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Determinants Of Loan Repayment Performance In Microcredit Institutions: Evidence From Tanzania, Abel A. Kinyondo, Nathan Okurut

Abel Alfred Kinyondo

This study investigated the key factors that influence loan repayment performance among group clients of microcredit institutions (MFIs) in Tanzania. This was motivated by the fact that sustainability of MFIs is critical for poverty reduction among the poor through sustainable access to credit. Sustainability of microcredit institutions is greatly influenced by the loan repayment performance of their clients. High repayment rates enable MFIs to recover interest income and minimize loan losses which enhance profits. In turn, these profits enhance the capital base which enables microcredit institutions to increase their outreach and reduce their dependence on donors. The study was based …