Credit Information and Asset Quality of Commercial Banks in Nakuru Town, Kenya

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dc.contributor.authorKaigu, Kinyati John
dc.contributor.authorTheuri, Joseph
dc.date.accessioned2020-11-05T10:06:16Z
dc.date.available2020-11-05T10:06:16Z
dc.date.issued2019
dc.descriptionAn Article Published in International Journal of Current Aspectsen_US
dc.description.abstractThe study sought to establish the effect of credit information on the asset quality of commercial banks in Nakuru Town, Kenya. The specific objectives of the study are to determine the effect of collateral information on asset quality of commercial banks in Nakuru Town, Kenya, to determine the effect of business ratings information on the asset quality of commercial banks in Nakuru Town, Kenya, to determine the effect of consumer identity verification information on the asset quality of commercial banks in Nakuru Town, Kenya, to determine the effect of customers credit status information on asset quality of commercial banks in Nakuru Town, Kenya and to establish the effect of consumer default information details on asset quality of commercial banks. The literature review focused on bank risk management theory, loanable funds theory, Merton’s default risk model and asymmetric information theory. Primary data was collected using questionnaires in order to get accurate results. The study used regression analysis and the findings revealed that Business Ratings and Collateral Information significantly influences up to 59.4% and 17.6% positive variation on Asset quality respectively. This implies that for every one unit increase in business ratings information asset quality increases by 59.4 % while collateral information increases asset quality increase by 17.6 %. It was also observed that consumer default information significantly influences 36.3% positive variation on asset quality. However, it was noted that Customer’s Credit Status Information significantly influences 32.5% negative variation on Asset quality. This implies that for every one unit increase in Customer’s Credit Status Information, Asset quality decreases by 32.5%. Similarly, Consumer Identity Verification Information influences negatively Asset quality by 9.3%. In this study, Business ratings information is the best predictor of asset quality. It was concluded that Collateral information, business ratings information and consumer default information influences positively asset quality. However, consumer identity verification information and customer’s credit status information influences negatively on asset quality. The study recommends that Collateral information should be controlled in order to promote positive loan performance by commercial banks as well as that business ratings information should be adequately provided in order to enhance quality assets of commercial banks.en_US
dc.identifier.citationKaigu, J., & Theuri, J. (2019). Credit Information and Asset Quality of Commercial Banks in Nakuru Town, Kenya. International Journal of Current Aspects, 3(II), 199-211. http://journals.ijcab.org/journals/index.php/ijcab/article/view/18en_US
dc.identifier.issn2616-6976
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/20827
dc.language.isoenen_US
dc.publisherIJCAB Publishing Groupen_US
dc.subjectCredit Informationen_US
dc.subjectAsset Qualityen_US
dc.subjectCollateral Informationen_US
dc.subjectBusiness Ratingsen_US
dc.subjectConsumer Identityen_US
dc.subjectCredit Statusen_US
dc.subjectConsumer Defaulten_US
dc.subjectCommercial Banks in Nakuruen_US
dc.titleCredit Information and Asset Quality of Commercial Banks in Nakuru Town, Kenyaen_US
dc.typeArticleen_US
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