Abstract: The study sought to determine the effect of bank characteristics on the credit risk of Kenyan microfinance banking institutions was done. The research was anchored by agency theory and adverse selection theory. The adoption of a causal research design was eminent to analyze thirteen banks for the period 2015 to 2021 based on the census approach. The study outcomes were arrived at using secondary data obtained under the guidance of the secondary data collection schedule. The output of the analyzed investigation demonstrated that capital levels had an inversely significant effect on credit risk; liquidity also significantly inversely affected credit risk with bank size positively affecting the credit risk of microfinance banks significantly. The recommendation amongst which included that the microfinance banks’ management in Kenya should strengthen banks’ liquidity measures to allow for loans that are non-performing hence, lowering the risk associated with such intermediation function of the Kenyan microfinance banks.
Keywords: Capital Level, Liquidity, Bak Size and Credit Risk.
Title: MICROFINANCE BANKS CHARACTERISTICS AND CREDIT RISK OF MICROFINANCE BANKS IN KENYA
Author: Jonathan Sila Nyamai, Moses Odhiambo Aluoch
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Vol. 11, Issue 2, October 2023 - March 2024
Page No: 42-51
Research Publish Journals
Website: www.researchpublish.com
Published Date: 31-October-2023
