The possibility of using Sherrod model in characterizing Libyan commercial banks loans: an Application study on Jumhoria bank

Abstract

The study aims to test the ability of Sherrod model in classifying the Libyan
commercial banks loans. Having analyzing the data collected from the
financial reports of the sample bank (Jumhoria bank), the study found some findings, the most important of which are: the Sherrod model could be used
to classify loans giving by Libyan commercial banks, where the model placed
loans giving by Jumhoria bank during 2013-2017 in third category, which
mean that the loans are medium-risk loans, Jumhoria bank expanded the
giving loans during 2013-2017 with an increase in the allocation of doubtful
debt during the same period. Based on the findings, the study recommends
some recommendations, the most important of which are: Libyan commercial
banks can use Sherrod model to classify loans granted by them. Libyan
commercial banks can also use the Sherrod model to analyze and evaluate the
attitudes of loan-seeking customers, thereby knowing how well they can pay
their obligations on their due dates.