Determinants of Loan Repayment Performance: the Case of Zemen Bank S.C
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Date
2023-06-09
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A.A.U.
Abstract
This study was conducted on the topic of determinants of loan repayment performance in case of Zemen Bank S.C. with the objective of assessing the determinants of loan Repayment Performance .To conduct this study, the researcher used descriptive and explanatory research design and primary and secondary data were used. Primary data were collected using questionnaires and the secondary data were collected through verifying documents. The total population of the study was 2041 and the total sample size was 250. Convenience sampling techniques were employed to select a sample from borrowers of the bank. In this study the data obtained from borrowers was analyzed using descriptive statistics analysis and Binary Logit Model was used to measure the variables those determining loan repayment performance. In the logistic regression model, a total of nine explanatory variables representing two dimensional factors namely borrowers’ specific factors and lender-specific factor were considered to analyze loan repayment performance. Based on the findings of this study, the researcher concludes that gender, family/household size, proper utilization of loans and loan follow-up/supervision have found to be significant effect on loan repayment performance. On the other hand, age, educational status, other source of credit, repayment period and experience have found to be insignificant effect on loan repayment performance. Finally, possible recommendations were suggested that, the bank might consider the significant variables such as gender, family/household size, proper utilization of loans and loan follow-up/supervision as the basis for loan approval and to minimize loan default rate.
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Keywords
loan repayment ,Defaulter, non- defaulter, binary logistic