Abstract: The study focused on analyzing credit information sharing effect on Commercial banks’ profitability in Nakuru County, Kenya. The research’s objectives revolved around establishing the effects of borrowers credit history information sharing, collateral information sharing, customer identification information sharing and profitability of Commercial banks in Nakuru County. The research was supported by adverse selection, the theory of delegated monitoring and moral hazard theory. The study useda descriptive research design, while census approach was used in this study. The unit of observation was the 32 commercial banks in Nakuru County while the unit of analysiswas the 32 heads of credit departments among the banks. The study used both structured and unstructured questionnaires with closed and open-ended questions to gather relevant data. The study used both descriptive and multiple regression analysis. The research conclusion that credit information sharing positively and significantly affect profitability of commercial banks in Nakuru County. Also, borrower’s credit history information, credit information sharing cost, customer identification information and collateral information sharing had a significant extent influenced commercial banks’ profitability in Nakuru County. The credit information sharing enhanced banks’ ability to get data on loan security, guarantors and other forms of collateral to reduce credit default. It was concluded that CIS enabled banks to identify, regulate and avoid clients with poor credit history. The research recommendation is that banking institutions need to have their own client credit history records to supplement those by the CRBs. The banks need all to be enrolled with all the registered CRBs in Kenya to enable access sufficient client information before extending credit. The research further puts the recommendation that the banks need to invest and put more focus on customer database for easy identification of customers, their collateral and credit history.
Keywords: Borrowers’ Credit History Information, Credit Information Sharing Cost, Customer Identification Information and Collateral Information Sharing, Profitability, Commercial Banks.
Title: CREDIT INFORMATION SHARING AND PROFITABILITY OF COMMERCIAL BANKS IN NAKURU COUNTY, KENYA
Author: MIRIAM MUMBI NGIMA, JOSEPH THEURI
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Research Publish Journals
