The Effect of Credit on Economic Growth in Kenya
View/ Open
Date
2011Author
Mwalungo, Milkah K
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
The objective of the study was to establish the effect of credit on economic growth in Kenya.
Both qualitative and quantitative methods were used to achieve the objective of the study. A
regression model was used to carry out the empirical analysis. The study used secondary data
that was collected from the supervision department of the Central bank of Kenya for a period
of 15 years.
The findings and analysis reveal that private credit advanced has an effect on economic
growth in Kenya.The study used a simple regression model,descriptive statistics and
correlation analysis to establish the effect of credit on economic growth in Kenya.The model
equated economic growth as a function of credit.The results obtained from the regression
model show that there is a positive correlation between credit and economic growth in
Kenya.Commercial banks should therefore expand their financial outreach to the various
sectors of the economy to be able to improve economic growth rate in Kenya.
In view of these findings, the researcher recommends that financial institutions should
endevour to expand their financial outreach. The regulator should also review policies set to
ensure that the low income earners have as much access to credit as the middle and high
income earners. As indicated by the research findings credit is critical to Kenya’s economic
growth.
Citation
MBA ThesisSponsorhip
University of NairobiPublisher
School of Business, University of Nairobi