The Effect of Unsecured Personal Loans on Household Welfare of Secondary School Teachers in Bungoma County, Kenya

Abstract

This research is a survey carried out in the nine districts in Bungoma County, Kenya. The main objective of this study is to establish the effect on unsecured personal loans on household welfare of Secondary school teachers in Bungoma County. Judgemental sampling was used to identify respondents who had accesses to unsecured personal loans in Bungoma County. Data was collected using questionnaires from 122 respondents across Bungoma County out of a total sample size of 180 teachers equally spread across the nine districts of Bungoma County. The study adopted frequencies, tables and percentages in data analysis and presentation. Regression analysis was adopted to establish the effect of unsecured personal loans on household welfare and the findings show that utilization of unsecured personal loans contributed to improved health care and better education, empowerment of female secondary school teachers, reduction of the poverty levels, creation of employment and earning of extra income, improved total household consumption, provision of startup capital for businesses, and enabled households to put up better houses. The study established that unsecured personal loans improved household welfare for Secondary school teachers in Bungoma County. The study recommended that the government comes up with monetary policies that will reduce the lending rate and enhance accessibility to unsecured personal loans to encourage development. This research also recommended that proper mechanisms be put in place to train and mentor teachers and encourage them to embrace borrowing as a means of raising capital for household development.