Credit Risk Management and Financial Performance of Micro - Finance Institutions in Kenya
DOI:
https://doi.org/10.47941/ijf.3183Keywords:
Credit Risk Management, Microfinance Institutions, Risk Assessment, Financial PerformanceAbstract
Purpose: The purpose of this study was to find out the effect of credit risk management factoring institutional size as a moderator on Financial Performance of Micro Finance Institutions in Kenya. Specifically, the study sought to find out: effect of Credit Appraisals, Credit Risk Control, Credit Terms, Credit Approvals and Institution’s Size on the financial performance of Micro Finance Institutions in Kenya.
Methodology: The study adopted a descriptive survey research design and used census technique. Data was collected using questionnaire for primary and record survey sheet for secondary. Data was analyzed using descriptive and inferential statistics.
Findings: The study findings established that Credit Appraisal, Credit Risk Control, Credit Terms, Credit Approvals and institution size have significant effect on performance of Micro Finance Institutions in Kenya. Effective credit risk management reduce bad debt, improve cash flow and profitability.
Unique Contribution to Theory Practice and Policy: The study recommends Micro Finance Institutions in Kenya to adopt risk management practices to improve on financial performance. The study recommends for further study including unregistered micro finance institutions across the country by employing comparable variables and different technique.
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Copyright (c) 2025 David Onyango Agong, John Murunga Kadima
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