Abstract:
Many financial institutions in the world that have experienced large losses over the past few years and this is despite most of them employing sophisticated risk management practices/systems. The practices can positively or negatively influence the performance of the SACCOs taking credit risk is part and parcel of financial intermediation. The objective of this study was to determine the effects of credit risk analysis on financial performance of SACCOs located in Nairobi region. This study used descriptive research design and with a target population of 850 respondents all Drawn from the 34 existing and registered SACCOs within Nairobi region. Stratified random Sampling was used to calculate a sample size of 85 respondents. The study findings established that credit risk analysis affects the financial performance of Sacco’s to a great extent. Further, the Study established that most of the Sacco’s were using financial risk analysis and loan default risk analysis.
