Abstract: The purpose of this research is to determine the influence credit management practices on the financial performance of SACCOs in Kakamega County. The objective that guided the study was to determine the impact of credit appraisal on the financial performance of SACCOs in Kakamega County. The study employed descriptive research design. Purposive sampling technique was used to select 99 SACCOs from a target of 132 SACCOs in Kakamega County. The sampling frame consisted of credit managers and credit officers of the sampled SACCOs. Structured questionnaires were used for data collection. Validity of the instrument was achieved using content validity while reliability through Cronbach alpha with a value of 0.900. Data was analyzed with the aid of statistical package for social sciences (SPSS) and presented in form of tables and models. The findings indicate that credit appraisal has significant relationship with financial performance (R=0.702, P=0.000). Regression results revealed that up to 49.3% of the variance in financial performance of SACCOs in Kakamega County is significantly accounted for by credit appraisal (R2=0.493, P=0.000). Some SACCOs do not have credit evaluation committee and this affected their loan portfolio quality. The study concluded that credit appraisal practices has significant positive outcome on the financial performance of SACCOs in Kakamega County. The study recommended that that SACCOs management should constitute credit evaluation committee which is composed of competent personnel to carry out credit appraisal. Management should put into consideration the process and procedures in regard to credit appraisal.
Keywords: Credit Appraisal, Credit Management Practices, Financial Performance, SACCOs.
Title: Influence of Credit Management Practices on Financial Performance of Savings and Credit Co-operative Societies in Kakamega County
Author: Lavinah Vugudza Chikamai, Dr. Mbithi Mutua
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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