CREDIT RISK MANAGEMENT BEYOND COMPLIANCE: A STRATEGIC FRAMEWORK FOR ENHANCING FINANCIAL PERFORMANCE IN REGULATED ENVIRONMENTS
Aisha Ahmad Ishaq, Mu’azu Sa’idu Badara, PhD, Salisu Umar, PhD and Ahmad M Yabagi, PhD
Volume 12 Issue 1
Abstract
In the contemporary financial landscape, credit risk management (CRM) has emerged as a critical component of regulatory compliance and operational stability. However, conventional approaches continue to treat CRM primarily as a compliance-oriented function, often marginalizing its strategic potential. This conceptual study challenges that paradigm by proposing a reframing of CRM as a dynamic capability that can drive sustainable financial performance in regulated environments. Drawing on the resource-based view (RBV) and dynamic capabilities theory, the study presents an integrative framework that positions CRM not merely as a defensive tool but as a proactive enabler of strategic advantage. Practical, regulatory, and academic implications are discussed, offering guidance for financial institutions, policymakers, and scholars. By bridging the gap between risk governance and strategic management, this study contributes to a deeper understanding of how CRM can evolve into a performance-enhancing capability within financial institutions. Keywords: Credit Risk Management, Regulatory Compliance, Financial Performance, Dynamic Capabilities, Resource-Based View
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