Debtors Management and Financial Performance of Selected Microfinance Institutions at Nairobi City County in Kenya
Moranga, Getii Kevin
MetadataShow full item record
The purpose of this study was to assess the effect of debtors management on the financial performance of selected microfinance institutions (MFIs) at Nairobi County in Kenya. The independent variables for debtors management were: debt collection policy, internal control systems, client appraisal and legal framework. On the other hand, the dependent variable was financial performance of selected MFIs at Nairobi County in Kenya. Primary data was collected by the aid of self administered questionnaires and analyzed using multiple regression analysis. Both descriptive statistics and inferential statistics were determined. The nine licensed MFIs in Nairobi City, Kenya by the CBK as at 31st December 2014 were the target population of the Study. In each of the 9 MFIs, four individuals were purposively selected to participate in the study as respondents; these were the Branch Manager, Credit Officer, Debt Recovery Officer, and Finance Officer and hence the sample size was 36 Officers in the 9 MFIs. With the aid of SPSS version 21.0 and Excel software, quantitative results were tabulated and presented in the form of charts, bar graphs, and narratives. The study found out that debt collection policy, legal framework and internal control systems are statistically significant in influencing financial performance of selected MFIs at Nairobi City in Kenya. The study further established client appraisal had no statistically significant effect on financial performance of MFIs at Nairobi city in Kenya. The study found out that internal control systems had a significant effect on financial performance of MFIs in Nairobi city Kenya. The research recommends that all MFIs should have established debt collection Policy, adopt internal control system, closely monitor implementation of internal control systems and that the MFI Managers and the regulators should put more emphasis on compliance procedures.