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The impact of training and monitoring on loan repayment of microfinance debtors in Ghana

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  • Agbeko, Daniel
  • Blok, Vincent
  • Omta, S.W.F.
  • Van der Velde, G.

Abstract

Microbusiness entrepreneurs training and monitoring programmes are widely recognized as key to loan repayment performance of microfinance institution (MFI) loan clients in developing countries. Empirical evidence is, however, largely lacking and where present, not consistent. The present paper introduces objective data on loan repayments and examines whether loan client training and monitoring improve loan repayment rates. We conducted a two-step longitudinal survey. We collected baseline data on 229 uniCredit Ghana Limited MFI loan client files. One and half years later, after having introduced training and monitoring interventions, follow-up data on the same loan clients were collected. Results showed that training interventions fail to improve loan repayment rates. Strikingly, client monitoring does improve repayment rates, irrespective of the clients’ educational level, business experience or gender. These results suggest that MFI’s may significantly improve repayment rates should they consistently monitor their loan clients.

Suggested Citation

  • Agbeko, Daniel & Blok, Vincent & Omta, S.W.F. & Van der Velde, G., 2017. "The impact of training and monitoring on loan repayment of microfinance debtors in Ghana," Journal of Behavioral and Experimental Finance, Elsevier, vol. 14(C), pages 23-29.
    • Handle: RePEc:eee:beexfi:v:14:y:2017:i:c:p:23-29
    DOI: 10.1016/j.jbef.2017.03.002
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    Cited by:

    1. Kumar, Satish & Rao, Sandeep & Goyal, Kirti & Goyal, Nisha, 2022. "Journal of Behavioral and Experimental Finance: A bibliometric overview," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).
    2. Andualem Kassegn & Ebrahim Endris, 2022. "Factors affecting loan repayment rate among smallholder farmers got loans from the Amhara Credit and Saving Institution: In the case of Habru District, Amhara Regional State, Ethiopia," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 25(1), pages 73-96, March.
    3. Farzana Sharmin & Ridzwan Bakar, 2018. "Effect of Household Factors on Repayment Ability among Islamic Microfinance Borrowers in Bangladesh," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(8), pages 1-40, June.
    4. Liqi Yi & Tao Li & Xiangyi Wang & Gentana Ge & Ting Zhang, 2022. "Corporate social responsibility performance evaluation from the perspective of stakeholder heterogeneity based on fuzzy analytical hierarchy process integrated TOPSIS," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(4), pages 918-935, July.

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