| dc.description.abstract | Banks play a significant role in the economic growth and development of
any country. They are the main stimulus of economic growth. However,
they face several challenges. The main one being, disbursement of funds in
quality assets (loans and advances). This study is geared towards
ascertaining the following objectives: whether, banks use the 7Cs credit
appraisal model and the impact/effect of the use of this model on the level
of non performing loans of commercial banks of Kenya.
The study was conducted through a survey on the 43 commercial banks
registered and operating in Kenya. The study covered the entire banking
industry in Kenya hence no sampling was required. Data was collected
using a semi-structured questionnaire administered to bank managers.
The data collected was analyzed by ratios, inferential and quantitative
statistics.SPSS version 17 was used in capturing and building the data
and thereafter analyzed through the use of factor analysis. The findings of
the study was that; commercial banks in Kenya use the 7Cs credit
appraisal model in credit risk,evaluation,assesement and appraisal
processes .To remain formidable in business, commercial banks should use the 7Cs
credit appraisal model considering that, credit risk is the major risk that
banks attach a lot of importance to. It should be noted that most bank
failures worldwide have been attributed to poor credit policies they have
employed in their businesses. Commercial banks in Kenya use the 7Cs
credit appraisal model in credit risk assessment, evaluation and appraisal
processes and the use of the 7Cs credit appraisal model has enabled them
to reduce the level of non performing loans. Capacity was found to be the
most significant of all the credit appraisal variables followed by character,
condition, common sense and control in that order. | en |
