Determinants of Loan Repayment Performance of Borrowers: The Case of Siinqee Bank Share Company Sellected Woredas of West Shoa Disrict.

Abstract

The study was conducted in west Shoa zone and its aim was to determinants of loan repayment performance of Siinqee bank borrowers. To achieve the objective of the study, explanatory and descriptive research designs with qualitative and quantitative research approaches have employed. This study was applied a multi-stage sampling design in order to select the borrowers respondents of Siinqee Bank s.c. The study used both primary and secondary data sources. To achieve the objective the primary data was collected through questionnaires and interview from a sample of 194 borrowers selected from the total population of 16,991 using simple random sampling techniques. Secondary data were used from published and unpublished documents of their office to know profile of borrowers. The collected data was analyzed by employing descriptive statistics and a binary logistic regression model by using SPSS software version 20. This result indicated that out of sixteen predicting variables used in this study eleven variables were found to be significant that influence loan repayment performance of Siinqee bank borrowers in the study area. Based on the findings, borrowers who reside in areas where there are security problems have lower loan repayments compared to those of other parents, so the government should intervene to stabilize the security problems and the borrowers that high have training able to pay better than the borrowers that were in lower have training therefore; the Siinqee bank should provide adequate training before issuing loans; Also the amount of loan size given to borrowers should be commensurate with their business therefore, the bank should take into consideration the loan size.