Determinants of microcredit loans repayment problem among microfinance borrowers in Malaysia

Authors

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

DOI:

https://doi.org/10.18533/ijbsr.v2i7.118

Keywords:

microcredit, loan repayment problems, subsidised microfinance institution, logistic regression, Malaysia.

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.

 

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Issue

Vol. 2 No. 7 (2012): December

Section

Article

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