Determinants of Loan Repayment among Women Entrepreneurs in Oru East Local Government Area of Imo State, Nigeria

Abstract

The study focused on identifying the factors influencing loan repayment among women entrepreneurs in Oru East Local Government Area of Imo State, Nigeria. The specific objectives involved determining the socio economic characteristics of women entrepreneurs, sources of borrowing, rate of loan repayment, factors affecting loan repayment, and the importance of available loans to the respondents. The study used a simple random sampling technique to select 120 respondents. Primary data were collected through structured questionnaire and personal interviews. Data analysis involved the use of simple descriptive statistical tools such as means, percentages, and frequency distributions, a 4 point Likert scale, Ordinary Least Squares (OLS) regression model, Analysis of Variance (ANOVA), and Pearson Product Moment Correlation (PPMC). The findings revealed that the majority of the respondents were married (67%), young (58%), educated (100%), and experienced in handling financial and non financial issues (83%). Additionally, most respondents had large families that supported their enterprises through cheap labor and the supply of vital business information. The study also found that the majority of the respondents accessed their loans from formal financial institutions and had a moderate repayment rate of 54%. Significant variables influencing loan repayment among the respondents included age, operating costs, experience, income, and value of assets. Furthermore, the majority of the respondents agreed that loan availability benefitted them in expanding existing businesses, diversifying into new business lines, purchasing major inputs, and acquiring major assets. Based on these findings, the study recommended that loans should be extended to individuals with the necessary capacity to interact with formal financial institutions. Financial institutions should provide friendly and flexible policies to support loan repayment and create awareness among clients regarding the proper use of loans. Additionally, the government should consider subsidizing the price of inputs to reduce the financial burden and facilitate prompt loan repayment. These measures would ultimately stimulate the local economy, generate employment, and reduce poverty in the study area.