Factors Affecting Loan Repayment Performance Of Clients Of Busa Gonofa Micro Finance Of Holeta Branch

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