Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia

Kassahun Bekele Tegene

doi:doi:10.11648/j.ijafrm.20210603.12

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Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia

Kassahun Bekele Tegene

Published in International Journal of Accounting, Finance and Risk Management (Volume 6, Issue 3)

Received: 15 July 2021 Accepted: 23 July 2021 Published: 2 August 2021

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Abstract

The study examined the determinants of credit default by Micro Finance Institution borrowers the case Hawassa city. The researcher used a quantitative research approach with an explanatory research design to establish the effect of the independent variables on the dependent variable. The primary data were collected from 360 sampled borrowers of Micro Finance Institutions using a structured questionnaire. Both descriptive and inferential statistics analysis were done using SPSS version 21.0. Descriptive statistics were used to identify whether there is a large variance in data. The study also used correlation analysis to see the degree variation and direction of relationship among variables. Inferential statistics were used to test hypotheses. The researcher employed logit model to identify the impact of explanatory variables on dependent variable. The results of the study revealed that ten independent variables incorporated in the model that included gender, education, age, lack of experience, having other sources of income, lack of financial planning skill, loan diversion rate, repayment period, involvement in service sector business activity, and loan follow up have a statistically significant impact on credit default. Based on the findings of the study, the researcher forwarded possible recommendations for the Micro Finance Institutions to improve credit collection of borrowers more than the current status.

Published in	International Journal of Accounting, Finance and Risk Management (Volume 6, Issue 3)
DOI	10.11648/j.ijafrm.20210603.12
Page(s)	76-84
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Credit Default, Determinants, Microfinance Institutions, Hawassa City, Ethiopia

References

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APA Style

Kassahun Bekele Tegene. (2021). Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia. International Journal of Accounting, Finance and Risk Management, 6(3), 76-84. https://doi.org/10.11648/j.ijafrm.20210603.12

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ACS Style

Kassahun Bekele Tegene. Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia. Int. J. Account. Finance Risk Manag. 2021, 6(3), 76-84. doi: 10.11648/j.ijafrm.20210603.12

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AMA Style

Kassahun Bekele Tegene. Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia. Int J Account Finance Risk Manag. 2021;6(3):76-84. doi: 10.11648/j.ijafrm.20210603.12

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@article{10.11648/j.ijafrm.20210603.12,
  author = {Kassahun Bekele Tegene},
  title = {Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {6},
  number = {3},
  pages = {76-84},
  doi = {10.11648/j.ijafrm.20210603.12},
  url = {https://doi.org/10.11648/j.ijafrm.20210603.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20210603.12},
  abstract = {The study examined the determinants of credit default by Micro Finance Institution borrowers the case Hawassa city. The researcher used a quantitative research approach with an explanatory research design to establish the effect of the independent variables on the dependent variable. The primary data were collected from 360 sampled borrowers of Micro Finance Institutions using a structured questionnaire. Both descriptive and inferential statistics analysis were done using SPSS version 21.0. Descriptive statistics were used to identify whether there is a large variance in data. The study also used correlation analysis to see the degree variation and direction of relationship among variables. Inferential statistics were used to test hypotheses. The researcher employed logit model to identify the impact of explanatory variables on dependent variable. The results of the study revealed that ten independent variables incorporated in the model that included gender, education, age, lack of experience, having other sources of income, lack of financial planning skill, loan diversion rate, repayment period, involvement in service sector business activity, and loan follow up have a statistically significant impact on credit default. Based on the findings of the study, the researcher forwarded possible recommendations for the Micro Finance Institutions to improve credit collection of borrowers more than the current status.},
 year = {2021}
}

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TY  - JOUR
T1  - Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia
AU  - Kassahun Bekele Tegene
Y1  - 2021/08/02
PY  - 2021
N1  - https://doi.org/10.11648/j.ijafrm.20210603.12
DO  - 10.11648/j.ijafrm.20210603.12
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
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AB  - The study examined the determinants of credit default by Micro Finance Institution borrowers the case Hawassa city. The researcher used a quantitative research approach with an explanatory research design to establish the effect of the independent variables on the dependent variable. The primary data were collected from 360 sampled borrowers of Micro Finance Institutions using a structured questionnaire. Both descriptive and inferential statistics analysis were done using SPSS version 21.0. Descriptive statistics were used to identify whether there is a large variance in data. The study also used correlation analysis to see the degree variation and direction of relationship among variables. Inferential statistics were used to test hypotheses. The researcher employed logit model to identify the impact of explanatory variables on dependent variable. The results of the study revealed that ten independent variables incorporated in the model that included gender, education, age, lack of experience, having other sources of income, lack of financial planning skill, loan diversion rate, repayment period, involvement in service sector business activity, and loan follow up have a statistically significant impact on credit default. Based on the findings of the study, the researcher forwarded possible recommendations for the Micro Finance Institutions to improve credit collection of borrowers more than the current status.
VL  - 6
IS  - 3
ER  -

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Author Information

Kassahun Bekele Tegene

Department of Accounting and Finance, College of Business and Economics, Hawassa University, Hawassa, Ethiopia

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Plain Text BibTeX RIS

APA Style

Kassahun Bekele Tegene. (2021). Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia. International Journal of Accounting, Finance and Risk Management, 6(3), 76-84. https://doi.org/10.11648/j.ijafrm.20210603.12

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ACS Style

Kassahun Bekele Tegene. Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia. Int. J. Account. Finance Risk Manag. 2021, 6(3), 76-84. doi: 10.11648/j.ijafrm.20210603.12

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AMA Style

Kassahun Bekele Tegene. Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia. Int J Account Finance Risk Manag. 2021;6(3):76-84. doi: 10.11648/j.ijafrm.20210603.12

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@article{10.11648/j.ijafrm.20210603.12,
  author = {Kassahun Bekele Tegene},
  title = {Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {6},
  number = {3},
  pages = {76-84},
  doi = {10.11648/j.ijafrm.20210603.12},
  url = {https://doi.org/10.11648/j.ijafrm.20210603.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20210603.12},
  abstract = {The study examined the determinants of credit default by Micro Finance Institution borrowers the case Hawassa city. The researcher used a quantitative research approach with an explanatory research design to establish the effect of the independent variables on the dependent variable. The primary data were collected from 360 sampled borrowers of Micro Finance Institutions using a structured questionnaire. Both descriptive and inferential statistics analysis were done using SPSS version 21.0. Descriptive statistics were used to identify whether there is a large variance in data. The study also used correlation analysis to see the degree variation and direction of relationship among variables. Inferential statistics were used to test hypotheses. The researcher employed logit model to identify the impact of explanatory variables on dependent variable. The results of the study revealed that ten independent variables incorporated in the model that included gender, education, age, lack of experience, having other sources of income, lack of financial planning skill, loan diversion rate, repayment period, involvement in service sector business activity, and loan follow up have a statistically significant impact on credit default. Based on the findings of the study, the researcher forwarded possible recommendations for the Micro Finance Institutions to improve credit collection of borrowers more than the current status.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Determinants of Credit Default of Micro Finance Institution Borrowers: The Case of Hawassa City, Sidama Region, Ethiopia
AU  - Kassahun Bekele Tegene
Y1  - 2021/08/02
PY  - 2021
N1  - https://doi.org/10.11648/j.ijafrm.20210603.12
DO  - 10.11648/j.ijafrm.20210603.12
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 76
EP  - 84
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20210603.12
AB  - The study examined the determinants of credit default by Micro Finance Institution borrowers the case Hawassa city. The researcher used a quantitative research approach with an explanatory research design to establish the effect of the independent variables on the dependent variable. The primary data were collected from 360 sampled borrowers of Micro Finance Institutions using a structured questionnaire. Both descriptive and inferential statistics analysis were done using SPSS version 21.0. Descriptive statistics were used to identify whether there is a large variance in data. The study also used correlation analysis to see the degree variation and direction of relationship among variables. Inferential statistics were used to test hypotheses. The researcher employed logit model to identify the impact of explanatory variables on dependent variable. The results of the study revealed that ten independent variables incorporated in the model that included gender, education, age, lack of experience, having other sources of income, lack of financial planning skill, loan diversion rate, repayment period, involvement in service sector business activity, and loan follow up have a statistically significant impact on credit default. Based on the findings of the study, the researcher forwarded possible recommendations for the Micro Finance Institutions to improve credit collection of borrowers more than the current status.
VL  - 6
IS  - 3
ER  -

Copy | Download