Abstract:
The study was meant to examine the factors affecting borrowing amongst the employees of
public universities in Kenya. The locality of the study was Egerton University. The objectives
of the study were to identify the factors that influence bank borrowing and determine the
relationship between these factors and borrowing among the employees of Egerton
University. The population of the study was 1889 employees of Egerton University. A sample
of 318 employees was selected through systematic stratified random sampling. Questionnaire
was the main tool of data collection. The results of the study were presented through
descriptive statistics such as tables, pie charts, bar graphs, and histograms. Regression
analysis was used to determine the extent of relationship between dependent and independent
variables in the study. From the study, it was established that long repayment period is the
most important factor that influences the borrowing levels from commercial banks followed
by lack of guarantee. Interest rates were reported to have a moderate influence while gross
salary incomes lowly influence the employee borrowing from commercial banks. The study
observed that there exist a relationship between the current level of borrowing and the
factors that influence employee borrowing. The level of education influences the borrowing
levels from commercial bank. High interest rates significantly reduce the borrowing from commercial banks while high gross salary income and need for business start-up finance
increases the borrowing from commercial banks.
