Factors affecting loan repayment among customers of commercial banks in Kenya: a case of barclays bank of Kenya, Nairobi county
Abstract
The purpose of this study was to investigate factors affecting loan repayment among
customers of commercial Banks in Kenya with specific reference to Barclays Bank of
Kenya Limited. The study achieved its purpose through three objectives namely to
determine the effect of Lenders factors on loan repayment among customers of
commercial Banks in Kenya, to find out the extent to which Borrowers factors affect loan
repayment among customers of commercial Banks in Kenya and finally to establish the
effect of loan factors on loan repayment among customers of commercial Banks in
Kenya. The study included staff of Barclays Bank of Kenya which includes Credit
Administrators and Relationship Managers within the Branches of Nairobi County. It also
included both mass market customers and the relationship managed customers. The target
population included 78 respondents. The research design used was descriptive statistics.
The study reviewed relevant literature with the aim of establishing a gap which the
research fulfilled. Methods of collecting data were questionnaires and interview
schedules. This study concludes that there is a significant relationship between
firm/group factors and the loan repayment among customers of commercial banks in
Kenya. The study also concludes that there is a significant relationship between
individual borrowers’ factors and the loan repayment among customers of commercial
banks in Kenya. The study further concludes that there is a significant relationship
between loan factors and the loan repayment among customers of commercial banks in
Kenya. The study recommends that commercial banks need to have mandatory
supervision borrowers on loan utilization and repayment. The study also recommends
that banks should apply efficient and effective credit risk management that will ensure
that loans are matched with ability to repay, no or minimal insider lending, loan defaults
are projected accordingly and relevant measures taken to minimize the same. The study
further recommends that commercial banks should pool together and establish a credit
information bureau to which reference can be made before a loan is disbursement. The
study recommends that commercial banks should also apply rigorous policies on loan
advances so as loans are awarded to those with ability to repay and mitigate moral
hazards such as insider lending and information asymmetry.
Citation
Masters Of Arts Degree In Project Planning and ManagementPublisher
University of Nairobi Facuty of Arts
Description
A research project report submitted in partial fulfillment
for the requirements of Masters Of Arts Degree In Project
Planning and Management, University Of Nairobi
Collections
- Faculty of Education (FEd) [5968]