Credit Risk Management and Performance of Loan Portfolios among Saccos in Kisumu County, Kenya

Abstract

The purpose of this study was to determine the effect of credit management on performance of loan portfolios among SACCOS in Kisumu County, Kenya. The study sought to determine the effect of credit risk identification, risk analysis, risk monitoring and control and credit approval on performance of loans portfolio among SACCOs in Kisumu Kenya.Descriptive research design was used. The sample size was 56 credit managers in the deposit taking SACCO’S who were selected using purposive sampling. Data collected was analyzed using descriptive statistics that will yield tables, charts, mean and standard deviation that was used to give meaning to the data collected. The study found a positive and statistically significant effect of credit risk identification, credit risk analysis, credit risk monitoring and credit approval on performance of loan portfolios of the SACCOs studied. Hence, the study concludes that much effort should be directed to credit risk management to achieve improvement in performance of the loan portfolios. The study therefore recommends that all SACCOs understudy should identify their credit risk, perform credit risk analysis, perform credit risk monitoring and control and perform approve credit so as to improve their loan performance. The Study finally suggested further studies on the credit risks management on performance of loan portfolios among banks in Kenya.