Abstract
This study aims to find out the impact of the lending policies adopted by Jordanian commercial banks on their profitability. This study relied on the descriptive analytical approach to describe and review the theoretical framework of the study. The preliminary information was gathered through a questionnaire prepared for this purpose. The study population consisted of all the commercial banks operating in Jordan, numbering 13 banks during the period 2016-2020. The study concluded that the credit decisions in the Jordanian commercial banks are contributing to about 75.3% of their returns, and there is a statistically significant effect of lending policies (with their combined variables) on the profitability of commercial banks operating in Jordan. Also, the lending policies adopted by the Jordanian commercial banks have interpreted 53.9% of their profitability, and that is due to the strict lending policy adopted by these banks, and this result is adverse of Munyiri’s (2010) results stating that a friendly lending policy will maximize demand and increases bank’s profitability. Depending on the results, the study recommended that the Jordanian commercial banks should focus on a clearly allocated task, responsibilities, and powers within credit policies so that different administrative levels are granted the right to make high-quality credit decisions that enhance the speed of taking a decision, thereby increasing customer’s base and profits.
Highlights
The Jordanian banking sector is one of the important sectors of the national economy
The main hypothesis aims to figure out the impact of lending policies with their combined variables on the profitability of commercial banks operating in Jordan
It is possible to reach the acceptance of the alternative main hypothesis, “There is a statistically significant impact of lending policies on the profitability of commercial banks operating in Jordan”, and reject the null hypothesis, which is attributed to the importance of credit decisions in commercial banks, where credit decisions are the main activity on which they depend
Summary
The Jordanian banking sector is one of the important sectors of the national economy. The Jordanian banking sector is represented by a number of commercial banks that operate together within the internal and external environment of the worldwide economy. The banking sector is considered one of the active sectors in managing the local financial economy and keeping pace with its developments, as the main role of this sector is to provide an institutional framework aims to achieve real investments that support the process of growth and prosperity to its stakeholders in particular, and to the economy in general (Alali, 2019). Despite the achievements of this sector, the current stage is characterized by a set of challenges that faces this sector, either by the lending policies adopted, or by decisions of management, nor by the competitiveness and other development requirements. In order to sustain and maintain their standing and continuity, and in order to be able to meet these challenges, these banks should generate more profits through employing funds efficiently and effectively in order to maximize their wealth and the wealth of shareholders (Alshatti, 2015)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
