Credit Risk Management and Financial Performance of Deposit Taking Savings and Credit Co-Operative Societies in Nairobi City County, Kenya
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Date
2019-04
Authors
Bwire, Charity Akochi
Omagwa, Job
Journal Title
Journal ISSN
Volume Title
Publisher
Globeedu Group
Abstract
The study sought to determine the relationship between credit risk management and financial performance of deposit
taking SACCOs in Nairobi City County. There is substantial empirical evidence focusing on the relationship between
SACCOs and their financial performance but few studies if any, have specifically focused on deposit taking SACCOs. In this
regard, there is need to fill the research gap that exists as well as add to the few empirical studies that exist. Most of the
empirical studies have found a negative relationship and this warranted further consideration hence, need for the
current study. The research design used was descriptive in nature with data being collected from 40 deposit taking
SACCOs. Questionnaires were administered to 120 respondents three from each deposit taking SACCO in Nairobi City
County through purposive sampling. Data was analyzed using standard deviation analysis, multiple regression and
correlation coefficient. The study found that credit monitoring has a significant effect on financial performance of
deposit taking SACCOs (p-value=0.0146). Similarly, the study established that credit appraisal has a significant effect on
financial performance (p-value=0.0229) whereas credit risk control was found to have a significant effect on financial
performance (p-value=0.0211). Hence, the study concludes that credit risk management is a key factor in explaining the
financial performance of deposit taking SACCOs in Nairobi City County, Kenya.
Description
Research Article
Keywords
Credit risk, Credit risk management, Credit monitoring, Credit appraisal, Financial performance, Deposit taking savings and co-operatives