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International Journal of Economics and Finance Vol.4, Issue 2, 2015
THE STANDARD CREDIT REFERENCE BUREAU AND THE PERFORMANCE OF MULTINATIONAL BANKS OPERATING IN THE EAST AFRICAN COMMUNITYJoseph Macheru Ngunjiri
Jomo Kenyatta University of Agriculture and Technology
CITATION: Ngunjiri, M. J. (2015). The Standard Credit Reference Bureau and the Performance of Multinational Banks Operating In the East African Community. International Journal of Social Sciences and Entrepreneurship, 4 (1), 1-16.ABSTRACT The management of credit risks has become an important concern to policy makers, as they seek drive good performance of multinational banks. This research project examines the need for a standard Credit Reference Bureau to overcome the challenges of the EAC states integration and ensure a progressive performance of the multinational banks. This work aims to show that integration of the EAC has necessitated the need to re evaluate potential risks such as bad debts and high impairment levels, which continually threaten the performance of multinational banks, and propose necessary measures to overcome the identified challenges. This study used a descriptive survey. The population of this study consisted of 5 Multinational Banks in the EAC and used both primary and secondary data sources in gathering data for analysis. The primary data was collected using semi-structured questionnaires. Data presentation was done by use of bar charts and graphs, percentages and frequency tables. The inferential statistic regression and correlation was done to establish the extent to which CRB ratings affects the performance of multinational banks. The study concluded that the achievement of this goal calls for composition of a professional body, with an international network and reputable global affiliates to provide regional and international subscribers with both proactive and reactive solutions to credit risk management through a comprehensive range of services. The study concluded that prudential regulation and effective management of the standard credit reference bureau would lead to more robust credit policy enforcement, thus positively impact to the performance of multinational banks. Credit risk would be lower, recovery costs and impairment rates would significantly reduce.
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