The relationship between techniques for managing non performing loans and the level of nonperforming loans of commercial banks in Kenya
View/ Open
Date
2010-11Author
Kiragu, Patrick M
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
It is argued that non-performing loans are one of the major causes of banks failure and hence
economic stagnation. In response to the problem of non-performing loans, banks have to
adopt effective management techniques for non performing loans. This study sought to
establish the relationship between techniques for managing non performing loans and the
level of non performing loans of commercial banks in Kenya.
Causal design was chosen as the study sought to establish the relationship between
techniques for managing non performing loans and level on non performing loans of
commercial banks in Kenya. Causal design was chosen because it enables the researcher to
generalise the findings to a larger population. The population of this study consisted of all
the forty three commercial banks in Kenya. Primary data was collected using structured
questionnaires while secondary data was collected from journals, magazines and banks’
annual reports. To enhance reliability of data, test-retest method was used by administering
questionnaires twice to the same respondents.
The research used both quantitative and qualitative data and statistical package for social
sciences (SPSS version 17) package was used for data analysis. Regression analysis was
used to establish the relationship between techniques for managing non performing loans
and the level of non performing loans of commercial banks in Kenya.
The study concludes that effective management of non performing loans in commercial
banks helps to improve the financial performance of banks as interest on loans is the biggest
income of banks and increases the liquidity position of banks, helps in protecting the banks
reputation and reduces loan losses and leads to quality of loan portfolio for better return to
the shareholders and it reduces time wastage on unproductive resources being diverted
towards loan recovery whereby such resources can be channelled to other more productive
areas.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
The following license files are associated with this item: