CREDIT RISK AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KISII COUNTY

CONSTANCE CHEPKIRUI BWOGO, JULIUS MIROGA, PhD

Abstract


The study focused on assessing the relationship between Credit Risk management practices and financial performance of commercial banks in Kisii County. The study was anchored on the theories namely; Agency theory, Interest rate parity theory and International Fischer’s effect theory. The study was based on the objective of determine the influence of credit risk survey research design. The targeted population was on 21 commercial banks in Kisii County. The sample included the whole population since it was manageable. The Record survey sheet was used as an instrument of data collection. Piloting was done on the respondents from Kisumu County. The result indicated that Pearson Correlation coefficient was represented with a strong, positive relationship between Credit risk and financial performance of commercial banks in Kisii County, Kenya. Census technique was applied on all the targeted institutions. Descriptive and inferential analysis of the data for the study was analyzed by the use Statistical Package of Social Sciences (SPSS). Linear regressions will be used to show the relationship between the variables. The findings indicated that Credit Risk Management had a significant positive influence on Financial Performance. The study recommends the management of various Institutions to embrace the professional Credit Risk Management practices as there is an improvement in Finance Performance. The study recommends for further study using similar variables but different methodology.

Key Words: Credit Risk, Risk Management Practices and Financial Performance

CITATION: Bwogo, C. C., & Miroga, J. (2024). Credit risk and financial performance of commercial banks in Kisii County. The Strategic Journal of Business & Change Management, 11 (4), 432 – 442. http://dx.doi.Org/10.61426/Sjbcm.v11i4.3096


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DOI: http://dx.doi.org/10.61426/sjbcm.v11i4.3096

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