Commercial Banking Crises in Kenya: Causes and Remedies

African Journal of Accounting, Economics, Finance and Banking Research, Vol. 4, No. 4, July 2009

22 Pages Posted: 14 Jan 2010

See all articles by Nelson Waweru

Nelson Waweru

York University - School of Administrative Studies

Victor Mutisya Kalani

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: July 16, 2009

Abstract

Many Financial institutions that collapsed in Kenya since 1986 failed due to non performing loans. This study investigated the causes of non performing loans, the actions that bank mangers have taken to mitigate that problem and the level of success of such actions. Using a sample of 30 managers selected from the ten largest banks the study found that national economic downturn was perceived as the most important external factor. Customer failure to disclose vital information during the loan application process was considered to be the main customer specific factor. The study further found that Lack of an aggressive debt collection policy was perceived as the main bank specific factor, contributing to the non performing debt problem in Kenya.

Keywords: Banks, Financial institutions, non performing loans, Kenya

JEL Classification: G21, G20, N27

Suggested Citation

Waweru, Nelson Maina and Kalani, Victor Mutisya, Commercial Banking Crises in Kenya: Causes and Remedies (July 16, 2009). African Journal of Accounting, Economics, Finance and Banking Research, Vol. 4, No. 4, July 2009 , Available at SSRN: https://ssrn.com/abstract=1534205

Nelson Maina Waweru (Contact Author)

York University - School of Administrative Studies ( email )

4700 Keele St.
Toronto, Ontario M3J1P3
Canada
+14167362100 (Phone)
+14167365963 (Fax)

Victor Mutisya Kalani

affiliation not provided to SSRN ( email )

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