Factors affecting loan repayment by women entrepreneurs in rural communities. A case of Women Development Fund Support in Midlands Province (2010-2018)
MetadataShow full item record
This paper presents a study of the factors affecting loan repayment by women entrepreneurs in rural communities. The use of credit has been envisaged as one way of promoting women entrepreneurs in Zimbabwe to effectively increase their production. To have a financial institutions which are viable, loan repayment is of paramount importance. The Ministry of Women Affairs, Gender and Community Development extended credit facilities to the marginalized women entrepreneurs in rural arears through POSB for the improvement of inputs that will increase production and productivity. However, there is a serious loan repayment problem in Midlands Province which is now discouraging the Ministry to keep on extending credit. The government recorded a 45% arrear ratio that means it is being owed more than USD1 million, therefore, the objectives of this study is to assess the impact of procedures used to identify those who are creditworthy, to determine the extent to which lenders and borrowers factors affect loan repayment and to determine the macroeconomic factors affecting loan repayment among women entrepreneurs in rural communities. The researcher used descriptive research design and a sample size of 39 respondents was drawn which consisted of POSB account relationship manager, loans officers and the customers. Data was collected using self-administered questionnaires. Excel was used to analyze the data and statistical description techniques were also used in data presentation such as tables, graphs and charts. The findings reviewed that borrower’s character, loan duration, poor credit analysis, location, value of collateral security, age, level of education, inflation and interest rates were the major causes of non-performing loans. The study recommends that there is need for effective credit risk management, loan portfolio diversification, training and support as well as the use of perking order theory.