Analysis of Credit Terms and Loans Performance among Deposit-Taking SACCOS in Nairobi City County, Kenya
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Date
2024-02
Authors
Nyabwari, Jared Okumu
Kimutai, Caroline
Journal Title
Journal ISSN
Volume Title
Publisher
EdinBurg
Abstract
Deposit-taking SACCOs in Kenya have consistently recorded an increasing rate of loans that
are not honored as and when they become payable throughout the years. According to SASRA
2021 Sacco supervision report, the NPL in the DT-SACCOs was 5.23% in 2016, 6.14% in
2017, 6.30% in 2018, 6.15% in 2019, 8.39% in 2020, and 8.86% in the years 2021. This
persistent increase in NPL among the DT-SACCOs is worrying, and the cause has not been
established conclusively. This study sought to analyze how credit terms aspect of CMP affects
loan performance in DT-SACCOs within the City County of Nairobi. A descriptive research
approach was adopted in this research and the target population included 47 DT-SACCOS. A
census approach was used and the 47 credit managers were the targeted responders. Descriptive
and inferential statistics were employed to analyze the data collected. The findings revealed
that credit terms had a negative and significant effect on loan performance. The study
concluded that credit terms reduce loan performance among deposit-taking SACCOs. The
research recommends that SACCO’s management should have well-stipulated credit terms that
are understandable to the borrowers. The management should have flexible loan repayment
periods to help them reduce the NPLs.
Description
Article
Keywords
Credit Terms, Loans Performance, Deposit-Taking SACCOs
Citation
Nyabwari , J. O. ., & Kimutai, C. . (2024). Analysis of Credit Terms and Loans Performance Among Deposit-Taking SACCOS in Nairobi City County, Kenya. Journal of Finance and Accounting, 4(1), 1–8. Retrieved from https://edinburgjournals.org/journals/index.php/journal-of-finance-and-accountin/article/view/246