Credit Risks Management Practices, And Performance of Real Estate Construction Housing Projects in Kenya; A Case of Real Estate Construction Housing Projects in Busia County

Purpose: The purpose of this study was to establish how credit risk management practices influence performance of Real Estate Construction Housing projects in Busia County. Methodology: The data for this study was collected using questionnaires, focus group discussions and interview schedules. Data was analyzed using descriptive and inferential statistics. Descriptive statistics involved quantitative data analysis therefore it used measures of central tendencies such as frequency, percentage, and mean standard deviation, composite mean and composite standard deviation, while inferential statistics involved testing of research hypotheses using spearman correlation and regression analysis. Findings: During data analysis the study found that credit risk influences performance of real estate construction housing projects in Busia County; implying that using the Likert scale, the respondents agreed that credit risk influences performance of real estate construction housing projects in Busia County. The overall correlation coefficient for credit Risk Management and Performance of real estate construction housing projects in Busia County was found to be 0.580 with a p-value of 0.000 < 0.05 implying that from the views of participants in the study the results indicated that there was a significant relationship between Credit Risk Management and Performance of real estate construction housing projects in Busia County; leading to rejection of the null hypothesis and acceptance of the alternative hypothesis. The simple linear regression coefficients as well as the Pearson correlation results indicated that there was significant influence of Credit risk management on Performance of real estate construction housing projects in Busia County. Unique Contribution to Theory, Policy and Practice: The study contributed the theory that revealed that past statistics show that higher interest rates on credit have not necessarily misguided real estate total return performance but property performance has often remained resilient in the face of rising rates. The study also informed the practice that real estate development is a capital intensive investment and thus developers have to explore alternative sources of capital which can be affordable to them. Finally, the study informed the policy makers that to deliver the high numbers of affordable housing units required, the process of land and real estate transactions needs to be much faster.