The Effect of Interest Rate on the Uptake of Loans: The Case of Commercial Banks in Kenya
Guyo, Abduba U.
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The objective of this study was to determine the effects of interest rate capping on the uptake of loans among commercial banks in Kenya. The study adopted descriptive research design. The population of the study was the forty-two commercial banks registered with the Central Bank of Kenya. The study used secondary data collected from the Central Bank of Kenya. The data was analyzed using multiple linear regression technique. The study established that there was significant negative relationship between capping of interest rate capping and uptake of loans among commercial banks. From the findings, the loan growth in commercial banks had declining trends in the periods after introduction of interest rate caps and hence strongly confirming that the approach has nosedived to address the market failure as expected by the government. The study recommends that the government through Central Bank and KBA to advocate for more market based regulations which would ensure affordable and accessible financing for the small businesses and startups hence promoting enabling environments for entrepreneurial activities in the country.
University of Nairobi
A Management Research Project Report Submitted In Partial Fulfillment of the Requirement for the Award of the Degree of Master of Business Administration, University of Nairobi
RightsAttribution-NonCommercial-NoDerivs 3.0 United States
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