Relationship between Lending Requirements and Loan Performance of Deposit Taking Savings and Credit Cooperative Societies in Kenya
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Date
2023-11
Authors
Baariu, Jotham Gitonga
Njoka, Charity
Journal Title
Journal ISSN
Volume Title
Publisher
EdinBurg
Abstract
Savings and Credit Cooperative Societies play an important role in providing financial services
to many Kenyans. SACCOs have been identified as crucial growth engines in many countries
across the world. According to the Sacco Society Regulatory Authority (SASRA) Annual
report for 2021, the amount of NPLs increased from Kes 25.79 billion in 2019 to Kes 39.86
billion in 2020. The goal of this study was to determine the relationship between lending
requirements and loan performance of deposit-taking SACCOs in Kenya. The anchoring theory
was credit default theory. The study used a causal approach research design with a target
population of the study 11 SACCOs in Meru County selected using purposive sampling.
Results showed that revealed a strong and positive relationship between the lending
requirement and loan performance. The study concluded that lending requirements and loan
performance are positively and significantly correlated. The study recommends that DTSACCOs should have a credit risk management policy that guarantees loan repayment,
accurate estimation of loan defaults, and suitable mitigation measures.
Description
Article
Keywords
Lending Requirements, Loan Performance, Deposit Taking Savings and Credit Cooperative Societies
Citation
Baariu , J. G. ., & Njoka, C. . (2023). Relationship between Lending Requirements and Loan Performance of Deposit Taking Savings and Credit Cooperative Societies in Kenya. Journal of Finance and Accounting, 3(4), 1–10. Retrieved from https://edinburgjournals.org/journals/index.php/journal-of-finance-and-accountin/article/view/222