Determinants Of Loan Repayment Performance: The Case Of Addis Credit And Saving Institution

Abstract

The study examined the factors influencing loan repayment performance micro enterprises financed by Addis Credit and Saving institution in Addis Ababa, The study used a cross-sectional survey design was used to select 384 borrowers’ respondents in the study area and structured questionnaire’s administered on them to collect data. Descriptive statistics was used to analyzed the show that borrower characteristics, loan term, and credit policies the respondents logistic regression was used to quantitatively determine show that borrower characteristics, loan term, and credit policies that influence the level loan repayment among enterprises' small and micro enterprises in the study area. Data analysis was conducted using SPSS version 26.The results of the study show that borrower characteristics, loan term, and credit policies have a significant effect on loan repayment performance. However, loan characteristics and institutional factors were found to have no significant effect on loan repayment performance. The study recommends that microfinance institutions should pay more attention to borrower characteristics, loan term, and credit policies when designing loan products and implementing loan monitoring and collection strategies