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An Exploratory Study on the Factors Contributing Loan Repayment Default among the Loan Borrowers in Micro Finance Institutions in Shah Alam, Selangor

Author

Listed:
  • Uma Murthy
  • Paul Anthony Mariadas

Abstract

This research is carried out to discover the factors contributing to loan repayment default in micro finance institutions based in Shah Alam, Selangor, Malaysia. The findings will be useful for the micro finance institutions in Malaysia in selecting and implementing suitable policies to reduce defaults. In this research, data is collected through questionnaires. These questionnaires are distributed to 120 loan borrowers of micro finance institution in Shah Alam, Selangor. Furthermore, the data was analyzed with the software known as Statistical package for Social Science, for short SPSS. This study established that nature of business operated by loan borrowers is one of the factors that will influence loan repayment. Finding of this study are established that there is a positive relationship between nature of business operation and negative relationship between age of borrowers, diversion of funds by borrowers as well as repayment schedule to loan defaults.

Suggested Citation

  • Uma Murthy & Paul Anthony Mariadas, 2017. "An Exploratory Study on the Factors Contributing Loan Repayment Default among the Loan Borrowers in Micro Finance Institutions in Shah Alam, Selangor," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(12), pages 242-242, November.
    • Handle: RePEc:ibn:ijbmjn:v:12:y:2017:i:12:p:242
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    References listed on IDEAS

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    Cited by:

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    3. M. A. Zariyawati & M. T. Hirnissa & K. A. Muhammad-Mujb, 2023. "Determinant Factors of Non-Performing Loan among Non-Bank Financial Intermediaries in Malaysia," International Journal of Business and Management, Canadian Center of Science and Education, vol. 16(8), pages 1-48, February.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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