Evaluation Strategies of Credit Risk used by Commercial Banks Listed in Palestine Stock Exchange

This study explains the "evaluation of the credit risk strategies used by commercial banks listed on the Palestine Securities Exchange" through the methods used by banks in assessing customers' credit requests, whether banks differ in the use of these methods and whether they differentiate between customers in using these Methods. The questionnaire was designed to suit the objectives of the study. Twenty-one questionnaires were distributed to commercial banks in the credit facilities and loans department. These are: National Bank, Palestine Investment Bank, Bank of Palestine, and Al Quds Bank. We excluded Palestinian Islamic bank and Arab Islamic bank, because of the different nature of the work of loans in Islamic banks compared with commercial banks in terms of: Murabaha, Musharka, it adopts laws in line with Islamic rules. The following statistical tools were used: average percentage, Ranking and Chi square. It was found that all commercial banks in Palestine use the above methods of evaluation, as they place more emphasis on 5C‟s, LAPP Method, Past Experience, 5P‟s and Financial Analysis respectively. It was also found that natural persons and NGOs were treated in the same way by banks in assessing their credit applications; however, they differed in the treatment of business firms. The researchers recommend the following: First, more systematic and efficient analytical procedures are used for assessing the three risk categories according to the nature of transaction, cause and effect. Second, establishing an industry-wide institute for conducting economic studies relative to each financial intermediary with data bank for their information system.