Factors Affecting Repayment of Loans by Micro-Borrowers in Tunisia: An Empirical Study

Content Provider	Semantic Scholar
Author	Zohair, Mighri
Copyright Year	2013
Abstract	(ProQuest: ... denotes formulae omitted.)The problems of lack of reimbursement on the side of micro-borrowers and the formulation of hypothesesThe theoretical literature shows that, the microfinance is a tool to eradicate poverty. This discipline made proof, through various approaches, of its capacity to provide financial services for populations excluded from traditional finance (Vincent, 2005). However, Microfinance provides examples of successes but remains also distinguished by certain cases of bankruptcies, (Sharma and Zeller., 19971). In fact, the evaluation of the situation of refunding of the micro-borrowers passes by the evaluation of their particular characteristics which influence the probability of realization of a lack of reimbursement (M. Jonathan, 1999).The objective of this paragraph is to identify the influence of the factors related to the particular characteristics of the micro-borrowers on the lack of reimbursement. Then, it is necessary through this work to stop on this idea and to examine the explanatory factors of the lack of reimbursement of the micro-borrowers. Indeed, many empirical researches found a relation between several variables characterizing the micro-borrowers with the lack of reimbursement. This makes it possible to put the characteristics of the micro-borrowers at the center of attempt in our research. Therefore, it is important to categorize the micro- borrowers according to the factors affecting refunding and to define a standard profile of solvent micro-borrowers.Thus, while wondering about the influence of the particular characteristics related to the micro-borrowers on the probability of the lack of reimbursement, consulted research show that they interact differently according to the area and the person. For that, the field of research suggests a classification of research according to the demography, professional experience or the socio-economic origin. At this level, Zghal (2004) proposes an application of research to specific groups of micro-borrowers. The specification of a group is done according to a whole of characteristics such as age, gender, formation, location, marital status, branch of industry, nature of the project, number of dependent children, the amount of loan etc...In its structure, the lack of reimbursement is bad for the microfinance institution as for the micro-borrower. It is a phenomenon to be avoided, (Elizabeth Littlefield and Rosenberg, 2004). For this reason, many studies continue to concentrate on the factors which influence such a defect, (Shaw. J., 2004).Problems involved in the socio-economic characteristics of the micro-borrowersIn what follows, we base ourselves on the follow-up of the micro-projects, geographical area, amount of the loan , branch of the industry, nature of the project and the distance between the institution and the residence of customer as crucial factors of the socio-economic characteristics being able to condition the defect of refunding.The follow-up of the micro-projects: Honlonkou and al. (2001), Khandker (1998), Meehan (2000) have leads to the results according to which the lack of follow-up of the financed projects, inappropriate periods of withdrawal, diversion of the appropriations to the consumption or the refunding of the usurers and the perception of the public financing called "cold money" are all assimilated as a deciding factors of a lack of reimbursement of the microcredit. Moreover, Honlonkou and al. (2006)2, Morduch et al. (2002) also showed that, the frequent visits of the personnel of the microfinance institution had a positive impact on refunding. By opposition, Zeller and Meyer (2002) and Maria Nowak (2005), find that the visits of the personnel of the microfinance institution could involve a rise in the costs of transaction. Consequently, the latter think that, the rise in the costs of transaction is connected to the costs of transport, and it will have a negative impact on the rates of refunding. …
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Ending Page	4
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Volume Number	4
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Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article