Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia

Yonas Shuke Kitawa; Nigatu Degu Terye

doi:doi:10.11648/j.ajtas.20150406.28

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Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia

Yonas Shuke Kitawa, Nigatu Degu Terye

Published in American Journal of Theoretical and Applied Statistics (Volume 4, Issue 6)

Received: 10 September 2015 Accepted: 7 October 2015 Published: 26 November 2015

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Abstract

The major objective of this study is to study factors affecting loan repayment efficiency of borrowers and assess impact of efficient utilization of loan for the borrowers in Hawassa city in Ethiopia. Data used for this study was collected through a structured questionnaire. Classical and Bayesian logistic regression technique were used for data analysis. Factor analysis was used to reduce data and to incorporate the major determinants that the efficient utilization of loan have to the borrowers, whereas logistic regression is used to obtained factors affecting loan repayment performance of borrowers and it was extended to the Bayesian frame work using prior information that the parameter follows. Results of the classical binary logistic regression indicate that better repayment efficiency is associated with borrowers: sex, educational status, number of dependent family member, monthly income, loan size, additional source of income, motivation of repayment, time given for repayment, interest rate and screening mechanism when individuals apply for the loan. Also by using Bayesian logistic regression age, loan type, using loan for intended purpose and experience are significant in addition to significant predictors in classical logistic regression. From factor analysis, 27 factor used for impact assessment in which all the factor loaded highly in 7 significant factors like:-Benefit and obstacle related factor, capital effect, saving habit, expenditure, government spending, satisfaction level on the service and consumption change that has been seen after using loan. Thus, in order to improve repayment performance of borrowers, increasing loan size, training and giving some incentive in business areas, increasing awareness in different ways and studying factors which has significant impact on borrowers creditworthiness and giving solution to reduce that problems must be improved.

Published in	American Journal of Theoretical and Applied Statistics (Volume 4, Issue 6)
DOI	10.11648/j.ajtas.20150406.28
Page(s)	562-575
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Loan Repayment Efficiency, Loan Impact, SMFI, Logistic Regression, Bayesian Logistic Regression, Multivariate Factor Analysis, Hawassa

References

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APA Style

Yonas Shuke Kitawa, Nigatu Degu Terye. (2015). Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia. American Journal of Theoretical and Applied Statistics, 4(6), 562-575. https://doi.org/10.11648/j.ajtas.20150406.28

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ACS Style

Yonas Shuke Kitawa; Nigatu Degu Terye. Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia. Am. J. Theor. Appl. Stat. 2015, 4(6), 562-575. doi: 10.11648/j.ajtas.20150406.28

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AMA Style

Yonas Shuke Kitawa, Nigatu Degu Terye. Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia. Am J Theor Appl Stat. 2015;4(6):562-575. doi: 10.11648/j.ajtas.20150406.28

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@article{10.11648/j.ajtas.20150406.28,
  author = {Yonas Shuke Kitawa and Nigatu Degu Terye},
  title = {Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia},
  journal = {American Journal of Theoretical and Applied Statistics},
  volume = {4},
  number = {6},
  pages = {562-575},
  doi = {10.11648/j.ajtas.20150406.28},
  url = {https://doi.org/10.11648/j.ajtas.20150406.28},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtas.20150406.28},
  abstract = {The major objective of this study is to study factors affecting loan repayment efficiency of borrowers and assess impact of efficient utilization of loan for the borrowers in Hawassa city in Ethiopia. Data used for this study was collected through a structured questionnaire. Classical and Bayesian logistic regression technique were used for data analysis. Factor analysis was used to reduce data and to incorporate the major determinants that the efficient utilization of loan have to the borrowers, whereas logistic regression is used to obtained factors affecting loan repayment performance of borrowers and it was extended to the Bayesian frame work using prior information that the parameter follows. Results of the classical binary logistic regression indicate that better repayment efficiency is associated with borrowers: sex, educational status, number of dependent family member, monthly income, loan size, additional source of income, motivation of repayment, time given for repayment, interest rate and screening mechanism when individuals apply for the loan. Also by using Bayesian logistic regression age, loan type, using loan for intended purpose and experience are significant in addition to significant predictors in classical logistic regression. From factor analysis, 27 factor used for impact assessment in which all the factor loaded highly in 7 significant factors like:-Benefit and obstacle related factor, capital effect, saving habit, expenditure, government spending, satisfaction level on the service and consumption change that has been seen after using loan. Thus, in order to improve repayment performance of borrowers, increasing loan size, training and giving some incentive in business areas, increasing awareness in different ways and studying factors which has significant impact on borrowers creditworthiness and giving solution to reduce that problems must be improved.},
 year = {2015}
}

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TY  - JOUR
T1  - Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia
AU  - Yonas Shuke Kitawa
AU  - Nigatu Degu Terye
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DO  - 10.11648/j.ajtas.20150406.28
T2  - American Journal of Theoretical and Applied Statistics
JF  - American Journal of Theoretical and Applied Statistics
JO  - American Journal of Theoretical and Applied Statistics
SP  - 562
EP  - 575
PB  - Science Publishing Group
SN  - 2326-9006
UR  - https://doi.org/10.11648/j.ajtas.20150406.28
AB  - The major objective of this study is to study factors affecting loan repayment efficiency of borrowers and assess impact of efficient utilization of loan for the borrowers in Hawassa city in Ethiopia. Data used for this study was collected through a structured questionnaire. Classical and Bayesian logistic regression technique were used for data analysis. Factor analysis was used to reduce data and to incorporate the major determinants that the efficient utilization of loan have to the borrowers, whereas logistic regression is used to obtained factors affecting loan repayment performance of borrowers and it was extended to the Bayesian frame work using prior information that the parameter follows. Results of the classical binary logistic regression indicate that better repayment efficiency is associated with borrowers: sex, educational status, number of dependent family member, monthly income, loan size, additional source of income, motivation of repayment, time given for repayment, interest rate and screening mechanism when individuals apply for the loan. Also by using Bayesian logistic regression age, loan type, using loan for intended purpose and experience are significant in addition to significant predictors in classical logistic regression. From factor analysis, 27 factor used for impact assessment in which all the factor loaded highly in 7 significant factors like:-Benefit and obstacle related factor, capital effect, saving habit, expenditure, government spending, satisfaction level on the service and consumption change that has been seen after using loan. Thus, in order to improve repayment performance of borrowers, increasing loan size, training and giving some incentive in business areas, increasing awareness in different ways and studying factors which has significant impact on borrowers creditworthiness and giving solution to reduce that problems must be improved.
VL  - 4
IS  - 6
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Author Information

Yonas Shuke Kitawa

Department of Statistics, Hawassa University, Hawassa, Ethiopia
Nigatu Degu Terye

Department of Statistics, Hawassa University, Hawassa, Ethiopia

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APA Style

Yonas Shuke Kitawa, Nigatu Degu Terye. (2015). Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia. American Journal of Theoretical and Applied Statistics, 4(6), 562-575. https://doi.org/10.11648/j.ajtas.20150406.28

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ACS Style

Yonas Shuke Kitawa; Nigatu Degu Terye. Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia. Am. J. Theor. Appl. Stat. 2015, 4(6), 562-575. doi: 10.11648/j.ajtas.20150406.28

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AMA Style

Yonas Shuke Kitawa, Nigatu Degu Terye. Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia. Am J Theor Appl Stat. 2015;4(6):562-575. doi: 10.11648/j.ajtas.20150406.28

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@article{10.11648/j.ajtas.20150406.28,
  author = {Yonas Shuke Kitawa and Nigatu Degu Terye},
  title = {Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia},
  journal = {American Journal of Theoretical and Applied Statistics},
  volume = {4},
  number = {6},
  pages = {562-575},
  doi = {10.11648/j.ajtas.20150406.28},
  url = {https://doi.org/10.11648/j.ajtas.20150406.28},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtas.20150406.28},
  abstract = {The major objective of this study is to study factors affecting loan repayment efficiency of borrowers and assess impact of efficient utilization of loan for the borrowers in Hawassa city in Ethiopia. Data used for this study was collected through a structured questionnaire. Classical and Bayesian logistic regression technique were used for data analysis. Factor analysis was used to reduce data and to incorporate the major determinants that the efficient utilization of loan have to the borrowers, whereas logistic regression is used to obtained factors affecting loan repayment performance of borrowers and it was extended to the Bayesian frame work using prior information that the parameter follows. Results of the classical binary logistic regression indicate that better repayment efficiency is associated with borrowers: sex, educational status, number of dependent family member, monthly income, loan size, additional source of income, motivation of repayment, time given for repayment, interest rate and screening mechanism when individuals apply for the loan. Also by using Bayesian logistic regression age, loan type, using loan for intended purpose and experience are significant in addition to significant predictors in classical logistic regression. From factor analysis, 27 factor used for impact assessment in which all the factor loaded highly in 7 significant factors like:-Benefit and obstacle related factor, capital effect, saving habit, expenditure, government spending, satisfaction level on the service and consumption change that has been seen after using loan. Thus, in order to improve repayment performance of borrowers, increasing loan size, training and giving some incentive in business areas, increasing awareness in different ways and studying factors which has significant impact on borrowers creditworthiness and giving solution to reduce that problems must be improved.},
 year = {2015}
}

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TY  - JOUR
T1  - Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia
AU  - Yonas Shuke Kitawa
AU  - Nigatu Degu Terye
Y1  - 2015/11/26
PY  - 2015
N1  - https://doi.org/10.11648/j.ajtas.20150406.28
DO  - 10.11648/j.ajtas.20150406.28
T2  - American Journal of Theoretical and Applied Statistics
JF  - American Journal of Theoretical and Applied Statistics
JO  - American Journal of Theoretical and Applied Statistics
SP  - 562
EP  - 575
PB  - Science Publishing Group
SN  - 2326-9006
UR  - https://doi.org/10.11648/j.ajtas.20150406.28
AB  - The major objective of this study is to study factors affecting loan repayment efficiency of borrowers and assess impact of efficient utilization of loan for the borrowers in Hawassa city in Ethiopia. Data used for this study was collected through a structured questionnaire. Classical and Bayesian logistic regression technique were used for data analysis. Factor analysis was used to reduce data and to incorporate the major determinants that the efficient utilization of loan have to the borrowers, whereas logistic regression is used to obtained factors affecting loan repayment performance of borrowers and it was extended to the Bayesian frame work using prior information that the parameter follows. Results of the classical binary logistic regression indicate that better repayment efficiency is associated with borrowers: sex, educational status, number of dependent family member, monthly income, loan size, additional source of income, motivation of repayment, time given for repayment, interest rate and screening mechanism when individuals apply for the loan. Also by using Bayesian logistic regression age, loan type, using loan for intended purpose and experience are significant in addition to significant predictors in classical logistic regression. From factor analysis, 27 factor used for impact assessment in which all the factor loaded highly in 7 significant factors like:-Benefit and obstacle related factor, capital effect, saving habit, expenditure, government spending, satisfaction level on the service and consumption change that has been seen after using loan. Thus, in order to improve repayment performance of borrowers, increasing loan size, training and giving some incentive in business areas, increasing awareness in different ways and studying factors which has significant impact on borrowers creditworthiness and giving solution to reduce that problems must be improved.
VL  - 4
IS  - 6
ER  -

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