Determinants of Loan Repayment of Micro and Small Enterprises in Jimma town, Ethiopia

Determinants of Loan Repayment of Micro and Small Enterprises in Jimma town, Ethiopia

Ofgaha Alemu Dire -I have BA degree in Accounting and Finance from Bule Hora University -I have MSc degree in Accounting and Finance from Jimma University -Currently I am Lecturer at Bule Hora University

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Bule Hora University

Determinants of Loan Repayment of Micro and Small Enterprises in Jimma town, Ethiopia

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Abstract

The main objective of this study was to examine the determinants of loan repayment of Micro and Small Enterprises (MSEs) in Jimma town, Ethiopia. This study examined the effect of Individual characteristics, loan characteristics and firm characteristics on loan repayment of micro and small enterprises in Jimma town only. The study used descriptive research design. Primary data was collected through self administered questionnaire and it was collected from random samples of 341 Micro and Small Enterprises (MSEs) by stratifying into Five group. Once the relevant data was gathered, the collected data was analyzed through descriptive and econometric model known as binary logistic regression model was used in order to examine determinants that impeding Micro and small enterprise’s loan repayment by distinguishing characteristics of MSEs. The descriptive result of analyzed data revealed that individual characteristics, loan characteristics and firm characteristics influenced loan repayment of enterprises in the study area. In addition, the result of binary logistic regression model indicated that Sex of respondents and Experience positively and significantly affect loan repayment. The inconvenience of loan payback period, Lack of financial skill and planning negatively and significantly affected loan repayment of enterprises. Lack of Marketing Skills, Follow up and supervision positively and significantly influenced loan repayment of micro and small enterprises.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

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How to Cite This Article

Ofgaha Alemu Dire. 2018. \u201cDeterminants of Loan Repayment of Micro and Small Enterprises in Jimma town, Ethiopia\u201d. Global Journal of Management and Business Research - B: Economic & Commerce GJMBR-B Volume 18 (GJMBR Volume 18 Issue B4).

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-B Classification FOR Code: 149999

Submission ReceivedDecember 6, 2017
Peer Review Double Blind
Handling Editor
Accepted January 1, 2018
Published January 15, 2018

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June 15, 2018

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Article Matrices

Total Score: 101

Country: Unknown

Subject: Global Journal of Management and Business Research - B: Economic & Commerce

Authors: Ofgaha Alemu Dire (PhD/Dr. count: 0)

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