THE DETERRENT EFFECT OF CREDIT REFERENCE BUREAU AS A COMPLIANCE MEASURE ON HIGHER EDUCATION LOAN RECOVERY IN KENYA

Abstract

This study set out to examine the deterrent effects of loan compliance measures on higher education loan recovery in Kenya through credit reference bureau (CRB). More specifically, the study sought to analyze the deterrent effects of credit reference bureau as a loan compliance measure on higher education loan recovery in Kenya. The study reviewed literature pertinent to the study problem covering the theoretical, empirical literature and conceptual framework. The study was premised on the deterrence theory. The study adopted both descriptive and longitudinal study designs. Primary data used structured questionnaires to collect data from exstudents who finished their undergraduate studies from both public and private universities in Kenya between 2009 to 2015. The secondary data was sourced through documentary analysis of annual HELB reports and the World Bank database portfolio for loans recovery rate statistics. Linear Multiple Regression and correlation analysis was used in the data analysis. Both descriptive and inferential analysis was conducted. Findings indicated that there exists a statistically significant association between CRB listing and loan recovery. The study concluded that CRB listing policy has been significantly effective in driving up compliance with HELB loan repayment and therefore has significantly contributed to HELB loan recovery in the country. The study therefore recommends that HELB should explore this preventive measure as it is the most effective loan default deterrent and very effective compliance measure on higher education loan recovery in Kenya.