Abstract: Commercial banks all over the world enhance the economic growth of nations by providing funds to customers of investments. The survival of commercial banks like every other financial institution depends largely on their profitability. However, the profitability of these banks is dependent on the risk management practices which they adopt. This is because granting of loans to borrowers is accompanied with its own risks. Studies relating to credit risk management practices were done in developed and other developing countries other than Kenya. Similarly, some of these studies focused on microfinance banks and Sacco societies. The current study seeks to fill the research gap by focusing on credit risk management practices and commercial banks financial performance in Kenya. Therefore, the specific objectives of the study are to determine the effect of client appraisal, credit terms and conditions, credit collection policies and credit control practices commercial banks’ financial performance in Kenya. The research utilized descriptive research design and the sampling design was purposive sampling design. The research made use of a multiple regression model for the analysis. Findings of the study indicate that there exist a positive and significant effect of credit risk management practices that is, credit terms and conditions, client appraisal, credit practices and credit control practices on financial performance of commercial banks in Kenya. The study recommends that credit managers should come up with efficient terms and conditions and client appraisal that will enhance credit control and collection.
Title: CREDIT RISK MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF SELECTED COMMERCIAL BANKS IN KENYA
Author: John Gaturo Chege, Dominic Ngaba
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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