EFFECT OF CUSTOMER CREDIT RISK MANAGEMENT ON LOAN PERFORMANCE IN KAKAMEGA CENTRAL BUSINESS DISTRICT; KENYA
Abstract
Loan performance refers to the financial soundness of a financial institution on the performance of their disbursed loan to various sectors. Savings and Credit Cooperative Societies (SACCOs) operate in an environment of considerate risks and uncertainty. Credit management is one of the main challenges faced by financial institutions as well as the savings and credit cooperative societies in many parts of the world. Thus, the specific objective of the study was to assess the effect of Customer Credit Risk Management Practices on Loan Performance of SACCOs in Kakamega Central Business District; Kenya. The study applied the descriptive research survey design and the target population of the study was SACCO staff members; Credit and Operation managers from the registered deposit taking SACCOs in Kakamega County; Kenya. The study applied census technique on the study target population since it was manageable. The data collection instrument included structured questionnaires. The study employed computer software of Statistical Package for Social Sciences (SPSS 24) to generate and analyze data in order to respond to descriptive statistics; frequency, mean and standard deviation. Furthermore, the software was applied on Inferential Statistics that led to generation of statistical results of correlation among the variables. Regression analysis was done and results were based on complying with the objectives of the study. The Conclusion was that Customer Credit Risk Management had a significant influence on Loan Performance of SACCOs in Kakamega Central Business District; Kenya. The recommendation of the study was that the SACCOs should embrace Customer Credit Risk Management Practices since it improves Loan Performance.
Key words; Customer Credit Risk Management, Loan Performance
CITATION: Yatoli, S. S., & Juma, D. (2020). Effect of customer credit risk management on loan performance in Kakamega Central Business District; Kenya. The Strategic Journal of Business & Change Management, 7(3), 1338 – 1349.
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DOI: http://dx.doi.org/10.61426/sjbcm.v7i3.1745
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