The effect of credit management techniques on the financial performance of commercial banks in Kenya
Sound credit management is a basic for an institutions in financial sector performance. With declining performance of the institutions due to increasing competition and changing regulatory framework, credit quality is imperative for continued wellbeing of the institutions in terms of financial performance. The greatest hazard in the credit business is loaning cash and not getting it back as with every single budgetary organization. Credit chance specifically is one of the greatest attentiveness toward banks since a portion of the loaning is unsecured. Some of the general population financed are new companies who do not have the capacity to give assurances or security against the cash acquired as assurance of that payment will be done which exposes the lenders. In this way this study tried to evaluate the impact of credit management procedures on the financial performance of business banks in Kenya. The indicator factors of the study were customer evaluation, Collection arrangement and Credit hazard control while the needy variable was money related execution of Commercial Banks in Kenya. This study embraced a descriptive research. The design was fit as it allowed a thorough investigation of the effect of credit management on the money related execution of banks in Kenya. The number of population in the study comprised of all the 45 banks in Kenya. . A census study was used to carry out the research. Data collection instruments that were used included questionnaires, financial statements, annual reports on record and data from the financial market. Primary data was collected using questionnaires where all the concerns on the questionnaire were addressed. Secondary data was collected from annual reports and financial statements. The secondary data from the financial statements included after tax profit, written off debt, total assets and value of loans outstanding. The researcher will administer the questionnaire to each respondent in the study. The questionnaire consisted both open and close ended questions. The closed ended questions was used to test the rating of various attributes and this helped to reduce the number of related responses so as to obtain more varied responses. The open-ended questions will provide additional information that will not have been captured in the close-ended questions. The study revealed that credit management techniques had a significant effect on the performance of the commercial Banks. Therefore the study recommended that there is need for CBK to enhance their client appraisal techniques so as to improve their financial performance.
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