Determinant Of Loan Repayment Performance Of Micro And Small Enterprises:The Case Of Selected Woredas Of West Shoa Zone, Oromia Regional State, Ethiopia

Abstract

The main objective of the study was determinant of loan repayment performance of Micro and Small Enterprises: The Case of Selected Woreda of West Shoa Zone, Oromia Regional State, Ethiopia. This study used descriptive and explanatory research design. The study used both primary and secondary data sources. To achieve the objectives the primary data collected using questionnaires and interview from customers selected sample size and simple random sampling techniques. Descriptive statistic and econometric model used. Descriptive statistics with the help of Pie charts, graphs, table, Percentages were used in analyzing the collected data. Furthermore, a chisquare test of independence was employed to compare the relationship of dependent variable show that sex, loan diversion, business sector,marital status, occupation, , suitability of loan repayment period, distance from residence were found important in influencing loal repayment performance of the borrowers. However, educational level, family size,age, training,supporvision, loan size and loan diversion were under to be statistically insignificant.The study concludes that various socioeconomic and institutional factors play a crucial role in influencing determinant loan repayment performance of Micro and Small Enterprises. Based on the findings of the study, some recommendations were made to improve loan repayment performance in the study area. Bank should set business and income based suitability of repayment period,not loan divert and model lending group borrowers.