THE EFFECT OF INTEREST RATES ON LOAN REPAYMENT IN MICROFINANCE BANK IN ASABA DELTA STATE (A CASE STUDY OF AMJU MICROFINANCE BANK LIMITED ASABA).
Abstract
ABSTRACT
This research work investigated the effect of interest rates on loan repayment in microfinance bank in Asaba Delta State (A case study of Amju Microfinance bank limited Asaba). Data were collected through questionnaires and interviews, sampling 100 customers and 20 employees. The major source of collecting data for this research work was the primary and secondary sources.
The findings reveal that while interest rates significantly impact loan repayment, other factors such as loan terms and repayment frequency, also play crucial roles. Customers indicated that although lower interest rates would enhance repayment, the accessibility and availability of funds were paramount.
To improve loan repayment, the study recommends reducing interest rates to alleviate the repayment burden and ensuring loans are within amounts that customers can feasibly service. Additionally, the introduction of micro-insurance is suggested to protect both the institution and customers against defaults.
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