Factors influencing the uptake of banks personal loans among the University of Nairobi main campus employees, Kenya

Abstract

This study aimed at assessing the primary factors influencing the University of Nairobi main campus employees' decisions to. take up a Banks' personal loan. In the recent past, especially after 2005, the appetite for the Banks personal loan has been growing steadily among the employees, a phenomenon identified both with the management, teaching and the support staff.

This study identified the main campus as its focal point, which comprises the Central Administration, the College of Architecture and Engineering (CAE) and College of Humanities and Social sciences (CHSS). The study used data from 82 employees who have taken personal loans from the Banks. Descriptive statistics and correlation analysis has been used to highlight the relationships the relationships between variables.

The study has shown that majority of the University employees do not consider being in debt as a big deal. Majority of the employees in the university rely on their workmates to provide financial information, and in most cases this information has a potential to mislead the subject and make uninformed choices. The research has shown that this phenomenon is responsible for frustrations among the employees who find that the loan balances they are holding is not commensurate to the amount of wealth accrued from the loan.

Additionally the research established the need for Banks to come up with workable strategies on reaching the end user with their products in order to maximize the returns. All in all financial training was found to be wanting and there is need for the relevant stake holders to devise input strategies in order to raise awareness levels as far as financial literacy is concerned.