The effects of credit policy on the performance of commercial banks: a case study of chase bank (cbk), nakuru branch kenya.

ABSTRACT

This research aimed at the effects of credit policy on the performance of commercial Banks in Kenya. [ts was guided by the following objectives; to establish the relationship between credit policy and performance in commercial banks; to examine the roles of credit policy towards performance of Chase Bank; to determine how Chase Bank has reviewed their credit policy in regard to performance md to analyse the impacts of credit policies on the performance of Chase Bank. Having employed both qualitative and quantitative methods of data collection, where 100 respondents from Nakuru County participated, it was found out that the good performance of Chase bank was nainly contributed by the credit control measures as a result of well established credit policy ;creening mechanism in place before credit is extended to clients. It's evident from this study that ndigenous commercial banks in Kenya use all the elements of credit policy management process, but rre not comprehensively using the aspects of the various elements of the process in the management )f their credit function. rhere is a significant and positive relationship between the elements of credit policy management and he perfonnance of Chase bank thus these findings reveal that the credit policy management in the ,ank has a strong impact of the quality of the bank's loan portfolio and thus the performance of the ,ank. n light of the conclusion drawn above and the findings obtained during the study, the researcher ecommended that Chase bank should work in conjunction with other banks to come up with a :entralized customer data for easy access on details concerning a customer's credit worthiness, •inancial institutions should always have qualified and experienced credit team who can tell a uitable candidate before any loan is given. Also financial institutions should always keep records on ;)an maturity and terms and conditions given to a client before loan is disbursed should be followed 1y financial institution to avoid defaulters.