Determinants of Loan Repayment Performance: A Study on Oromia Credit and Saving Share Company Clients’ in Kersa/Jimma Branch

Abstract

The major objective of this study is to identify the determinants of loan repayment performance in OCSSCO, Kersa/Jimma branch which is found in Serbo town, the capital of Kersa district. To achieve the objective, sample borrowers including both defaulters and non-defaulters were selected using stratified systematic sampling. A sample of 330 was selected using stratified and systematic sampling of 2400 population in the branch from which only 220 of them participated in the study. Interview questionnaire, secondary data and key informant interview were used to collect relevant data for the study. Both descriptive and inferential statistics were used to analyze the collected data. The study found that marital status, ownership of fixed assets, loan diversion, supervision, mode of lending and repayment period were found to significantly affect loan repayment by clients. Therefore, the branch should give due attention to this factors while giving credit.