Borrowers’ Characteristics, Credit Terms and Loan Repayment among Clients of MFI’s

Abstract

The purpose of this study was to establish the relationship between borrowers’ characteristics, credit terms and loan repayment amount clients of MFIs in Luwero District Kampala Simple random sampling was used to select a sample of 24 SACCOs from Luwero district of which a sample of 266 respondents were purposively selected from these SACCOs. A cross sectional research design was adopted which involved descriptive, correlation, factor analysis and regression approaches. Data were analyzed through SPSS.Results indicated that there was no significant relationship between borrowers’ characteristics and loan repayment while the relationship between credit terms and loan repayment was significant. Results from the regression analysis showed that borrowers’ characteristics and credit terms significantly predicted 16.2% of loan repayment. The study is relevant in that various business owners who borrow money, will help them revisit the loan taking decision and also to evaluate the loans before taking up the loan. The results will help them to use the loans more effectively.it will also help the MFI loan officers to analyze their borrowers, supervise the loans and repayment that would make them maintain their customers as well as the business sustain ability and the sustainability of the MFI.