Determinants of Loan Default in Saving and Credit Cooperatives Societies’ the case of Toke Kutaye woreda west shoa Zone Oromia Regional state Ethiopia

Abstract

The objective of this study was too assessed the Determinants of loan default and to determine the magnitude of loan default saving and credit Cooperatives Societies in Toke Kutaye Woreda. That both Quantitative and qualitative research approach and data were collected from primary and secondary sources of data collection. The cross-sectional survey was conducted using data collection instrument both questionnaire and interviews. Target population to have 1,942 SACCOs members in Toke kutaye woreda three stage sampling procedure was applied to select the sample respondents. In the third stage a total of 200 SACCOs members was selected using simple random sampling methods , The sample size was determined based on the simplified formula propose by Yamane (1967). The types of data analysis were applied in this study, namely descriptive statistics determined the magnitude of loan default and econometric analysis is used such as Multivariable Logistic Regression and Ordinary logistic regression Analysis of Determinants of Loan Default in Saving and Credit Cooperatives. For both descriptive statistics and econometric models analysis:-SPSS version 27 were employed. The result indicated was determined the magnitude the Status of loan was analysis and loan default frequency 155 (77.5%). The result was indicated the determinants of loan default sex statistical significant, younger age none statistical significant, being married statistical significant ,single SACCOs members none statistical significant compared with Widowed, low household SACCOs members none statistical significant, the time between loan application and disbursement none statistical significant, the chance used to intended purpose of the loan none statistical significant, time given to borrower to pay back the entire loan none statistical significant and experience the job was the loan you took of SACCOs an individual non statistical significant. The study recommends that Develop gender-specific financial education and support programs to address the higher likelihood of loan default among female borrowers,. Positive social changes occur in many areas including in increased household incomes because of doing profitable businesses to minimize loan default. SACCOs members minimize time between loan application, approval and disbursement schedule to facilitating loan and loan borrows on timely to minims the risks of loan defaults. Credit’s process for personal loans is SACCOs members simple and involves quick.