INFLUENCE OF MOBILE CREDIT MANAGEMENT ON THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN MOMBASA
Abstract
This study examined the effect of mobile credit management on the financial performance of commercial banks in Kenya. This inquiry employed a descriptive survey research design. Six commercial banks were represented by significant branches of Tier 1 commercial banks in Mombasa CBD that offer mobile credit services to their consumers. The study used 71 respondents from six selected commercial banks. The study collected data through the use of questionnaires. Permission was also requested from the commercial banks in the Mombasa County under study to collect data. The Statistical Package for Social Sciences (SPSS) version 23 was used to assemble and analyze the data. The data were evaluated using descriptive and inferential statistics. The study discovered that all independent variables had a p-value less than the 0.05 level of significance, indicating that there is a substantial association between mobile credit management and commercial banks' financial performance in Kenya. The study confirmed that credit approval is a critical process that must be completed each time a member requests a loan in order to avoid extending credit to clients who are financially unable to repay the credit borrowed in accordance with the terms and conditions stipulated, taking into account key credit appraisal characteristics such as the member's credit history, the client's disposable income, collateral substitutes, and other loan delinquencies. The study recommended that banks should monitor and carry out thorough analyses of all applications for mobile credit and advances, including credit history, before applicants receive credit approvals to reduce their non-performing credit to a minimum by increasing the focus on the ability to repay. Commercial banks in Mombasa need to strengthen their mobile credit customer assessment procedures in order to improve their financial performance. Through customer assessment approaches, Kenyan commercial banks would be able to identify loan worth customers and therefore reduce default levels and their un-performing loans thus enhance their financial performance.
Key Words: Mobile Credit, Approval Processes, Risks Identification, Loan Procedures, Risk Analysis
CITATION: Magolo, M., Muli, S., & Egondi, P. (2022). Influence of mobile credit management on the financial performance of commercial banks in Mombasa. The Strategic Journal of Business & Change Management, 9 (1), 403 – 422.
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DOI: http://dx.doi.org/10.61426/sjbcm.v9i1.2193
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