Credit Scoring Practices and Non-performing Loans in the Kenyan Commercial Banks
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Date
2005Author
Mutie, Christopher M.
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
This study was carried out to achieve two objectives, to evaluate the credit scoring practices
in Kenyan commercial banks and to assess the relationship between these credit scoring
practices and non-performing loans.
The first objective was necessitated to the fact that, in the developed world, the use of credit
scoring practices by banks was widely documented but in Kenya, information on the extent
of use of credit scoring practices was non- existent. Data was collected using questionnaires
from 43 commercial banks in Kenya as at end of the year 2004. The findings were that 62%
of the banks used credit-scoring practices compared to 38%, which never used.
Analyzing the level of non-performing loans measured by assets quality ratio and comparing
this with the credit scoring practices using correlation analysis achieved the second objective.
The results indicated a negative relationship between credit scoring practices and nonperforming
loans with a correlation coefficient of -0. 773 ...
Publisher
School of Business, University of Nairobi
Description
Masters of Business Administration (MBA)