Client Appraisal and Loan Repayment Performance of Revolving Funds in Kenya

Abstract

This study sought to investigate the influence of client appraisal strategies on repayment performance of the revolving funds in Kenya. Specifically, the study evaluated the relationship between business assessment visits, financial skills training, types of training offered, duration of time before loan disbursement and repayment performance. The study adopted a descriptive correlational research design. A Stratified random sampling and purposive sampling techniques was used to obtain a sample of 181 youth and Woman Enterprise Fund officers in Kenya, while questionnaires were used to collect primary and secondary data. Multiple linear regression was used to test the research hypothesis and demonstrate the relationship between the variables. Results showed that the type of training had a positive and significant effect on loan repayment rate whereas business assessment visit, the number of trainings and the duration before loan disbursement had a positive but insignificant effect on loan repayment rates. This study contributes to the body of knowledge by establishing strategies that influence rate of repayment performance of revolving funds.