Credit Information Sharing and Performance of Commercial Banks in Kenya
Kerage, P. M.
Jagongo, A. O.
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A strong and resilient banking system is a foundation of sustainable economic growth. Banks are at the centre of credit intermediation process between savers and investors but credit markets present asymmetric information problems. To alleviate these problems the central bank of Kenya gazetted and operationalised Credit Reference Bureau Regulations in 2009 that govern the licensing, operation and supervision of credit reference bureaus by the Central Bank of Kenya to act as a medium for exchange of credit information. This paper contributes to the emerging body of research by examining how the diffusion of credit information sharing has affected the performance of commercial banks in Kenya. The researchers adopt census survey of all commercial banks licensed under the Banking Act (cap 488 laws of Kenya). The study covers a period of five years from 2008 to 2012 and performance is measured by financial ratios to draw conclusions. The study used both primary and secondary data which was analyzed using both inferential and descriptive statistics and multiple regression analysis. The study established that credit information sharing led to improved financial performance of commercial banks in Kenya