The research project sought to examine the effect of listing with Credit Reference Bureau service on non-performing loans of deposit taking microfinance institutions in Kenya. The specific objectives were to assess how loan recoveries as a result of listing with credit reference bureau affects non-performing loans by deposit taking microfinance institutions in Kenya and to assess how write offs as a result of listing with credit reference bureau affect non-performing loans by deposit taking microfinance in Kenya. Furthermore to examine how loan quality as a result of listing with credit reference bureau affect non-performing loan in deposit taking microfinance in Kenya and what effect does listing with credit reference bureau has on non-performing loans levels in Deposit Taking Microfinance in Kenya. This research study adopted a descriptive survey approach on effect of listing with Credit Reference Bureau Service on non-performing loans of deposit taking microfinance institutions in Kenya.
Further, this study targeted all registered deposit taking microfinance institutions by the Central Bank of Kenya (CBK). Target population was 12 registered Deposit taking microfinance institutions that have listed with Credit Reference Bureaus in Kenya. This study used primary data that was collected by use of a questionnaire. The data was analyzed by use of Descriptive and inferential statistics to measure interrelationships between the variables. Tables were used to display the information to improve presentation of the analyzed results for ease of interpretation. Regression analysis was used to test the relationship between dependent and independent variable.
In light of the research findings, the regression model could only explain 52% in variance of non-performing loans. The study results revealed that there was a statistically significant relationship between loan recoveries and non-performance of loans (p=0.000); there was a statistically significant relationship between write offs and non-performance of loans (p=0.000) and that there was a statistically significant relationship between quality loan portfolio and non-performance of loans (p=0.000). Hence, credit information sharing and level of nonperforming loans are indeed related meaning there is a direct relationship between the number of credit checks done by the CRBs and the level of NPLs.
Inhaltsverzeichnis (Table of Contents)
- CHAPTER ONE INTRODUCTION
- 1.1 Background of the Study
- 1.2 Statement of the Problem
- 1.3 Objective of the Study
- 1.4 Research Hypothesis
- 1.5 Justification of the Study
- 1.6 Significance of the study
- 1.7 Scope of the Study
- 1.8 Limitations of the Study
- CHAPTER TWO LITERATURE REVIEW
- 2.1 Introduction
- 2.2 Theoretical Framework
- 2.3 Empirical Review
- 2.7 Conceptual framework
- 2.8 Operationalization of variables
- CHAPTER THREE RESEARCH METHODOLOGY
- 3.1 Introduction
- 3.2 Research Design
- 3.3 Population of Study
- 3.4 Sampling and Sample Frame
- 3.5 Data Collection Method and Instrument
- 3.6 Validity and Reliability
- 3.7 Data Analysis and Presentation
- CHAPTER FOUR DATA ANALYSIS, PRESENTATION AND INTERPRETATION
- 4.1 Introduction
- 4.2 Response rate
- 4.3 Descriptive Statistics
- 4.4 Correlation Analysis
- 4.5 Regression Analysis
- 4.5 Hypotheses Testing
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This research project aims to investigate the effect of Credit Reference Bureau (CRB) services on non-performing loan portfolios within deposit-taking microfinance institutions in Kenya. The study seeks to understand the relationship between CRB services and key indicators of loan portfolio performance, such as loan recoveries, write-offs, and overall loan quality.
- Impact of CRB services on loan recovery rates.
- Correlation between CRB usage and the level of loan write-offs.
- Influence of CRB data on the overall quality of loan portfolios.
- Analysis of the effectiveness of CRB systems in mitigating credit risk.
- Examination of the relationship between CRB services and non-performing loans (NPLs).
Zusammenfassung der Kapitel (Chapter Summaries)
CHAPTER ONE INTRODUCTION: This chapter sets the stage for the research by providing background information on non-performing loans (NPLs) and credit reference bureaus (CRBs) in Kenya's microfinance sector. It clearly defines the problem – the high rate of NPLs in these institutions – and outlines the study's objectives, which include determining the impact of CRB services on various aspects of loan portfolio performance. The chapter also justifies the study's significance and scope, acknowledging potential limitations. The research hypothesis is presented, setting the framework for the subsequent analysis.
CHAPTER TWO LITERATURE REVIEW: This chapter explores existing theoretical and empirical literature relevant to the study's focus. It examines relevant theories such as information sharing, adverse selection, and credit risk theories, providing a conceptual framework for understanding the relationship between CRB services and NPLs. The chapter reviews prior studies on the impact of increased or decreased NPLs, loan write-offs, loan recoveries, and overall loan portfolio quality, contextualizing the current research within the existing body of knowledge. It lays a foundation for the research methodology by defining key variables and their operationalization.
CHAPTER THREE RESEARCH METHODOLOGY: This chapter details the research design employed in the study, outlining the population and sampling methods used to select the study participants. It describes the data collection instruments and methods, highlighting the steps taken to ensure data validity and reliability. The chapter explains the approach to data analysis, providing a methodological foundation for the interpretation of the results presented in subsequent chapters.
CHAPTER FOUR DATA ANALYSIS, PRESENTATION AND INTERPRETATION: This chapter presents the findings of the data analysis, organized around response rates, descriptive statistics (including loan recoveries, write-offs, and loan quality), correlation analysis, and regression analysis. It details the statistical tests performed to investigate the relationship between CRB services and the performance indicators of the loan portfolio. The hypothesis testing procedures and the summarized research findings are discussed, providing the basis for conclusions reached in the next chapter.
Schlüsselwörter (Keywords)
Credit Reference Bureaus, Non-Performing Loans, Microfinance Institutions, Loan Recovery, Loan Write-offs, Loan Portfolio Quality, Credit Risk, Kenya, Empirical Research, Regression Analysis.
Frequently Asked Questions: Comprehensive Language Preview of Research on Credit Reference Bureaus and Non-Performing Loans in Kenyan Microfinance
What is the main topic of this research preview?
This preview summarizes a research project investigating the impact of Credit Reference Bureau (CRB) services on non-performing loan (NPL) portfolios within deposit-taking microfinance institutions in Kenya. It explores the relationship between CRB services and key indicators of loan portfolio performance, such as loan recoveries, write-offs, and overall loan quality.
What are the key objectives of the research?
The research aims to determine the impact of CRB services on loan recovery rates, the correlation between CRB usage and loan write-offs, the influence of CRB data on overall loan portfolio quality, the effectiveness of CRB systems in mitigating credit risk, and the relationship between CRB services and NPLs.
What are the key chapters and their contents?
The research is structured into four chapters. Chapter One provides background information, defines the research problem, outlines objectives, and presents the hypothesis. Chapter Two reviews relevant literature, including theoretical frameworks and empirical studies. Chapter Three details the research methodology, including the research design, sampling methods, data collection, and analysis techniques. Chapter Four presents the data analysis, findings, and interpretation, including statistical tests and hypothesis testing.
What methodology is used in this research?
The research methodology section details the research design, population and sampling methods, data collection instruments, and data analysis techniques. It addresses data validity and reliability, providing a methodological foundation for interpreting the results.
What types of data analysis are used?
The data analysis includes descriptive statistics (e.g., loan recoveries, write-offs, and loan quality), correlation analysis, and regression analysis. Hypothesis testing is also conducted to examine the relationship between CRB services and loan portfolio performance indicators.
What are the key themes explored in this research?
Key themes include the impact of CRB services on loan recovery rates, the correlation between CRB usage and loan write-offs, the influence of CRB data on loan portfolio quality, and the effectiveness of CRB systems in mitigating credit risk within the Kenyan microfinance context.
What are the keywords associated with this research?
Keywords include Credit Reference Bureaus, Non-Performing Loans, Microfinance Institutions, Loan Recovery, Loan Write-offs, Loan Portfolio Quality, Credit Risk, Kenya, Empirical Research, and Regression Analysis.
What is the significance of this study?
The study aims to provide valuable insights into the role of CRBs in managing NPLs within the Kenyan microfinance sector. The findings could inform policies and strategies to improve loan portfolio performance and enhance the stability of microfinance institutions.
What are the limitations of this study?
Potential limitations of the study are acknowledged in the preview, although the specific limitations are not detailed.
- Quote paper
- Hilary Omare (Author), 2016, Effect of Credit Reference Bureau Services on Non-Performing Loan Portfolios in Kenya, Munich, GRIN Verlag, https://www.grin.com/document/500466
