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Factors affecting repayment performance in microfinance programs in Malaysia

This paper attempts to determine the factors affecting repayment performance in microfinance programs in Malaysia by using a multinomial logit regression model.The data used in this study is gathered through a survey on 309 respondents of TEKUN Nasional clients in Peninsular Malaysia. Results of the...

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Main Authors: Nawai, Norhaziah, Mohd Shariff, Mohd Noor
Format: Article
Language:English
Published: Elsevier 2012
Subjects:
HG Finance
Online Access:http://repo.uum.edu.my/18082/1/Procedia%20-%20SBS%2062%20%202012%20%20806%20%E2%80%93%20811.pdf
http://repo.uum.edu.my/18082/
http://doi.org/10.1016/j.sbspro.2012.09.136
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spelling my.uum.repo.180822016-06-07T07:49:27Z http://repo.uum.edu.my/18082/ Factors affecting repayment performance in microfinance programs in Malaysia Nawai, Norhaziah Mohd Shariff, Mohd Noor HG Finance This paper attempts to determine the factors affecting repayment performance in microfinance programs in Malaysia by using a multinomial logit regression model.The data used in this study is gathered through a survey on 309 respondents of TEKUN Nasional clients in Peninsular Malaysia. Results of the study indicate that gender, formal religious education, distance to the lender office, business formality, total sales per month, total loan received, loan monitoring and loan disbursement lag have significantly affected borrower's repayment performance.The result also shows that no pressure from Microfinance Institutions to pay the loan may cause the clients delayed their payment or just pay at a minimum amount. Besides, 11 percent of responden ts also admitted that they not fully utilised the loan given for business that makes them finally default. The study suggests rebate should be given to the good borrowers to encourage them to repay their loan on schedule without delay and the establishment o f a formal specialized microfinance banking institution to cater for the financial needs of micro and small entrepreneurs, especially in Malaysia. Elsevier 2012 Article PeerReviewed application/pdf en cc_by http://repo.uum.edu.my/18082/1/Procedia%20-%20SBS%2062%20%202012%20%20806%20%E2%80%93%20811.pdf Nawai, Norhaziah and Mohd Shariff, Mohd Noor (2012) Factors affecting repayment performance in microfinance programs in Malaysia. Procedia - Social and Behavioral Sciences, 62. pp. 806-811. ISSN 18770428 http://doi.org/10.1016/j.sbspro.2012.09.136 doi:10.1016/j.sbspro.2012.09.136
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HG Finance
spellingShingle HG Finance
Nawai, Norhaziah
Mohd Shariff, Mohd Noor
Factors affecting repayment performance in microfinance programs in Malaysia
description This paper attempts to determine the factors affecting repayment performance in microfinance programs in Malaysia by using a multinomial logit regression model.The data used in this study is gathered through a survey on 309 respondents of TEKUN Nasional clients in Peninsular Malaysia. Results of the study indicate that gender, formal religious education, distance to the lender office, business formality, total sales per month, total loan received, loan monitoring and loan disbursement lag have significantly affected borrower's repayment performance.The result also shows that no pressure from Microfinance Institutions to pay the loan may cause the clients delayed their payment or just pay at a minimum amount. Besides, 11 percent of responden ts also admitted that they not fully utilised the loan given for business that makes them finally default. The study suggests rebate should be given to the good borrowers to encourage them to repay their loan on schedule without delay and the establishment o f a formal specialized microfinance banking institution to cater for the financial needs of micro and small entrepreneurs, especially in Malaysia.
format Article
author Nawai, Norhaziah
Mohd Shariff, Mohd Noor
author_facet Nawai, Norhaziah
Mohd Shariff, Mohd Noor
author_sort Nawai, Norhaziah
title Factors affecting repayment performance in microfinance programs in Malaysia
title_short Factors affecting repayment performance in microfinance programs in Malaysia
title_full Factors affecting repayment performance in microfinance programs in Malaysia
title_fullStr Factors affecting repayment performance in microfinance programs in Malaysia
title_full_unstemmed Factors affecting repayment performance in microfinance programs in Malaysia
title_sort factors affecting repayment performance in microfinance programs in malaysia
publisher Elsevier
publishDate 2012
url http://repo.uum.edu.my/18082/1/Procedia%20-%20SBS%2062%20%202012%20%20806%20%E2%80%93%20811.pdf
http://repo.uum.edu.my/18082/
http://doi.org/10.1016/j.sbspro.2012.09.136
_version_ 1644282377262858240
score 13.211869

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