Abstract:
The contributions of financial institution to the economy can never be overemphasized.
However, most of these institutions are faced with various challenges including non-payment
of loans which constantly affect their operations and subsequently survival. Consequently,
this study was to investigate the factors affecting loan repayment performance of selected
siinqee bank customers found in burayu town focusing on the three branches namely Burayu
Branch, Gefersa Nono Branch and Gefersa Guje Branches. To achieve this objective
descriptive and explanatory research design is used in order to analyze the topic thorough
giving a narration of their relationship and influence often via surveys to describe or
measure a phenomenon so as to answer the questions of who, what, where, when, how and
data was collected by using primary from both borrowers and staffs of the banks. The study
was used mixed research approach to set the objectives as well as the study was used
purposive and simple random sampling technique. The respondents comprised 1 customer
service manager, 3 branch managers, 3 loan officers, 5 customer relation manager and 119
borrowers from the total population of 517, then the total respondent was 131. The primary
data was collected by using open and closed ended questionnaires and interview by using
structural. The researcher used SPSS and STATA software to analyze the data. The study was
used both descriptive and explanatory study design and used mixed research approaches.
The combination of qualitative and quantitative approaches provides the most complete or
insightful understanding. Correlation analysis of the study variables; credit controls and
monitoring, interest rates, guarantees, credit growth, inflation, and political instability are
positively related to loan repayment performance. Correlation coefficient estimates were
0.617, 0.193, 0.509, 0.675, 0.201 and 0.130. From the results, it can be seen that loan size
and loan supervision and follow up have Strong and positive relationship with loan
repayment performance. Regarding on the findings, banks and its borrowers are
recommended to take corrective action on relevant factors affecting the loan repayment
performance of the bank borrowers.
