Financial risk management area credit: a study in a credit cooperative located in the west of Santa Catarina

Abstract

The management of credit risk is important for the efficient conduct of the activities of financial institutions, but there isn´t a congruence with respect to its use. Some institutions use professional judgment and non-standard models, but there are those that use more sophisticated quantitative models. The study aims to determine how the monitoring, control and evaluation of the credit risk of a Credit Union with headquarters located in western Santa Catarina. The methodology is characterized as the objectives as exploratory as to the procedures as a case study conducted in a Central Credit Union with headquarters located in western Santa Catarina. The approach to the problem is a qualitative one. Data were collected through semi-structured interviews, observation without participation, and no document analysis. The results indicate that the institution has no knowledge about the methodologies of risk management and management is done intuitively. The results show that the introduction identify risks, but no tracking in all circumstances. Finally, the management of credit risk is fragile due to some errors in the assessment findings to release credit of some customers.