DETERMINANTS OF LOAN REPAYMENT IN COMMERCIAL BANK OF ETHIOPIA: EVIDENCE FROM SILTE ZONE, SELECTED BANK BRANCHES

Abstract Banking industries play a major part within the financial development of a nation, but poor<br> repayment practices of Borrowers remain major challenges of their financial performance.<br> The purpose of this study is to investigate the Determinants of loan repayments on<br> Commercial Bank of Ethiopia CBE (Evidence from Silte zone). In fact, identifying and analyzing<br> such determining factors of loan repayment rate is vital in the achievement of profitability and<br> sustainability of CBE. The study used both descriptive and explanatory research design with a<br> Quantitative approach. As Silte zone, Total Target population consists of the 2960<br> borrowers; However, for this research from total population of 2960 borrowers, 296 (10%) sample<br> respondents were selected through using the purposively sampling technique. In this connection,<br> researchers’ collect a primary sources of data from sampled 296 Borrowers (as respondents); by using<br> Questionnaires. And for analyzing, Binary logistic model was used. Through the study 14 determinants’<br> are selected for evaluation, out of which 9 variables are significant and remaining insignificant are<br> found. As a whole, the model successfully predicted factors contributing to 89.9% of loan repayment<br> problem among CBE. Based on the analysis, the studies recommend that proper training should be<br> provided, reasonable amount of loan which should be useful to their business. Further, more age<br> people and well business experience people can able to repay their loan amount` timely to micro<br> finance institution.