Determinants of Loan Repayment Performance of Micro and Small Enterprises in the Case of Adea Woreda, Bishoftu Town

Abstract

The aim of the study was to analyze Determinants of loan repayment performance of Micro and small enterprise financed by Addis credit and saving institution in Case of Adea woreda, Bishoftu city. The study used both questioner and interview form sample respondent of selected leaders of MSE. Out of 240 MSE the Target Participants comprised of 120 leaders of MSEs were selected by using simple random and then stratified sampling technique were used. Data was analyzed by using Descriptive statistics and inferential statistics with STATA 14.2 versions. The result showed that majority of the sample borrowers are males which constitute 62.5% as 37.5% are females of this 29.2% Male respondents ‟ were relatively more defaulter than the female respondents” which is 18.3%. Supervision for loan utilization and repayment, training offered by the microfinance institution, social ties, ease of access for loan have statistically positive impact on repayment of loan, as group composition, enterprise member size and loan repayment period have negative and statistically significant impact on loan repayment. Based on the findings concerned body should give more awareness and training, encourage and supervised the borrower.

Keywords: MSEs, loan repayment, performance, supervision and Microfinance.

DOI: 10.7176/RJFA/14-2-01

Publication date: January 31^st 2023