Determinants of Loan Repayment in Small Scale Enterprises in Developing Countries

Document Type: Research Paper


1 Research Consultant and Academic, Cape Town, South Africa

2 University of Fort –Hare Alice, South Africa and Visiting Professor University of Lusaka, Zambia


This study was conducted with the objective of identifying the major determinants of loan repayment in Small Scale Enterprises (SSEs) with particular reference to SSEs in one of Kenya’s most dynamic informal business hub, Kariobangi Division in Nairobi. In order to achieve this objective, primarily data were collected from 50 randomly selected respondents by using questionnaires. Descriptive statistics were used to analyze data on the socio-economic characteristics of the borrowers. The study found that personal characteristics such as education level, family size, amount of loan applied and business experience of the respondents have a positive relationship to loan repayment. Age, interest rate and change in gender had an inverse relationship to loan repayment.


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