Effect Of Internal Credit Rating On Financial Performance Of Commercial Banks In Kenya

Internal credit rating (ICR) was used in evaluating the level of risk associated with a loan applicant and assign probabilities that an applicant with a given credit score would be good or bad. It could also be used as abasis for loan approval, pricing, monitoring and capital allocation. Lending difficulties may arise due to Internal Credit Rating (ICR) systems failure to consider and analyze potential borrower’s information before loans are approved and released to them, making loan monitoring and capital allocation based on the associated risk profile difficult. In recent years spanning 2011…