Determinants of microcredit loans repayment problem among microfinance borrowers in Malaysia

Suraya Hanim Mokhtar, Gilbert Nartea and Christopher Gan
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Suraya Hanim Mokhtar: Lecturer, Department of Social Science,Faculty of Agriculture and Food Sciences,Universiti Putra Malaysia
Christopher Gan: Associate Professor, Faculty of Commerce,Department of Accounting, Economics and Finance,Lincoln University, Canterbury, New Zealand

International Journal of Business and Social Research, 2012, vol. 2, issue 7, 33-45

Abstract: Microfinance has been widely accepted as a policy option for alleviating poverty. However, microfinance institution often facing loan repayment problem. Loan default or lower loan collection can be caused by borrowers’ themselves or unfavourable loan product’s characteristics designed by the microfinance institutions. This paper investigates the determinants of loan repayment problems among microfinance borrowers in TEKUN and YUM institutions in Malaysia. By using logistic regression model, the empirical results showed borrower’s characteristic (age, gender and type of business involved) and microcredit loan’s characteristics (mode of repayment, repayment amount) are among the factors contribute to microcredit loan repayment problem among TEKUN and YUM borrowers in Malaysia.

Keywords: microcredit; loan repayment problems; subsidised microfinance institution; logistic regression; Malaysia. (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:mir:mirbus:v:2:y:2012:i:7:p:33-45

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