Effect of Credit Information Sharing on Financial Performance of Sasra Regulated Saccos

Abstract

Today, through the ability to share credit information banks, microfinance institutions, and SACCOs can share information on outstanding loans through the Credit Reference Bureau (CRB). Through credit information sharing lenders of finance can access reports relating to the past credit history of the borrower and the repayment patterns (CIS Kenya, 2018). The CRB provides information on the entire loan book of an individual meaning that one can view past and current repayments and whether they are up to date or they are overdue. The study is aimed at understanding the effect of credit information sharing through a comparison between the periods before the enactment of the bill calling for information sharing and the period after the bill. A descriptive research design was used to analyze the impact of credit information sharing on SACCOs. The study established that financial performance was higher before credit information sharing than after. This underscores the fact that credit information sharing brings about better financial performance of the savings and credit corporations. The findings established a significant difference between financial performance before and after credit information sharing. The study concluded that credit information sharing has helped correct this inequity by letting Saccos and other loaning organizations to gather and part data on millions of potential borrowers, thus allowing lenders to gather information on the solvency of each. Founded on the results, the study endorses that the Government of Kenya ought to issue the credit-information rules and make consciousness for the same so that moneylenders can succumb credit information of their borrowers.