Factors affecting repayment performance in microfinance programs in Malaysia

• 主要作者: Norhaziah, Nawai,
• 格式: Conference Paper
• 语言: en_US
• 出版: Elsevier Science Bv 2015
• 主题: repayment performance; microfinance programs; Malaysia
• 在线阅读: http://ddms.usim.edu.my/handle/123456789/8950

This paper attempts to determine the factors affecting repayment performance in microfinance programs in Malaysia by using a multinomial logit regression model. The data used in this study is gathered through a survey on 309 respondents of TEKUN Nasional clients in Peninsular Malaysia. Results of the study indicate that gender, formal religious education, distance to the lender office, business formality, total sales per month, total loan received, loan monitoring and loan disbursement lag have significantly affected borrower's repayment performance. The result also shows that no pressure from Microfinance Institutions to pay the loan may cause the clients delayed their payment or just pay at a minimum amount. Besides, 11 percent of respondents also admitted that they not fully utilised the loan given for business that makes them finally default. The study suggests rebate should be given to the good borrowers to encourage them to repay their loan on schedule without delay and the establishment of a formal specialized microfinance banking institution to cater for the financial needs of micro and small entrepreneurs, especially in Malaysia. (C) 2012 Published by Elsevier Ltd. Selection and/or peer review under responsibility of Prof. Dr. Huseyin Arasli