The Relationship Between Loan Default and the Financial Performance of Sacco’s in Kenya
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Date
2013-10Author
Keitany, Nancy J
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Loan default is the failure to pay back a loan which may occur if the debtor is either
unwilling or unable to pay its debt. A defaulted loan is a cost to SACCOs in terms of
forgone or delayed interest, high recovery cost and finance cost associated with external
borrowing. The study sought to review the relationship between loan default and the
financial performance of Savings and Credit Cooperative Societies (SACCOs) in Kenya.
The research design used in this study was descriptive design. The design was
appropriate because the study involved in depth information on the relationship between
loan default and the financial performance of SACCOs. Data was collected from the
census of 45 SACCCOs in Nairobi County using secondary data from SASRA, which is
the regulatory body thus the study concentrated on 20 SACCOs. The data was reviewed,
and analyzed using (SPSS version 18) both descriptive and inferential statistics.
The study findings indicated that there is strong negative relationship between the loan
default and the profitability of these SACCOS. The tests showed that the overall
regression model is a good fit for the data as the independent variables statistically and
significantly predict the dependent variable. The regression model is a good fit of the
data. Personality types are predisposed to loan default why credit markets may fail. The
study recommends that SACCO should; continuously review credit policies, establish
irrecoverable loan provision policies, and character of loan applicants.
Citation
Degree Of Master of Business Administration (MBA)Publisher
University of Nairobi School of Business
Description
A research project presented in partial fulfillment of the
requirements of the award of the degree of master of
business administration, university of Nairobi.