Factors Affecting Loan Repayment Performance Of Selected Micro Finance Institutions Found In Ambo Town

Abstract

This study was conducted in Ambo town Oromia regional state, Ethiopia. The main objective of the study is to examine the factors affecting loan repayment performance of selected micro finance institutions found in Ambo town. This study was descriptive and explanatory research design type. Research design was the program that guides the researchers in the process of collecting, analyzing and interpreting the data. The aim of this research was to examine the factors affecting loan repayment performance microfinance institution in Ambo town. The results of the model shows education level, loan type, , follow up, awareness creation, purpose of institution and income from activity by loan positively affect loan repayment performance of microfinance. Also loan diversions; interest rate, market availability and payback period are negatively affects loan repayment performance of microfinance. Recommended awareness creation trainings would better prepare employer to perform in the activity they engaged. Therefore, employers, which have sufficient access of training, repaid their loan than those less trained. In other way delivering of well-organized and sufficient training properly for employer, reduces the probability of defaulter