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Risk Factors of Loan Default Payment in Ghana: A case study of Akuapem Rural Bank

Samuel Antwi (), Ebenezer Fiifi Emire Atta Mills (), Gifty Atta Mills () and Xicang Zhao ()
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Samuel Antwi: Jiangsu University
Ebenezer Fiifi Emire Atta Mills: Jiangsu University
Gifty Atta Mills: Jiangsu University
Xicang Zhao: Jiangsu University

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2012, vol. 2, issue 4, 376-386

Abstract: This study seeks to determine some risk factors that influence loan default repayment among customers in Akuapem rural bank. Secondary data on some variables which influence customer loan default was obtained from the credit department of Akuapem rural bank. Data was collected for the period 2006 to 2010. A logistic regression model was fitted to the data. It was found that among the variables that were used, Security and Type of Loan were significant to the study whereas Sex, Marital Status, Age, Educational Level, Town were not significant to the study. We conclude that there is a high risk of customers who use personal guarantee to default than those who use collateral as a security in accessing the loan. Taking transport loan as a reference group, the risks of a customer defaulting when given a personal loan is less than when given a transport loan, all other factors being equal.

Keywords: Loan default; logistic regression; Risk; Akuapem rural bank (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2012
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