| dc.description.abstract | Kenya has experienced high lending rate regime over the past years by commercial. The
craving for higher profits by commercial has lead to this unending debate about lending
rates charged on loans and advances. Those taking new facilities together with those
already having a facility have had to content with additional funds demanded by banks
inform of increased monthly repayment. The public outcry has been loud, resulting
serious legal battles between borrowers and commercial banks. The central bank has been
urged to intervene in many instances as the public feels that banks are overcharging
lending rates on borrowed funds and thus forcing them to be unable to repay their loans
on time. The above problem has lead to the rise of none performing loans in commercial
banks making banks to declare huge losses.
The aim of this research therefore was to determine if there exists a relationship between
interest rate and the level of non-performing loans as reflected in the books of the various
commercial banks in Kenya. The researcher wanted to find out how the Borrower has
been affected by the increased installments arising from the lending rate change. The
study involved collecting financial statements for the various banks and analyzing them
to determine if there is any relationship between interest rates and non-performing loans.
As a consequent, data for the past five years (2009-2013) was analyzed with the help of
SPSS statistical software and the results presented in form of correlations, regression and
coefficients. Test of significance were further carried out. The results showed that there
was no significant relationship between lending rate and non-performing loans in
commercial banks in Kenya | en_US |
