Non-performing loans management in banking and liquid creditliquidation by asset management companies

Today, financial institutions–particularly banks-are exposed to manyrisks during their operations. These risks can be listed as exchange rate, interest,liquidity and credit. The risks that credit institutions encounter and are mostaffected by are the credit risks. When the relevant credit receivable is removedfrom the standard receivable, the concept of non-performing loans occurs. The fact that non-performing loans become more than the acceptable rateis unfavourable for both the bank and the economy. Therefore, the process beforeand after the disbursement of credit should be managed successfully by thebanks. Meanwhile, banks continue their main activities, overtime for non-performing loans will result in unhealthy progress in both processes. At thispoint, asset management companies get involved. Asset management companiesare known as the institutions that take over the uncollectible andnon-performing loan sof the lending institutions by collecting and liquidating them and have avital placefor thebanking sector.