Review of Literature on Determinants of Loan Repayment Performance in Microfinance Institutions

Kiran K; Sureshramana Mayya

doi:10.36948/ijfmr.2024.v06i04.24399

Review of Literature on Determinants of Loan Repayment Performance in Microfinance Institutions

Author(s)	Kiran K, Sureshramana Mayya
Country	India
Abstract	This article presents a comprehensive literature review on the determinants of loan repayment performance in microfinance institutions (MFIs). The review aims to enhance the understanding of borrower behaviour regarding loan repayment, focusing on socio-economic, institutional, and motivational factors. It synthesises findings from various studies, including the Indian Institute for Mother and Child (IIMC), a nonprofit Indian MFI, to identify critical determinants influencing borrowers' ability to repay loans. Factors such as income stability, education level, financial literacy, and family size are highlighted as significant socio-economic determinants. Loan-specific factors, including loan size, repayment period, and supervision, are also critical. Institutional practices like credit assessment techniques, loan structuring, and technological adoption are examined alongside social factors such as peer pressure, social cohesiveness, and community support systems. Additionally, the review explores borrowers' motivation for taking out additional loans, finding that the drive to reach the maximum loan level positively impacts repayment performance. Empirical evidence suggests that repayment rates increase as borrowers approach their loan limits. The article concludes with recommendations for MFIs to improve their operational strategies by addressing these determinants, thereby enhancing loan repayment rates and contributing to the sustainability and effectiveness of microfinance programs.
Keywords	Microfinance Institutions (MFIs), loan repayment performance, financial literacy, socio-economic determinants, borrower behaviour, sustainability
Published In	Volume 6, Issue 4, July-August 2024
Published On	2024-07-10
Cite This	Review of Literature on Determinants of Loan Repayment Performance in Microfinance Institutions - Kiran K, Sureshramana Mayya - IJFMR Volume 6, Issue 4, July-August 2024. DOI 10.36948/ijfmr.2024.v06i04.24399
DOI	https://doi.org/10.36948/ijfmr.2024.v06i04.24399
Short DOI	https://doi.org/gt4gkr

View / Download PDF File

E-ISSN 2582-2160

doi

CrossRef DOI is assigned to each research paper published in our journal.

IJFMR DOI prefix is
10.36948/ijfmr

Downloads

Research Paper Format Copyright Permission Form and Undertaking Form Cover Page Vol 6 Isu 6 Cover Page Vol 6 Isu 5 Cover Page Vol 6 Isu 4

All research papers published on this website are licensed under Creative Commons Attribution-ShareAlike 4.0 International License, and all rights belong to their respective authors/researchers.

CC-BY-SA

About IJFMR Fees & Payment Current Issue Publication Archive	Submit Research Paper Track Submission Status Publication Guidelines Publication Ethics Peer Review & Plagiarism	Join as a Reviewer Editors & Reviewers Reviewer Referral Program Get Reviewer Membership Certi.	Website/Journal Policies Usage Policy Content Policies Privacy Policy

Contact Us		+91-9898-5948-55	editor@ijfmr.com

International Journal For Multidisciplinary Research

A Widely Indexed Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

Review of Literature on Determinants of Loan Repayment Performance in Microfinance Institutions

Share this