Loan Repayment Capacity Research Articles

The Impact of Household Debt on Domestic Violence (DV) Against Children in Indonesia

Financial difficulties within a household could contribute to cases of domestic violence (DV). This study investigates the correlation between household debt and occurrences of domestic violence towards children in Indonesia. The study employs a quantitative methodology, notably utilising multinomial logistic regression analysis. Evidence suggests that households with several forms of debt are more prone to exhibiting both psychological and physical domestic violence against children, in contrast to households without domestic violence. This association maintains its significance even after taking into account control variables, such as the age of the spouse, the level of education of the head of home, the spouse's level of education, the size of the household, the perception of domestic violence, the schooling status of the children, and the age of the children are statistically associated with psychological, physical, and both types of domestic violence against children. Policymakers should assess household loan repayment capacity to limit lending to those at risk of financial struggle, while the government should implement parental education programs to raise awareness of child abuse and encourage non-violent parenting techniques.

Willingness and capacity of borrowers for loan repayment among farmers in Delta State Nigeria

Willingness of borrowers to repay loan and their capacity to repay borrowed fund has been an enigmatic challenge in the financing of agricultural enterprises in the tropics. As it stands, there is lack of empirical information on willingness of borrowers to repay loan and their capacity to repay credit. Investigating this challenge will improve agriculture in Delta state, Nigeria. This study derives its significance from its implications and usability among credit institutions. This study investigates willingness and capacity of borrowers for credit repayment among farmers in Delta State, Nigeria. A multistage sampling approach was used to select 216 farmers, Descriptive statistics, multiple regression, and binary logistic regression were employed in the analysis of collected data. The findings of the study show a mean amount of ₦460,972.22 was borrowed and ₦253,268.52 was repaid with a loan repayment performance of 54.94% and loan default rate of 45.1%. Further result indicates that 56.5% of farmers express willingness to repay loans, while 43.5% show unwillingness to repay borrowed fund. Further finding reveals that 40% of the farmers possess capacity to repay loan.. The study revealed that there is a significant difference in loan repayment capacity of poultry< fish, < arable crop farmers, with an F-value of 5.669 and (P≤ 0.05). Regression analysis identifies significant predictors of loan repayment capacity to include stock size, off-farm income, and farm income. Diversified income sources and effective farm management practices play crucial roles. Logistic regression indicates that longer repayment periods, larger stock sizes, and greater farming experience positively influence farmers’ willingness to repay loans (P≤0.05). It was recommended among others that financial institutions should offering flexible loan terms and sizes according to borrowers capacity. Encouraging farmers to diversify their income sources can improve loan repayment capacity of farmers.

DETERMINANTS OF LOAN REPAYMENT OF THE SHRIMP HOUSEHOLDS: AN EMPIRICAL STUDY IN CA MAU PROVINCE, VIETNAM

The aim of this paper was to analyze the determinant factors of the ability of shrimp farmers to repay loans on time and the decisive factors of the on-time loan repayment amount. Based on the primary data of 210 shrimp farming households in Ca Mau province, the study applied a two-step regression model of Heckman to test the proposed hypotheses. The research results showed that the number of dependent members, loan amount and number of farming crops negatively impact the ability to repay the loan in a timely manner, while total assets, shrimp farming experience and loan purpose positively influence the ability to repay the loan on time of shrimp households.In addition, the regression results also showed that number of loan maturity and size of shrimp farming land negatively affect the amount of on-time loan repayment, whereas the education level of the household head and total assets positively influence the on-time loan repayment amount. Based on the empirical findings, the authors proposed several recommendations for improving the loan repayment capacity of the households in the study area.

Socio-Economic Determinants of Loan Repayment Capacity of Somali Microfinance Clients in Kebridahar Town, Somali Regional State, Ethiopia

Somali microfinance finance institute (SMFI) was established to provide inclusive financial services to rural and urban poor households with the ultimate goal of poverty alleviation in the Somali regional state. Even though SMFI is working better to upgrade itself to a licensed bank-Shabelle Bank and is showing livelihood improvement for poor households in the Somali region so far, loan repayment problems are currently the major challenge facing the institute, which can discourage it from promoting and extending credit to poor people in the future. Therefore, this study intended to assess the determinants of the loan repayment capacity of borrowers in the Kebridahar District of Korahey Zone. Out of the total 4330 borrowers received from the SMFI Kebridahar branch, 188 representatives were selected by dividing the borrowers into two strata, in terms of loan payment status defaulters and non-defaulters. Data were collected from both primary and secondary sources. The primary data was collected from a sample of 188 borrowers using a two-stage sampling method. Descriptive statistics and an econometric model were used to analyze the data. The result of descriptive statistics revealed that Education level, household head experience in credit, family size, marital status, loan diversion, occupation type, and getting trained were shown significant differences between defaulters and non-defaulters. According to the logistic regression model result out of nine variables included in the model, Age, education level, and access to training of household head positively and significantly affected the loan repayment capacity of the borrowers while marital status (get-married) and loan size were found to be negative and significantly affecting the repayment capacity of the borrowers. Therefore, this study recommends that the microfinance and other regional concerning offices should give attention to these significantly affecting variables for further strategic and policy decisions.

Social Capital and Loan Repayment Capacity of Agripreneurial Groups' in Abia State, Nigeria

Entrepreneurship is the ability to take significant amount of risk while managing and organizing a new or existing business enterprise with the sole motive of making profits. Agricultural entrepreneurship, also known as agripreneurship is the ability of farmers or farm firms to take substantial risks while producing, managing, directing and marketing their agricultural produce. Agripreneurs are the agricultural entrepreneurs. Selected social capital variables such as years of membership in social groups/organizations, number of meeting attendance, cash and labour contributions of members, etc., were incorporated into the research to determine the agripreneurs’ loan repayment capacity in Abia State, Nigeria. A multi-stage purposive sampling technique was employed to select the respondents. Greater percentage of the agripreneurs were male. Mainstream of them were in their active and productive age, hence could form groups for easy access to credit or loans in their respective enterprises. The agripreneurial groups’ sourced their loans from money lenders, ROSCA (Rotating Savings and Credit Association), family and friends/relatives. Others sources were through microfinance banks, commercial banks, self-help groups, cooperative societies and savings collectors/mobile bankers. Majority of the agripreneurs were regarded as good credit risk. The major factors affecting the agripreneurial loan repayment capacity was trust, assets, interest rate and the loan duration. Agripreneurs should be encouraged to participate more actively in group activities, not just for what they can benefit but for what they can give; as effective participation accelerates access to pooled productive resources.

Limity ustawowe a zróżnicowanie kosztów kredytu

W związku z rosnącym zadłużeniem społeczeństwa coraz ważniejsze staje się kształtowanie kompetencji konsumentów w zakresie podejmowania decyzji kredytowych. Interesy konsumentów chroni się w ramach różnych celów szczególnych. Należą do nich m.in. ochrona przed ponoszeniem nadmiernych opłat oraz przed ryzkiem utraty zdolności spłaty kredytu. Interwencje regulatora w postaci limitów na odsetkowe i pozaodsetkowe koszty kredytu służą realizacji pierwszego z wymienionych celów. Studia literatury przedmiotu oraz wnioski z przeprowadzonej analizy ofert na kredyt gotówkowy największych banków w Polsce wskazują na zróżnicowane znaczenie regulacji w zakresie ograniczania kosztów kredytu. Stopy oprocentowania kredytu gotówkowego, stosowane przez znaczną liczbę banków objętych badaniem, okazały się zbliżone do maksymalnego poziomu ustawowego, co może oznaczać, iż regulacje stanowią faktyczną barierę chroniącą konsumentów przed ponoszeniem nadmiernych kosztów. Natomiast w odniesieniu do pozaodsetkowych koszów kredytu wysokość opłat okazała się odległa od limitów ustawowych, co oznacza brak faktycznego znaczenia ograniczeń w tym segmencie rynku kredytowo-pożyczkowego. Ponadto, stopień zróżnicowania całkowitych kosztów kredytu w analizowanych ofertach kredytu gotówkowego okazał się wysoki. Oznacza to, że istniejący stan rynku nie chroni konsumentów przed ryzkiem „przepłacenia” za kredyt i nie zwalnia ich z konieczności analizy ofert.

An Analysis of the Potentiality (Loan Repayment Capacity) of Unorganised Sector Employees on the basis of Ratio Analysis Related to their Disposable and Discretionary Income

An Analysis of the Potentiality (Loan Repayment Capacity) of Unorganised Sector Employees on the basis of Ratio Analysis Related to their Disposable and Discretionary Income

Analysis of Factors Influencing Farmers Loan Repayment Capacity in Abia State

Analysis of Factors Influencing Farmers Loan Repayment Capacity in Abia State

Loan Repayment Capacity of Cooperative Farmers in Ohaukwu Local Government Area of Ebonyi State, Nigeria

Loan Repayment Capacity of Cooperative Farmers in Ohaukwu Local Government Area of Ebonyi State, Nigeria

Assessment of Loan Repayment Capacity of Cooperative Farmers in Bayelsa State, Nigeria

The study assessed loan repayment capacity of cooperative farmers in Bayelsa State between 2009 and 2014. It specifically examined the socio-economic profile of the cooperative farmers, estimated the rate of loan repayment by borrowers and determined the loan recovery strategies of the farmers’ cooperatives societies. A multistage sampling technique was used to select 200 respondents in the study area. Structured questionnaire and interview schedule were used to obtain data from the respondents. Data were analyzed using percentages, means, multiple regression, loan repayment indices, t-test and F-test. The result showed that 80% of the loans granted to the beneficiaries were repaid back while 19.84% of the borrowers had their loan outstanding. Farm size and years of cooperative membership were found to have a positive effect on loan repayment capacity. The amount of loan received and net farm income recorded positive t-value and was statistically significant. It was recommended that farmers be encouraged to join cooperative societies so as to take advantage of economies of scale.

FACTORS INFLUENCING LOAN REPAYMENT BY CREDIT BENEFICIARIES OF MICROFINANCE INSTITUTIONS IN THE FAR NORTH REGION, CAMEROON

In the Extreme North Region of Cameroon, the non-performing loans increased continuously by 17.5%, as the number of banks in the financial sector facing insolvency continued rising. Hence, the present study is carried out to understand how members of microfinance institutions (MFIs) cope with the credit they are awarded in this region. Using questionnaire addressed to 201 members of MFIs (comprised of 107 non-defaulters and 94 defaulters), the descriptive statistics and logit model are used in order to analyze the factors affecting the loan repayment capacity of credit beneficiaries in the MFIs. The results indicate that, members with small household size, with profitable activities, less distant from cash desks, trained for credit management, not married/single, and who use their credit for farming activities are more likely to refund their credit on time. These six factors show significant coefficients in the logit model. However, the six other factors such as the age, gender, farm size, source of finance, loan size, and use of improved technology show insignificant coefficients in the logit model, proving that they have less impact on the defaulter rate of credit beneficiaries. We therefore recommend to the government authorities to give much attention to the significant factors, if microfinance services need to be improved in this region.

English

The Savings and Credit Cooperative Societies (SACCOS) which are co-operative financial models are flourishing in most of the developing economies recently. However, loan repayment capacity remains a challenge that threatens their future. Using financial statements data for the year 2012, from 36 SACCOS in Kilimanjaro Region, Tanzania, and using descriptive statistics and regression models in the analysis, this study examines the relationship between financial performance and loan repayment capacity. It thus examines the extent by which SACCOS are capable of recovering the loan issued and also the financial ratios that explain loan repayment capacity in SACCOS. The study depicts that there is a severe financial risk management problem among Tanzanian SACCOS. Focusing on sustainability is significant for improvements of loan repayment, but focusing on profitability in SACCOS results to an adverse loan repayment. The study asserts that the primary focus of SACCOS should not be profit but member’s wealth maximization and sustainability of the institution. Moreover, we suggest that in addition the traditional means of dealing with financial risk, the uses of a modern risk management tool like credit scoring should be considered in evaluating borrowers. Key words: SACCOS, loan repayment, Tanzania.

Economic and Institutional Elements of Loan Repayment Capacity of Smallholder Farmers in the Transitional Zone of Ghana

Economic and Institutional Elements of Loan Repayment Capacity of Smallholder Farmers in the Transitional Zone of Ghana

Role of self-help groups in rural credit for women empowerment

SHGs are groups of individuals who are below the poverty line are given micro credit for generating income through small income-generating activities. Women empowerment activities must be given importance to eradicate poverty, increase the economic growth and for better standard of living. In view of these presence study has been conducted in Amravati district of Maharashtra state with objectives to study the income expenditure and savings patterns of SHGs members and to recognize the role of SHGs in providing rural credit. Total 150 SHGs members from three tahsils of the district were selected. The data on three agriculture based activities viz., dairy, poultry and vermicompost was collected by personal interview. The study is related to role of self help groups in rural credit. The study concluded that the selected all three agricultural activities helped in increasing income of the SHGs members to the turn of Rs. 5000 per month there by increase expenditure and savings. The SHGs members loan repayment capacity is 80 per cent. SGHs are quite successful in women empowerment in rural areas.

Economic analysis of loan repayment capacity of small-holder cooperative farmers in Yewa North Local Government Area of Ogun State, Nigeria

Farm credits played vital roles in the socio-economic transformation of the rural economies. However, their acquisition and repayment were characterized by numerous challenges including high levels of default among beneficiaries. This study analyzed the smallholder farmers’ loan repayment capacity using household data from 110 cooperative farmers from selected villages in Ogun State, Nigeria. Specifically, the socio-economic and demographic characteristics of respondents, loan repayment rate and factors influencing repayment capacity were examined. Aside from purposive selection of Yewa North, multistage random sampling technique was used to select the study sample. Data were analyzed using descriptive statistics, correlation and regression techniques. Results revealed that the average age of respondents was 45 years with 36% within 20 to 40 years active working population. Average repayment rate was 69% with 42% repaying above nine-tenths, and 20% less than one-half of potential amounts during the period. Loan size (p<0.01) and farm size (p<0.05) had significant positive influences on loan repayment capacity while household size (p<0.05) had a negative influence. From the elasticity analysis, while a 10% increase in loan and farm sizes resulted to 7 and 2.8% increases respectively, similar 10% increase in household size caused 4.2% decrease in repayment capacity. All significant variables produced a priori signs. The implication is that to enhance loan repayment capacity of smallholder cooperative farmers, policies and programmes capable of increasing sizes of loan and farm holdings, or reducing household size should be promoted. However, higher proportional increases were required for each variable to attain a desired level of increase in loan repayment capacity. Key words: Nigeria, cooperatives, farm size, household size, loan size, repayment capacity, repayment rate, smallholder farmers.

La vente en primeur, un substitut au crédit bancaire

This article focuses on the role of “ en primeur” market in financing wine producers facing liquidity problems. “ En primeur” market is a kind of wine forward market specific to the Bordeaux region. It occurs every spring after the grape harvest while the wine is still in barrel. Wine is bottled and delivered one to two years later. A producer’s loan repayment capacity depends on the wine future value i. e. the price of the wine when it is bottled. The existence of an information asymmetry between the banks and the producer about the quality of the wine creates a credit rationing problem in the spirit of Stiglitz and Weiss (1984). To address this issue we propose an adverse selection model whereby a producer needs to raise funds to finance a project. He can apply for a bank loan and/ or sell “ primeur” wine to a trader. The purchase of “ primeur” wine by a trader can also act as a certification mechanism for the future value of the wine. Our analysis shows that when trader’s information is completely revealed, the credit rationing problem is solved. However, because of the nature of the traded good, certification is not robust to collusion between the trader and the producer. Finally, we show that “ en primeur” sales are only used for financing needs after grape harvest.

Financing small rumminant operations along gender lines in Imo State, Nigeria

This study analyzed the distribution of ruminant livestock in Imo state, the gender-perceived production constraints; the relative contributions of these ruminants to the farm household net income and the implications of these contributions to loan repayments if production is assigned on gender basis. Results showed that within the ruminant class of livestock, small ruminants, particularly goats, dominate the others, followed by sheep and then large ruminant, cattle. Their relative contribution to total farm household net income follows the same order. Female gender class was found to rear higher number of the small-ruminant livestock. However, a c2 analysis showed that no significant difference exists in their net farm income from these two classes of livestock. It was concluded that financing of these enterprises on gender basis would not significantly improve the contribution of ruminants to farm household net income and loan repayment capacity. It was recommended, among others, that the constraints imposed by factors such as poor marketing and research systems be addressed in order to translate the relative technical advantage of production of small ruminants by female farmers into financial advantage. (Journal of Agriculture and Social Research: 2003 3(1):13-28)