The Influence of Co-Guarantee Factors on Loan Default in Micro Finance Institutions in Kenya: A Case Study of K-Rep Bank.

Simple item page
dc.contributor.authorJelagat, Kipkech Dorcas
dc.date.accessioned2024-11-07T12:43:40Z
dc.date.available2024-11-07T12:43:40Z
dc.date.issued2015-04
dc.descriptionMASTER OF BUSINESS ADMINISTRATION in Finance
dc.description.abstractThe main goal of every financial institution is to operate profitably. However, high levels of loan default have negatively affected the financial sector. For a long period, MFIs and SACCOs have employed different guarantee mechanisms from mainstream commercial institutions. With groups and individual members, both (MFIs and SACCOs) use the co-guarantee mechanisms as the only collateral to accessing financial services. However, a key concern that is emerging is the high default rate that is likely to affect accessibility, affordability and quality of financial services, and hence the need to understand the underlying factors for future programming of financial access services. The researcher did a correlation analysis of factor that enhances loan default, with loan default as dependent variable, and was categorized into four (4); normal default (30-60 days), watch status (60-90 days), substandard (90-120 days) and loss (+120 days). Loan amount, group duration, number of group members, incentive mechanisms, monitoring of projects and self-selection of members as independent variables. The findings indicated that loan amount and number of group members have a strong positive relationship with loan default (r >0.9). Self-selection had strong negative relationship with loan default (r > -0.9) while monitoring of projects and joint liability had a moderate negative relationship with loan default (r>0.7). All these relationships were significant at 1 percent level of significance (p<0.01). The study recommends that finance institution should capacity build groups on monitoring of projects for a good understanding of the investment rate of return; groups that have been together for long are less likely to default and financial institution should further implement other incentive mechanisms, in addition to non-refinancing to defaulters.
dc.description.sponsorshipDaystar University, School of Business and Economics
dc.identifier.citationJelagat, K. D. (2015). The Influence of Co-Guarantee Factors on Loan Default in Micro Finance Institutions in Kenya: A Case Study of K-Rep Bank. Daystar University, School of Business and Economics
dc.identifier.urihttps://repository.daystar.ac.ke/handle/123456789/5615
dc.language.isoen
dc.publisherDaystar University, School of Business and Economics
dc.subjectfinancial institution
dc.subjectprofit
dc.subjectfuture programming
dc.subjectMFIs and SACCOs
dc.titleThe Influence of Co-Guarantee Factors on Loan Default in Micro Finance Institutions in Kenya: A Case Study of K-Rep Bank.
dc.typeThesis

Files

Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
The Influence of Co-Guarantee Factors on Loan Default in Micro Finance Institutions in Kenya A Case Study of K-Rep Bank .pdf
Size:
1.38 MB
Format:
Adobe Portable Document Format
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Item-specific license agreed upon to submission
Description:
Download

Collections

School of Business and Economics