Credit Management Strategies And Customer Retention In Microfinance Institutions A Case Study Of Kenya Women Finance Trust (Kwft) Kenya

TABLE OF CONTENTS

DECLARATION ........................................................................................................................ i

APPROVAL .............................................................................................................................. ii

TABLE OF CONTENTS ......................................................................................................... iii

CHAPTER ONE ........................................................................................................................ I

1.0 INTRODUCTION .............................................................................................................. I

i.I BACKGROUND INFORMATION .................................................................................... I

1.2 STATEMENT OF THE PROBLEM ................................................................................... 4

1.3 OBJECTIVES ...................................................................................................................... 5

1.3. l Main Objectives ................................................................................................................ 5

1.3.2 Specific Objectives ........................................................................................................... 5

1.4 RESEARCH QUESTIONS ................................................................................................. 6

1.5 SIGNIFICANCE OF THE STUDY .................................................................................... 6

1.6 CONCEPTUAL FRAMEWORK ........................................................................................ 7

CHAPTER TWO ....................................................................................................................... 9

LITERATURE REVIEW .......................................................................................................... 9

2.0 INTRODUCTION ................................................................................................ , .............. 9

2.1 CREDIT MANAGEMENT CONTROL ............................................................................ 9

2.2 PRINCIPLES OF FINANCIALLY VIABLE LENDING TO MFI'S CLIENTS ....... , ....... 9

2.3 METHODS OF CREDIT DELIVERY ............................................................................. 10

2.3. I Individual Loans ............................................................................................................. 10

2.3.2 Group Based Lending ..................................................................................................... 11

2.3.2.1 Characteristics of Group Lending ................................................................................ 11

2.4 FACTORS CONSIDERED WHEN ALLOWING CREDIT ............................................ 12

2.5 CREDIT ANALYSIS ........................................................................................................ 13

2.6 CREDIT MANAGEMENT POLICY ................................................................. , ........... ,. 13

~7 · 6 .1 Lem·e nt c1·e d.1 t po 1i· cy ....· ·, . .................................................................................................· 14

2.6.2 Stringeat credit policy: ............................................................................................ .; ....•. 14

2.6.3 Optimum credit policy ................................................................................................. :. 14

2.7 DESIGNING LENDING PRODUCTS ............................................................................. 15

2.7.1 Cash Patterns and Loan Amounts ................................................................................... 15

2.7.2 lmpo1iance of adequate cash flow and capacity to service debt ..................................... 16

2. 7.3 Effects of Loan Term on Debtors Ability to Repay ....................................................... 16

2. 7.4 Loan Prepayment ............................................................................................................ 17

2.7.5 Frequent of Loan Payments ............................................................................................ 18

2.7.6 Working Capital and Fixed Asset Loans ........................................................................ 19

2.7.7 Loan Collateral ............................................................................................................... 19

2.7.7.1 Collateral Substitutes ................................................................................................... 19

2.7.7.2 Alternative Forms of Collateral ................................................................................... 21

2.8 EFFECTS OF DELINQUENT LOANS ON PERFORMANCE OF MFIS ...................... 22

2.8.1 CONTROLLING DELINQUENCY .............................................................................. 24

2.9 ROLE OF MIS IN CREDIT MANAGEMENT ................................................................ 25

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APA

NJERI, K (2021). Credit Management Strategies And Customer Retention In Microfinance Institutions A Case Study Of Kenya Women Finance Trust (Kwft) Kenya. Afribary. Retrieved from https://afribary.com/works/credit-management-strategies-and-customer-retention-in-microfinance-institutions-a-case-study-of-kenya-women-finance-trust-kwft-kenya

MLA 8th

NJERI, KAMAU "Credit Management Strategies And Customer Retention In Microfinance Institutions A Case Study Of Kenya Women Finance Trust (Kwft) Kenya" Afribary. Afribary, 04 Jun. 2021, https://afribary.com/works/credit-management-strategies-and-customer-retention-in-microfinance-institutions-a-case-study-of-kenya-women-finance-trust-kwft-kenya. Accessed 22 May. 2024.

MLA7

NJERI, KAMAU . "Credit Management Strategies And Customer Retention In Microfinance Institutions A Case Study Of Kenya Women Finance Trust (Kwft) Kenya". Afribary, Afribary, 04 Jun. 2021. Web. 22 May. 2024. < https://afribary.com/works/credit-management-strategies-and-customer-retention-in-microfinance-institutions-a-case-study-of-kenya-women-finance-trust-kwft-kenya >.

Chicago

NJERI, KAMAU . "Credit Management Strategies And Customer Retention In Microfinance Institutions A Case Study Of Kenya Women Finance Trust (Kwft) Kenya" Afribary (2021). Accessed May 22, 2024. https://afribary.com/works/credit-management-strategies-and-customer-retention-in-microfinance-institutions-a-case-study-of-kenya-women-finance-trust-kwft-kenya