THE EFFECT OF LOAN LOSS PROVISION ON PROFITABILITY (A CASE STUDY OF FORTY (40) SELECTED RURAL BANKS IN THE ASHANTI REGION)

Abstract

This research work examines the effect of loan loss provision on profitability of forty selected rural banks in the Ashanti Religion. The researchers used both qualitative and quantitative data collection to obtain relevant data from the selected rural banks for the study. Convenient sampling method was used in choosing the respondents for the study. In this research work, the researchers used financial and non financial factors that can affect banking profitability. These factors include: loan loss provisions, interest charged per year, percentage of loan loss that goes into provision, the influence of loan loss on provision and some others The finding indicates that loan loss provision has influence on banks profitability. When good policies and measures are outline and effectively implemented to lower loan loss provision, banks profitability will increase to their advantage.