EFFECT OF INTEREST RATES REGULATIONS ON LOAN PROVISIONS: CASE STUDY OF SACCOS IN KENYA

The study sort to establish the relationship between interest rates and loan provision in SACCOs in Kenya. Descriptive survey research design and stratified random sampling method was used. The sample size used was 84 respondents comprising ofthree operation managers, four credit officers, three customer service officers and seventy-four registered saccos members. The study was guided by Classical interest, Keynesian Liquidity and Time preference theories. Results indicated that interest rates charged on loans had the least influence on loan provisions. The study recommends that the government through Central Bank and Kenya Bankers Association to advocate for more market-based regulations which would ensure affordable and accessible financing for the small businesses and startups that promotes enabling environments for entrepreneurial activities. The findings contributed to new knowledge to literature and theory.