The relationship between credit default risk and borrower characteristics among commercial banks in Kenya

Abstract

This study sought to determine the relationship between Credit Default Risk and borrower characteristics among commercial bank in Kenya. The research methodology was a descriptive survey design and population of study was all the commercial Banks in Kenya. Data collected was edited for accuracy, uniformity, consistency and completeness and arranged to enable coding and tabulation for final analysis. The study also used multiple linear regression to analyze the data. The study found out that a number of borrower characteristics affect Credit Default Risk among them level of income, age, life style and borrowers' level of self control. The study recommends that Commercial Banks should put more emphasis on implementing credit risk management techniques and further research to be done on whether loans which are secured by collateralized assets are less risky compared to noncollateralized loans.