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The study looked into how staff competencies affect loan recovery at deposit-taking microfinance firms in Nakuru County, Kenya. Microfinance institutions have evolved into self-sustaining financial organizations that provide credit for a fee and profit. Despite efforts to prevent loan defaults, MFIs are experiencing an increase in loan defaults. The study employed two theories: knowledge asymmetry and delegated borrower monitoring. The findings revealed that staff competencies had a substantial impact on credit recovery among MFIs. MFI management should guarantee that the crediting team has enough capacity to detect and prevent bad debt and that adverse debt reports are addressed promptly. Management and staff should inform clients about the repercussions of loan default, as bad debts lead to institutional failure. JEL: G21, O16, D82, G32, M12 Article visualizations:
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Nyutu et al. (2024) studied this question.
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