ABSTRACT
This study assessed the impact of credit risk on the interest rate spreads in Stanbic bank. It was guided by three objectives including; examining the relationship between the loan security and interest rates of the bank, to examine the effect of loan monitoring and control on the interest rates of the bank and examining the effect ofloan appraisal on the interest rates of the bank. The study used quantitative research design. A sample of 30 respondents was selected including loan officials, bank manager, accountant, internal auditor and customers from a population of 35. Both questionnaire and interview guide data collection tools were used and data analysis was carried out using a statistical package (SPSS) and their meanings were contextualized, interpreted and organized according to their sources. Findings indicated that granting loans to friends and relatives easily results to poor loan recovery and hence poor interest rate, banks use qualitative loan assessment methods to make loan granting dec