| dc.description.abstract | The main purpose of the study was to analyze the impact of risk management on the performance
of microfinance institutions using a case study; pearl microfinance. The study was guided by the
following objectives: To identify the effect of credit risk in the performance of microfinance
institutions, to investigate the impact of liquidity risk in the performance of microfinance
institutions and to establish the effect of operational risk in the performance of microfinance
institutions. The study was carried on using a detailed literature review thereby analyzing what
various authors have written about the topic. This was done by looking into different books.
Data was collected using various tools like a self administered questionnaire, interviews to
mention but a few. The study was conducted using 50 respondents among the staff, and
employees in Pearl Microfinance. The results from the findings indicated that majority of the
respondents were females in the institution and were in the age group between 31–50 who were
married. The results indicated that, the institution faces problem of lack skilled human power that
facilitate the day-to-day activities of the institution and that the performance of the institution is
weak in efficient and effective internal credit quality review, liquidity risk makes the institution
unable to meet commitments and repayments at the correct time and place and that operation
risks affect microfinance institutions earnings due to failures in computer systems, errors, among
others. Finally, a number of recommendations were suggested such as institutions should
develop an independent department that is in charge for risk management, and that financial
institutions should adopt more Advanced technology so as to regulated the risks to enable they
say regulate the inconsistencies between the loan management system data and the accounting
system data. | en_US |
