Microfinance and loan repayment performance: A case study of the Oromia Credit and Savings Share Company (OCSSCO), Ethiopia Cheriye Abebe Bayu Bahir Dar University, College of Business and Economics, Department of Accounting and Finance Online published on 20 June, 2013. Abstract This study was conducted with the aim of analyzing the factors that influence microfinance loan repayment, evaluating the loan rationing mechanism and also assessing the impact of the program on the livelihood of borrowers, using primary data collected through structured questionnaire. The results of the descriptive statistics and the probit model show that education, income, loan supervision, suitability of repayment period, availability of other credit sources and livestock are important and significant factors that enhance the loan repayment performance, while loan diversion and loan size are found to significantly increase loan default. In addition female borrowers were found better in terms of loan repayment. The credit scheme was also found to have positive impact in improving the income, education, health and nutritional status of the borrowers as evidenced by the Wilcoxon test that compares the situations before and after participation in the credit scheme. Top Keywords microfinance, loan repayment performance, loan diversion, loan rationing, impact, creditworthy. Top |