Open AccessCredit Information Sharing and Credit Risk Reduction in Kenya Commercial Banks
Author(s) -
Tabitha Nasieku,
Rosemary Wanjiku Ngugi
Publication year - 2016
Publication title -
journal of social sciences research
Language(s) - English
Resource type - Journals
ISSN - 2321-1091
DOI - 10.24297/jssr.v10i1.4680
Subject(s) - credit history , loan , credit reference , business , credit risk , financial system , credit enhancement , credit card interest , information sharing , finance , credit crunch , political science , law
Financial Institutions are in the business of mobilizing and lending to borrowers and they assume various kinds of financial risks in the process of mobilizing and lending financial resources.This Theoretical study reviewed the literature to investigate the relationship between credit of information sharing and credit risk reduction in Kenya commercial banks. The literature found that the lending policy is periodically reviewed to reflect the prevailing conditions thus loan characteristics, considers an applicant's bank statements thus borrowers characteristics and the credit collection policy thus lenders characteristics before credit is advanced. The study recommends that banks should incorporate credit information sharing to reduce credit risk.