Borrowers’ Non-Financial Information and Quality of Micro, Small and Medium Enterprise Loans among Commercial Banks in Nairobi City County, Kenya

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dc.contributor.advisorJAMES M. MUTURIen_US
dc.contributor.authorMemba, Indiazi Martin
dc.date.accessioned2023-02-20T06:16:56Z
dc.date.available2023-02-20T06:16:56Z
dc.date.issued2022
dc.descriptionA Research Project Submitted to the School of Business in Partial Fulfillment for the Award of Degree in Master of Business Administration, Finance Option of Kenyatta University, November, 2022en_US
dc.description.abstractThis study was undertaken to address the increasing loan defaults in most commercial banks that are domiciled in Nairobi County as captured by Central Bank of Kenya and investor briefing presentations by the listed commercial banks. This trend is worrying since loan delinquency has a financial impact on the performance of commercial banks including provisions for expected credit losses and the follow up costs incurred by commercial banks in the process of debt collection and remedial management. The research sought to assess the relationship between non-financial customer information among micro, small and medium enterprises repayment of loans among commercial banks in Nairobi City County. The specific objectives of the study focused on the effect of borrower’s personal characteristics, borrower’s previous loan borrowing history and borrower’s business characteristics on micro, small and medium enterprises loans quality in the county. Descriptive research design was employed in undertaking the research. The target population of the study was micro, small and medium enterprises business owners operating within the county. Out of this population, a sample of one hundred business owners was undertaken in executing the data collection tools. The researcher obtained both primary and secondary data with the primary data making use of semi-structured questionnaires while secondary data obtained from Central Bank of Kenya supervision reports, bank’s annual financial reports and quarterly investor briefing presentations. The above questionnaire generated respondents’ data, whose analysis was undertaken using both inferential and descriptive statistics. After analyzing the above data, the researcher presented the results thereof in form of tables for ease of understanding by the users. The analysis focused on the relationship between borrower’s personal characteristics, borrower’s previous loan borrowing history and borrower’s business characteristics and micro, small and medium enterprises loans quality in the county. From the research, borrower’s personal characteristics including gender, education level, marital status and age had an impact on loan repayment. In the same breath, borrower’s business characteristics including type of business and the business age had an impact on loan repayment. Finally, borrower’s borrowing history including number of times the borrower had borrowed before and the ease with which he repaid the loans had an impact on loan repayment. In conclusion, borrower’s personal characteristics, borrower’s previous loan borrowing history and borrower’s business characteristics have an impact on micro, small and medium enterprises loans quality in the county. The study therefore recommends that Institutions involved in lending to micro, small and medium enterprises should review their micro, small and medium enterprises lending policies to not only take care of financial ability to pay but also the customer’s willingness to pay which is majorly exhibited by non-financial information. The non-financial information includes but is not limited to personal borrower information including age, gender, marital status and education level. The other non-financial information includes business information on the business age and type. Lastly, non-financial information on frequency of historical borrowings and the ease of repayment of the historical borrowings is also criticalen_US
dc.description.sponsorshipKenyatta Universityen_US
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/24798
dc.language.isoenen_US
dc.publisherKenyatta Universityen_US
dc.subjectBorrowers’ Non-Financial Information and Quality of Micro, Small and Medium Enterprise Loans among Commercial Banks in Nairobi City County, Kenyaen_US
dc.titleBorrowers’ Non-Financial Information and Quality of Micro, Small and Medium Enterprise Loans among Commercial Banks in Nairobi City County, Kenyaen_US
dc.typeArticleen_US
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