Accounting and Finance

Permanent URI for this college

http://etd.aau.edu.et/handle/123456789/2

Browse

Browsing Accounting and Finance by Author "Abate, Sewale (Phd)"

Now showing 1 - 1 of 1
  • No Thumbnail Available
    Item
    Factors Affecting Loan Repayment Performance of Borrowers in the Case of Dashen Bank Addis Ababa District
    (2021-01) Tadesse, Tabor; Abate, Sewale (Phd)
    The loan is a single largest asset in banks’ balance sheet. Thus, it’s essential to learn about the factors that affect this asset. However; some of the loan given out become non-performing or end up in default and adversely affect the financial performance of commercial banks. Dashen bank A.A district currently provides different types of loan to its customers. But its nonperforming loan rate is becoming high and high comparing to the previous periods. Although different studies were undertaken to find out the different factors that contributed for non-performing loans most of them concentrated on micro finance which can’t be generalized to the bank context in addition to this new factors like effect of covid 19 and corruption was included in the study. The general objective of the study is to identify and explain how and which client, lender and business characteristics affect loan repayment performance of Dashen bank A.A district borrowers. Identifying factors that affect successful loan repayment will help Dashen Bank to be aware of the current factors influencing loan repayment performance and reformulate appropriate credit program. There are many researches regarding repayment of loans, in Ethiopia as well as internationally. The researcher’s states different empirical and theoretical literature reviews from different perspective and titles. And Based on the objective of the study conceptual model has been developed. The research adopted descriptive research designing and it applied a qualitative and quantitative research methodology. The quantitative data method will be employed to collect the primary data from the sample respondents in relation to the socio-economic characteristics of borrowers, business factors and loan related factors. The hosmer and lemeshow test result shows that 0.821 which means that the model is fit in addition Nagelkerke R Square suggests that the model explains roughly 88.5% of the variation in the outcome or all the 19 variables together or jointly explain 88.5% of loan repayment performance of a borrower by the model. There are around 11 significant factors which can distinguishes credit worthy borrowers and not creditworthy borrowers, so scrutinize borrowers based on those factors and give the loan to the one which have high rate comparing to the other borrowers. Keywords: borrowers, loan repayment, logistic mode