A survey of the credit risk management practices of commercial banks in Kenya
The study set to explore the credit risk management practices by commercial banks in Kenya. Emphasis was on the following; understand the process of credit risk identification by commercial banks, the extent to which commercial banks classify and monitor credit risks, to identify the various practices that the commercial banks adopt in managing the credit risks and analyze how these commercial banks monitor/gauge the success of the various policies adopted. Primary data was collected through questionnaires and distributed to commercial banks operating in Kisumu. Data collected was analyzed by use of descriptive statistics and SPSS (version seventeen) was used for the purpose ofthe analysis. Results indicated that commercial banks have in place credit risk management practices. This is the case when it involves understanding the credit risk, identification, analysis/assessment and monitoring. Much of the information was from credit departments who are mainly involved in client appraisals and evaluation. The study's major limitation was the unwillingness by the commercial banks to give out information pertaining to the subject matter. The respondents were mainly citing the strict rules that govern the release of such information. Given that this study was limited to credit risks, it was recommended that a similar study be carried out to cover other risks that affect this industry to forewarn the players in this sensitive but important industry to take great care as they seek to grow, expand and at the same time win the confidence of their customers.