Abstract:
Microfinance institutions in Ethiopia are playing an important role in poverty reduction
strategies. These institutions have amiss ion of creating and facilitating credit and other
financial schemes to enhance self-employment opportunities and poverty reduction. This study
was conducted with the objective of analyzing and identifying the factors that affect the loan
repayment performance of the client of busa Gonofa Micro finance of Holeta Branch. In order to
achieve this objective which the selection of the respondents were carried out by using sampling
techniques and select 171 respondents primary data were collected from 171 selected clients by
using structure questioners.
More over secondary data were obtain from record of Busa Gonofa Micro Finance institution
for the data analysis descriptive statics and results Binary Logistic Regression including mean,
frequency and percentages were used to describe the socioeconomic characteristics of the
borrowers. The result shows1.547 that Fourteen variables including constant; Age, sex,
education, family size, Lives stock holding, celebration of social ceremonies, Loan size, Loan
diversion, loan repayment schedule ,Training on loan use, shocks ,loan supervision and
monitoring, multiple loan , experience in loan use, income from other sours monitoring
utilizations of others members in a group ,credit time lines, repayment time suitability,
repayment trend on monthly basis and training adequacy are found significant and positively
influence loan repayment performance of borrower thus, it is recommended that the lending
institution needs to focus on monitoring loan utilization systems of borrowers and technical
support needs of the target borrowers through delivering better awareness creation to organize
the more viable borrowers , close supervision and following ups and strengthening their internal
and external weakness though better integration with key partner stakeholders
