Tacit knowledge, information accumulation, networking, and relationship lending: the case of commercial banks in Kampala, Uganda.

Abstract

The purpose of the study was to establish the relationship between tacit knowledge, information accumulation, networking, interaction quality, information disclosure and relationship lending.

A survey was made on 14 commercial banks in Kampala that lend out money to the different clientele categories and clients who had regularly interacted with the credit officers for a while were randomly selected to fill the questionnaires. The data were collected from the bank respondents by use of questionnaires. Data was analyzed using the SPSS package (SPSS 11.0) Correlation tests were run to determine the degree of the relationship between the study variables. The results of the study showed a significant positive relationship between networking, tacit knowledge, information accumulation, information disclosure and relationship lending. The regression model revealed that Interaction quality and Information disclosure were significant predictors of relationship lending accounting for 60.8% of the variance in relationship lending.

The researcher recommends that bankers could increase accessibility of credit to their clients by building a strong lending relationship minimizing on the information gaps that is characteristic of client/bank relationships to back up their collateral and the banks on the other hand should sensitize the clients regularly on the various products offered and hidden fees that is usually questionable to the clients.