Tare Olorogun
In today’s fast-evolving financial ecosystem, credit risk remains one of the most significant concerns for banks and financial institutions globally. In Nigeria, the issue is particularly critical given the high levels of Non-Performing Loans (NPLs) and the regulatory push towards recapitalisation. Credit risk, simply put, refers to the potential that a borrower may fail to meet their obligations in accordance with agreed terms. It is the risk of default when a borrower does not pay back the interest or principal on time and it affects everything from a bank’s profitability to its solvency and reputation.