Loan Repayment Performance of Awash Saving and Credit Cooperatives Union, Oromia Regional State, Ethiopia

Abstract

This study aimed to assess loan repayment performance of Awash saving and credit cooperatives union, Oromia regional state, Ethiopia. This study is delimited to loan repayment performance and loan repayment trends of Awash saving and credit cooperative union of the last ten consecutive years (2010-2019 GC). Descriptive research design was used in this study. Moreover, both quantitative and qualitative research approaches were used for triangulation purpose. Both primary and secondary data were used to address the desired research objectives. Primary data were collected through focus group discussion (FGD) and key informant interviews (KII). Whereas secondary data were obtained from annual audited financial statement of the union. The collected data were analyzed using both descriptive and linear regression analysis accordingly. The study result indicates that, though the loan performance of the union improving year after year in the study period, disparity of the amount loan planned, amount distributed and amount collected becoming wider and wider starting from 2015 G.C. Moreover, the researchers conclude that, institutional factors (lack of qualified and adequate man power) members’ factors (lack of business know how and low income) and external factors (political instability) are major hindering factors that are affecting loan repayment performance of the members. To overcome these problems, adequate and competent cooperative professional employee should be recruited for loan supervision and collections and regular training should be given for the members on credit usage and repayment.