When a borrower's financial situation deteriorates to the point where an asset's value is diminished, the financial institution taking on the loan runs the risk of incurring losses. This study seeks to illuminate the fundamentals of a “credit risk management” (CRM) system for commercial banks (CBs) in an under developed country. with the ultimate goal of reducing the difficulties caused by delinquent borrowers' loan obligations. The primary data used for this came from in-depth interviews with CBs and bank’s management officials responsible for “credit management”, while the secondary data came from a slew of relevant documents. Credit risk can be controlled and reduced, as demonstrated by the investigation, so long as strong strategic approaches are adopted and followed. In light of this, it follows that a bank's strategy is crucial to the success of a CRM system.