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Doreen Gatakaa Njeru

Kenyatta University



Jeremiah Koori

Kenyatta University




CITATION: Njeru, D. G., & Koori, J. 2019. Credit Reference Bureaus Functions And Loan Performance Of Commercial Banks In Kenya. International Journal of Finance and Accounting. Vol. 10 (9) pp 1 – 13.


Commercial banks carry out the function of matching surplus and deficits through the acceptance of deposits from depositors and in turn lending to borrowers which is prone to credit risk as borrowers are characterized by different behaviors. Credit information sharing is regarded as a mechanism that allows and facilitates the providers of credit to share the borrowing details of their debtors with the licensed Credit Reference Bureaus (CRBs). The uncertainty of lenders to pay back loans granted to them and in due time remains key in lending activities by commercial banks. The loan performance of commercial banks in Kenya has over the years been poor. The general objective of the study was to investigate the effect of credit reference bureaus functions on non performing loans of commercial banks in Kenya. The study sought to specifically examine the effect of credit information sharing function and risk assessment function on loan performance of commercial banks in Kenya. The study was anchored on moral hazard theory. The study employed causal research design. The study population comprised of 40 commercial banks operating in Kenya. The study adopted a census sampling design as it focuses on 40 commercial banks in Kenya. The study utilized both primary data sourced using a questionnaire and secondary data collected using a secondary data review guide. Descriptive and Multivariate regression analysis were employed. The results indicated a positive and significant relationship between credit information sharing (0.247 (0.005)), risk assessment function (0.326 (0.000)) with loan performance of commercial banks in Kenya. The regression analysis revealed that all credit reference bureaus functions variables had positively impacted on loan performance of commercial banks in Kenya. To this effect, it was recommended that credit information sharing functions be enhanced to ensure a centralized data of banks customers in order to reduce credit information asymmetry.


Key Words: Credit Reference Bureaus, Credit Information Sharing, Risk Assessment and Loan Performance



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