Transaction cost determinants of credit governance structures of commercial banks in Tanzania

Nguvava, Heriel Emanuel (2015) Transaction cost determinants of credit governance structures of commercial banks in Tanzania. ["eprint_fieldopt_thesis_type_phd" not defined] thesis, The Open University Of Tanzania.

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Abstract

The general objective of this research was to assess transaction cost determinants of credit governance structure of commercial banks in Tanzania. Structured questionnaires for survey were administered and sufficient data was obtained for analysis. A quantitative descriptive design was adopted by the current study.Due to inability to determine sampling frame for this sample population, a non- probabilistic (purposive) sampling technique was followed.Descriptive statistics, linear regression model, binary logistic regression and multinomial logistic regression models were employed for analysis.Study findings revealed that, urban based credit customers can be easily identified, their information gathered and monitored, commercial banks preferred dealing with them directly because they involves low credit transaction costs. On top of that, current study revealed four different credit governance structures that may be used by commercial banks to penetrate rural based credit market without fear of high transaction costs. These modes of CGSs might be used to absorb transaction costs, allow commercial banks credit operations scale up to rural areas and easy accessibility of credit facility to majority of Tanzanians. Further the study revealed credit monitoring and enforcement costs to be the highest category of TCs under commercial banks credit operations in Tanzania. Time costs, transport costs, local authority fees, meeting facilitation costs,lawyer fee, business viability measuring, food and refreshments costs, contract breaching costs, case filing costs, third party hiring costs, tips and other charges were revealed as specific elements of transaction costs used as determinants of choice of an efficient credit governance structure of commercial banks in Tanzania.

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