DOI: 10.36347/sjebm.2019.v06i01.002

Pages: 7-13

Credit is the probability of loss because of a borrower’s inability or failure to pay back on his debt whereas credit risk management is the process of understanding how adequate a bank’s loan loss reserves and capital are at any given time in order to mitigate these losses. Women Enterprise Fund is a semi-independent agency of the government established to advance low cost credit to Kenyan Women. Women Enterprise Fund as any other credit business is exposed to credit risks. Credit advanced to women by WEF come along with credit risk challenges. How the fund has handled these risks challenges among women is not adequately researched compared to other enterprises or corporations. To the researcher knowledge, there is little documented study done on effect of credit risk management on loan performance of government revolving fund in Kenya, much of the work done relating to credit risk management practices on financial performance of commercial banks and microfinance institutions creating a research gap. The main objective of this study is to analyze effect of credit risk management practices on loan performance of Women Enterprise Fund in Kenya. More specifically, the study is to analyze loan appraisal procedure, loan recovery procedure, savings rate and interest rate on loan performance of Women Enterprise Fund in Kenya. The study will adopt the following theories for the analysis of the objectives; financial economic theory, credit risk theory, adverse selection theory of credit, credit default theory and capital asset pricing theory. The study will adopt a quantitative longitudinal research design taking Women Enterprise Fund as the target population. The study will collect primary data 99 women groups. Regression analysis will be used to analyze the relationship between independent and dependent variables. The findings from the study will inform the policies of the Women Enterprise Fund as government revolving funds on effect of credit risk management practices on