THE EFFECT OF DELINQUENCY ON PERFORMANCE OF PAYGO SOLAR HOME SYSTEM COMPANIES IN KENYA

Abstract

This study aimed at determining the effect of delinquency on the performance of Pay as You Go
(PAYGO) solar home systems in Kenya. Descriptive survey research design was adopted with
the target population being six leading PAYGO solar companies in Kenya. The study sampled
150 employees drawn from the companies using stratified and simple random sampling methods.
Questionnaires and interview guides were used to collect data. Descriptive statistics including
standard deviation, means, mode and frequency were used to analyze quantitative data.
Regression analysis was done to determine the relationship between the independent and the
dependent variables. Qualitative data was analyzed thematically using code themes. The
customer credit assessment was described as effective and the organizations employed strategies
as constant education on repayment, hiring of representatives to monitor the customer progress
and organizing customers into groups for ease of management and follow-ups. The
organizations also employed actions such as repossessing products and persuasion to urge
customers to repay. The study established that the repayment delinquency had a negative effect
on the performance of the PAYGO companies as it resulted in firms not meeting their
operational costs, experiencing declining profitability, and customer bases and inability to
expand their operations.. The study recommended that the management of PAYGO companies
should; intensify education to its customers on the importance of timely repayment of the
installments, should enforce the customer credit assessment to enhance its effectiveness and thus
minimize the risk of default and should motivate customers to repay their installments faithfully,
by rewarding the customers who have repaid faithfully.
Key words : Delinquency, performance, PAYGO , Solar companies .