the necessary skills, knowledge and competency of their job, the collection’s resources needed to perform the debt collector job is provided and that the debt collection policies and strategies in place are robust.