Abstract:
Rural Saving & Credit Cooperatives play great roles to providing financial services to rural peoples which were banks not reach. Developing different saving culture and then providing loan services to borrowers at reasonable interest rates was the main purpose of cooperatives. Replacing loan disbursed from borrowers were a challenges for SACCOs in the rural area. Loan repayment rates in all selected SACCOs were very low in the study area due to socio economic, demographic and institutional factors. The main objective of this study was to analysis loan repayments performance among SACCO members in the study area. From a methodological point of view, the study used stratified random and purposive sampling techniques, while relying on a sample of 149 respondents from five selected SACCOs operating in Ejere District. Of these 124 respondents, who were SACCO members through questionnaire, while the remaining seventeen (17), who comprised of 15 SACCOs committee & 2 experts, were interviewed using key informant interviews. The descriptive analysis using frequency tables and percent, and inferential analysis of tests of associations using chi-square test were carried out for the response and some of the explanatory variables and their respective results are presented using tables and charts. Analysis of data revealed that there is a problem in loan repayment performance to SACCO’s members. Using the logit model, the results of the factors influencing loan repayment performance among SACCO members indicated that; out of 13 explanatory variables which were considered in the econometric model 5 variables were found to significantly associate with loan repayment performance. Marital status; income level, family size, educational level, and business experience have statistically significance association with loan repayment performance among SACCO members. On the other hand, the study found that sex, age, loan size, loan utilization, loan monitoring and supervision, awareness, training and business development support had no association with loan repayment performance. The study recommended that Rural SACCO committees give attention when provided the loans to individual borrowers about their income level, borrower’s years of business experience, number each of borrower’s dependents, borrower’s education level and their marital status especially take care for young borrowers
