Loan Defaults In Microfinance Institutions - A Study

The study was carried out in Nekemete, oromia, Ethiopia. The issue of loan delinquency or default among Microfinance Institutions has been discussed in many finance professionals and that is one of the reasons why commercial banks have not shown much interest in financing Micro, Small and Medium Enterprises (MSMEs). However, to the knowledge of the researcher, it appears that there is no research conducted towards the causes for loan default in Wasasa Micro Finance Institution so far in Nekemete context. Hence, the overall objective of this was to assess the causes for loan default in Wasasa Micro Finance Institution Nekemete Branch. In addition, this research narrowed the existing gap by evaluating empirically the cause for loan default Wasasa Micro Finance Institution Nekemete. The study used both quantitative and qualitative (mixed) approach. The study employed descriptive, explanatory, and Survey research design. In order to collect the data the study was used self-administered questionnaire, likert scale, and in-depth interview. To analyze the data the study was used SPSS V.16 and stata.9. Moreover, it employed logistic regression and descriptive statistics.