| dc.description.abstract | This study sought to determine the relationship between Non-performing Loans and its
determinants among Commercial Banks in Kenya. The research methodology used was a
Descriptive survey design and the population of study was all Commercial Banks in
Nairobi region.
Data collected was edited for accuracy, uniformity, consistency and completeness and
arranged to enable coding and tabulation for final analysis. The study also used multiple
linear regressions to analyse the data.
The study found out that a number of determinants affected loan defaults among them
level and sources of income was the greatest. Poor credit analysis did have a significant
impact on loan defaults as well as a loanee’s commitment to loan repayment. Rate of
interest, loan repayment periods, type of loans also contributed to loan defaults. Character
of a loanee was most considered when appraising loan applications being one of the
characteristics included in the credit scoring card. As a result, it was clear that all banks
loan books contained a significant level of non- performing loans.
The study recommends that Commercial Banks should put more emphasis on
implementation of credit risk management techniques and further research to be done on
whether collateralized assets are less risky as compared to non-collateralized assets. | en |
