International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue VIII, August 2020 | ISSN 2454–6186

Factors Affecting Credit Management in Microfinance Institutions in Kenya: A Case of “J B” Bank

Dr. John Cheluget (MUA), Kaburu Purity Naitore (MUA)
The Management University of Africa, Kenya

Abstract: The core focus of this study was to investigate the factors affecting credit management in microfinance institutions in Kenya. This effect of poor credit and loan performance has led to collapse of financial institutions and poor individual credit rating in Kenya. The main objectives were to find out effects of technical competency, information technology, finance, credit terms and government policy on credit management in microfinance institutions in Kenya. The study covered a population of 125 personnel in “J B” Bank, Head Office and used stratified random sampling where 50% of the entire target group formed the sample size (62) of the study. Data was collected from both primary and secondary sources by means of feedback form and literature analysis correspondingly to get comprehensive facts. The findings were presented using graphs, pie charts, and table diagrams separately subject to the methods used. Based on the findings the study reveals that technical competency affects credit management at a very high rate. Most of the respondents cited that it is significant for the organization to have employees who are trained with IT basic knowledge and leadership skills. Majority of the respondents agreed that credit terms affect credit management in microfinance institutions in Kenya and they rated its effect in microfinance institutions in Kenya. It was found out that finance is very vital in providing smooth flow of services. Based on the findings the study also reveals that government policy affects credit management in microfinance institutions in Kenya at a very high rate. The researcher suggested that the organizations should be in a position to improve the competency of personnel. It was recommended that in the crucial work of private managers involving discretion and advice, as well as policymaking, that the ethical standards of credit management in microfinance institutions assume particular significance.

Keywords: Micro Finance Institutions, Credit Terms, Finance, Government Policy, Information Technology, Technical Competency

I. INTRODUCTION

According to Anderson (2015), Micro Finance Institutions are progressively a central source of credit for the poor in many countries. Microfinance Institutions are those institutions which provide micro-credit, savings, and other services to the productive poor, together in the urban and rural settings.