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Kevin Mburu Kuria

Jomo Kenyatta University of Agriculture and Technology (JKUAT)


Dr. Frida Simba

Jomo Kenyatta University of Agriculture and Technology (JKUAT)


Dr. Ahmed Anwar

Jomo Kenyatta University of Agriculture and Technology (JKUAT)



CITATION: Kuria, K., M. Simba, F. Anwar, A. (2018). Effect Of Credit Risk Management Strategy On Growth Of Real Estate Sector In Kenya. International Journal of Strategic Management. Vol. 7 (8) pp 31 – 41.




Given the ever dynamic and challenging business environment, real estate sector is bound to be exposed to various risks. The problem is that real estate companies that don’t adapt and/or institutionalize enterprise risk management strategies are likely to witness poor growth patterns compared with those that adapt ERM. The poor growth or failure of the real estate sector may lead to serious negative consequences as far as the achievement of Vision 2030 is concerned owing to the important role real estate companies are expected to play in providing affordable housing for citizens. The purpose of this study was to establish the effect of credit risk management strategy on the growth of real estate sector in Kenya. This research used a quantitative cross sectional survey research design as the design provided accurate means of assessing information that captures respondents’ similarities and differences. The study sample comprised of all real estate firms registered by Kenya Property Developers Association (KPDA) which are 69 in number, thus a census. Primary data was gathered by use of structured questionnaires and captured through a 5-point type likert scale questionnaire. Descriptive statistics including the mean and standard deviation was used to capture the characteristics of the variables under study. Inferential statistics included use of corelation and regression analysis. Multiple regression analysis was used to establish the nature and magnitude of the relationships between the variables and to test the hypothesized relationships. All the analysis was done using SPSS statistical package. The results of data analysis were presented using figures and tables for easy understanding and interpretation. The study findings indicated that that the real estate firms were concerned with the growth of their companies and thus to enhance this growth they had adopted risk management strategies to mitigate any risks that may arise during their operations. This therefore implies that those firms that had adopted use of risk management strategies had outstanding growth as compared to those that had not adopted risk management strategies. The study concludes that credit risk management was statistically significant in explaining growth of real estate sector. The study recommends that the management should also employ robust risk management practices to curb and detect fraud which may affect their growth negatively. The study further recommends that the firms should therefore adopt credit policies that would help improve prudential oversight of asset quality and to establish a set of minimum standards that should be applied before credit is advanced to customers.

Key Words: Credit Risk Management, Growth, Real Estate,


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