International Journal of Innovative Social Sciences & Humanities Research 3(2):48-59, April-June 2015


© SEAHI PUBLICATIONS, 2015

FACTORS INFLUENCING LOAN UPTAKE RATE FROM COMMERCIAL BANKS BY CIVIL SERVANTS IN KENYA: A CASE OF MINISTRY OF EDUCATION HEADQUATERS



Ernest KANGOGO1 & Dr. Tobias OLWENY2
1MBA Scholar , Jomo Kenyatta University Of Agriculture And Technology, Kenya
2Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya

ABSTRACT
For many years commercial banks have not been involved in provision of credit to small scale borrowers or low income earners. The sector has remained the preserve of micro finance institutions (MFIs) and SACCOs which they have aimed at fostering savings mobilization and providing access to credit amongst individual members within a defined common bond. Initially commercial banks had not regarded offering loans to civil servants and employees of medium sized companies as a genuine option due to the risk and expenses involved. However with the liberalization of the financial sector, which has increased the level of competition in the formal banking market banks are looking for avenues to expand their revenue base. The major objective of this study is to determine the factors influencing loan uptake rate from commercial banks by civil servants in Kenya with a focus in the ministry of education headquarters. To achieve the desired objective of the study, a descriptive research design was used... The study targeted 195 respondents from the five major departments in the ministry of education headquarters. A thirty percent (30%) of each stratum was used and this gave a sample size of fifty nine (59) respondents. Questionnaires were used as the only key data collection tool. MS Excel was used to capture the data, while Statistical Package for Social Sciences (SPSS) which is a data analysis tool was used…A major finding in this study was that in today’s competitive environment, information is not an option but a life blood for any organization that aims to excel and be competitive. It is therefore recommended that both the borrowers and the lenders require adequate and valuable information for successful loan transactions and that Lending institutions should move with speed and embrace information asymmetry in all her transaction else, serious customers will lose confidence with the service.
Keywords: loans, Commercial banks, civil servants, cooperative organizations, collateral