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September 11, 2025East African Journal of Business and EconomicsOpen Access

Relationship Between the Credit Risk Assessment and The Financial Performance of Tier-Two and Tier-Three Commercial Banks in Kenya

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Authors

CJCheboss Venus JeptooPLPenina LangatRKRaymond KemboiUniversity of Kabianga

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Implication

Cross-sectional analysis reveals a positive yet insignificant link between credit risk assessment and financial performance in Kenyan banks, suggesting the need for improved risk management strategies.

Key Points

  • Credit risk assessment practices are present in tier-two and tier-three banks, but their impact on financial performance is insignificant.
  • The study found a correlation coefficient of r = 0.057, indicating a positive relationship that lacks statistical significance.
  • This research involved a cross-sectional design with 175 respondents from 30 banks, highlighting diverse insights from bank employees.
  • Results suggest that banks need to strengthen additional risk management strategies along with credit risk assessment for better financial outcomes.

Cite This Study

Jeptoo et al. (2025) studied this question.

synapsesocial.com/papers/68d41717713b0b5dfea62fcbhttps://doi.org/10.37284/eajbe.8.2.3612
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