Kiema, Dennis Musili2021-11-232021-11-232017-06Kiema. D. M. (2017). Effect Of Non-Performing Loans On Financial Performance Of Commercial Banks In Kenya: A Case Of Selected Commercial Banks Listed In The Nairobi Securities Exchange. Daystar University School of Business and Economicshttps://repository.daystar.ac.ke/handle/123456789/3735Master Of Business Administration In Finance And Strategic ManagmentThe study examined the effect on Non-Performing Loans (NPLs) on the financial performance of selected commercial banks listed with the Nairobi Securities Exchange (NSE). The study’s objectives were: to identify causes of NPLs within NSE listed selected commercial banks in Kenya; to establish the level of NPLs among the NSE listed selected commercial banks; to identify measures of financial performance among the NSE listed selected commercial banks; and to determine the effect of NPLs on the NSE listed selected commercial banks’ financial performance. Descriptive research design guided the study. The study’s target population was the 11 NSE listed commercial banks out of which a sample size of four banks was drawn. Data was collected by use of questionnaire and through a review of the sampled annual financial statements for the period 2011 to 2015. The collected data was analyzed using Stata software and was presented in form of tables and figures. Some findings of the study were: that inflation, interest rates, weak credit appraisal, and insider lending were some of the probable causes of NPLs; that the levels of NPLs in Tier 1 banks were far much less than those in in Tier 2 banks. Among the study’s recommendations were: that internal factors that cause NPLs in commercial banks should be controlled; and that Tier 2 banks need to be strict with the loans they issue and should have more controls on their bad and doubtful loans. The study concluded that there is a direct relationship between NPLs and the financial performance of commercial banks listed in the NSE.enNon-Performing Loans On Financial PerformancePerformance Of Commercial BanksThe Nairobi Securities ExchangeThesis