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Factors Affecting Loan Repayment Performance of Microfinance Institution Borrowers: The Case of Omo Microfinance at Wondo Genet Woreda, Ethiopia

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  • Akalewold Fedilu Mohammed

    (School of Governance and Development Studies, Hawassa University, Hawassa, Ethiopia)

  • Mesfin Hirpato Wobe

    (Wondo Genet Woreda Public Service and Human Resource Development Office, Wondo Genet, Ethiopia)

Abstract

This study investigated the factors that affect the loan repayment performance of Omo Microfinance Institution borrowers at Wondo Genet Woreda, Ethiopia. Both primary and secondary data were used in the study. The required data were collected from 225 borrowers of Omo Microfinance. Respondents were selected by a stratified random sampling technique. Both qualitative and quantitative methods of analysis were used. The findings of the study revealed that 44.9% of borrowers in the study area did not repay the amount of money they borrowed as per credit schedules. The major factors that affect the loan repayment performance of borrowers were their sex, educational level, family size, borrowing experience, timelines of loan, repayment period and advisory visit.

Suggested Citation

  • Akalewold Fedilu Mohammed & Mesfin Hirpato Wobe, 2019. "Factors Affecting Loan Repayment Performance of Microfinance Institution Borrowers: The Case of Omo Microfinance at Wondo Genet Woreda, Ethiopia," International Journal of Applied Behavioral Economics (IJABE), IGI Global, vol. 8(2), pages 27-43, April.
    • Handle: RePEc:igg:jabe00:v:8:y:2019:i:2:p:27-43
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    Cited by:

    1. Adil EL Fakir & Richard Fairchild & Youssef Lamrani Alaoui & Dora Chan & Mohamed Tkiouat & Zaid Amer, 2024. "Kinship, gender and social links impact on micro group lending defaults," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 2527-2542, April.
    2. Josphat Nyoni & Precious Kwashirai & Oliver Kapepa & Linience Tsitsi Charuma & Andrew Jeremiah & Martin Dandira, 2021. "Organizational Capabilities that Can Improve Profitability of Micro-Finance Institutions in Periods of Economic Crisis. Experiences from the Zimbabwe," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(08), pages 459-466, August.

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