ASSESSMENT OF FACTORS CONTRIBUTING FOR LOAN NON-REPAYMENT THE CASE OF OMFI GURAGHE ZONE BRANCH

Abstract

This study was conducted with the objective of “assessing factors contributing for loan non-repayment in Omo Micro Finance Institution Guraghe zone branch “ using both primary and secondary data . Descriptive research design was used to carry out the study. Primary data were collected using structured questionnaires with the help of trained data collectors, and secondary data were also collected from Omo Micro Finance Institution Guraghe zone branch office, and sub-branch offices. Out of 383 samples data were collected from 370 defaulters (96.7%). Statistical Package for Social Sciences (SPSS) software was employed to analyze data. The results of the analysis showed that age, marital status, family members, education status, type of business engaged/residence, type of loan, type of borrowing, amount of loan released, delayed loan release, inconvenient repayment period , and level of income ,training and monitoring were the major contributing factors for non-repayment of loan to Omo Micro finance Institution Guraghe Zone branch office. The remaining independent variables used in the research had a contribution for the non-repayment of the loan but were not significant contributing factors .Revision of policy issues, and strengthening the institutional capacity was recommended