INFLUENCE OF ELECTRONIC LOAN MANAGEMENT SYSTEM ON LOAN PERFORMANCE OF MICROFINANCE INSTITUTIONS IN KENYA
Abstract
Microfinance institutions (MFIs) are pivotal in delivering financial services to underserved populations, especially in developing countries. By offering small loans, savings, and other financial products to those lacking access to traditional banking, MFIs aim to foster financial inclusion and alleviate poverty. Recent technological advancements have significantly impacted MFIs, particularly through the adoption of electronic loan management systems (ELMS). These digital platforms streamline the entire loan lifecycle, enhancing efficiency and reducing operational costs. Despite these advancements, many MFIs continue to grapple with effective loan management, which is crucial for their profitability and sustainability. Inefficient loan management practices, such as inadequate credit selection and poor loan monitoring, have been identified as major contributors to high default rates and financial instability within these institutions. This study aims to assess the influence of ELMS on loan performance among Kenyan MFIs, focusing on various components such as loan origination, disbursement, monitoring, servicing, and repayment systems. Through a mixed research design, involving both qualitative and quantitative methods, the study will investigate how these electronic systems can enhance loan performance and mitigate risks. The findings are expected to provide valuable insights for improving loan management practices and supporting the financial sustainability of MFIs in Kenya.
Keywords: Electronic Loan Management System, Loan Performance, Microfinance Institutions, Electronic Loan Origination System, Electronic Loan Disbursement System, Electronic Loan Monitoring System, Electronic Loan Repayment System
CITATION: Chege C. W., & Njeru, A. (2025). Influence of electronic loan management system on loan performance of microfinance institutions in Kenya. The Strategic Journal of Business & Change Management, 12 (2), 437 – 464. http://dx.doi.org/10.61426/sjbcm.v12i2.3217
Full Text:
PDFReferences
Akram, W., & Hussain, M. (2020). Impact of exchange rate volatility on the profitability of the banking sector in Pakistan. Journal of Economics and Business Research, 6(1), 14-26. doi: 10.22610/jebr.v6i1.2872
Consiglio, A., and Zenios, S. (2017). Risk profiles for re-profiling the sovereign debt of crisis countries. The Journal of Risk Finance, 16(2), 2-26
Forbes (2019) The World's Largest Banks In 2019. Forbes
Horne, C. Van, (2007),” Understanding and Dealing with High Interest Rates on Microcredit,”” New Delhi.
Mugenda, O.M. and Mugenda, A.G. (2013).Research Methods: Quantitative a Qualitative Approaches. Nairobi: Acts Press.
Pandey, I. M. (2018),” Financial Management .” Vikas Publishing House (PVT) Ltd, New Delhi.
Ramlall, I. (2018). A framework for financial stability risk assessment in Banks. In The Banking Sector under Financial Stability (pp. 29-117). Emerald.
Gatuhu. M. (2016). The challenges facing small-scale women entrepreneurs: A case of Kenya. International Journal of Business Administration, 3(2), 112.
DOI: http://dx.doi.org/10.61426/sjbcm.v12i2.3217
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.