Effects of macroeconomic shocks on banking sector loan quality in Kenya
Date
2020
Authors
Shammah, Wema Oduor
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
This a paper uses two approaches to analyse the link between loan quality and
macroeconomic performance. First evaluating the interaction between different
macroeconomic factors using panel regressions second applying a panel vector
autoregressive model in modelling the same macro-financial interactions. Using panel
datafrom banks 31 banks spanning between 2001 to 2018, results show that money
supply is the main macro-economic factor that influences loan quality in Kenya.
Impulse response fimctions are used to how that macro-economic shocks take time
reduce or increase loan quality in Kenya.
Description
Submitted in partial fulfilment of the requirements for the Degree of Bachelor of Business Science in Finance and Applied Economics at Strathmore University