The Effect of Credit Information Sharing on the Non Performing Loans Among Commercial Banks in Kenya
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Date
2013-10Author
Ocharo, Frank O
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Commercial banks in Kenya have had a high rate of loan default from the borrowers
which have caused significant losses to the banks. This is attributed to existence of
information asymmetry where commercial banks have varied credit information and
credit history about their borrowers. The credit seekers have taken this shortfall to get
loans from different commercial banks which increases their rate of default because they
might fail to service back all the loans. This study determines the effect of credit
information sharing on the non performing loans among Kenyan commercial banks.
The current study used data collected from secondary sources of published financial
statements over the period of 2008 to May 2013 and employed a bivariate regression
analysis. Data was captured and analyzed using SPSS. The results indicate a negative
effect that is non performing loans tend to reduce with increase in credit information
sharing. The results provide significant effect of credit information sharing on nonperforming
loans.
The results concur with literature which provides a positive effect of credit information
sharing on non-performing loans, therefore Central Bank of Kenya and commercial banks
through supervision and loan monitoring can reduce the level of non-performing loans by
increasing credit information sharing by formulating rules and regulations to register
more credit reference bureaus to enhance credit information sharing environment.
Citation
Ocharo,Frank O.;October,2013.The Effect Of Credit Information Sharing On The Non Performing Loans Among Commercial Banks In Kenya.Publisher
University of Nairobi School of Business