CREDIT INFORMATION EXCHANGE AND CREDIT RISK MANAGEMENT AMONG SACCOs IN NAIROBI CITY COUNTY, KENYA
Abstract
Purpose of the Study: This study examined the effect of credit information exchange on credit risk management among deposit-taking SACCOs in Nairobi City County, Kenya, focusing on its influence on non-performing loans and overall financial stability.
Problem Statement: Despite the establishment of Credit Reference Bureaus (CRBs) to enhance credit information sharing, SACCOs continue to experience high levels of non-performing loans, indicating inefficiencies in the adoption and utilization of credit information exchange systems.
Methodology: The study adopted a positivist philosophy and cross-sectional design using panel data from 46 SACCOs over the period 2018–2023. Data analysis involved descriptive statistics, Pearson correlation, and regression modeling.
Result: Credit information exchange had a statistically significant negative effect on non-performing loans, indicating that improved information sharing reduces credit risk.
Conclusion: The study concludes that effective implementation of credit information exchange enhances credit risk management.
Policy Recommendation: SACCOs should strengthen integration with CRB systems to improve borrower assessment and reduce loan defaults.
Keywords: Credit Information Exchange, Credit Risk Management, SACCOs, Non-Performing Loans, Financial Stability
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