Case Study

Performance of Loan Repayment Determinants in Ethiopian Micro Finance: An Analysis

Identifying factors that affect loan repayment performance of borrowers in Ethiopia
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This case study aims to analyze and identify the determinants of loan repayment performance of the borrowers in Sidama Micro Financing Institution (SMFI). SMFI is an MFI in Ethiopia working to provide credit and savings services to urban and rural poor who do not have access to financial services from formal banks. The study identifies and evaluates the major socio-economic factors that influence loan repayment rate of borrowers. It investigates and differentiates loan and business related factors that affect loan repayment performance of borrowers in SMFI and assesses the challenges institutions and borrowers face regarding the loan repayment process. The research for the study is based on data collected from three branches of SMFI and it covers the following sections in detail:

  • Objective, significance, and limitations of the study;
  • Discussion on the microfinance sector in Ethiopia;
  • Introduction to SMFI sharing company with a focus on its performance from 2009 to 2013;
  • Literature review of relevant studies;
  • Methodology of the study with a focus on the study area, research design, data sources, and sampling technique;
  • Discussion on results and findings;
  • Challenges and problems faced by SMFI;
  • Summary, conclusion, and recommendations.

About this Publication

By Pasha, S.A.M. , Negese, T.