Factors Contributing To Loan Defaulting Among Savings And Credit Societies In Kirinyaga County,Kenya.

ABSTRACT

The overall objective of the research was to assess the factors leading to loan defaulting among Sacco’s in Kirinyaga County. Loan appraisal system, the effect of management to loan defaulting, loan policy and loan use were independent variables, while loan default was the dependent variable. The specific objectives of this study was to establish the effect of loan appraisal system to loan defaulting by SACCO client, to establish the effect of management of the SACCO in relation to loan defaulting, to establish the effect of loan policy in relation to loan defaulting and to establish whether poor loan use contributed to loan defaulting. A descriptive research design was employed in the study. Random sample were drawn from all credit manager and client in Sacco’s from Kirinyaga County strata which formed the sampling frame. A proportional approach to sampling was utilized within the strata. A total of 30 credit managers and 383 SACCO clients were picked through simple random technique for each stratum using a table of random numbers. Qualitative data was collected from the respondents. Data analysis was done through descriptive research design. Statistical Package for Social Scientists (SPSS) version 19 was utilized to do the regression and correlation analysis with a 0.05 level of significance.