On the predictors of loan utilization and delinquency among microfinance borrowers in Zimbabwe: A Poisson regression approach
Microfinance institutions (MFIs) are a prominent financial inclusion initiative in many developing countries. In Zimbabwe, however, less is known about microfinance borrowers, determinants of loan utilisation and borrowers’ repayment behaviour. Demonstrating that MFIs serve those who are economicall...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2022-12-01
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| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2022.2111799 |
| _version_ | 1811215128884936704 |
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| author | Richard Chamboko Sevias Guvuriro |
| author_facet | Richard Chamboko Sevias Guvuriro |
| author_sort | Richard Chamboko |
| collection | DOAJ |
| description | Microfinance institutions (MFIs) are a prominent financial inclusion initiative in many developing countries. In Zimbabwe, however, less is known about microfinance borrowers, determinants of loan utilisation and borrowers’ repayment behaviour. Demonstrating that MFIs serve those who are economically marginalised and traditionally excluded from the formal financial system is useful in a country where most of the economic activities are in the informal sector. This study investigated the factors associated with the utilisation of microfinance loans and delinquency among microfinance borrowers using the Poisson, logit and the zero-truncated Poisson regression models on 6165 unique borrowers in Zimbabwe. The study findings revealed that microfinance loans were significantly more likely to be accessed by low-income individuals, who took small loans with relatively high instalments. Women were less likely to access microfinance loans, and reliable borrowers were more likely to access repeat loans. The level of income, number of previous loans and loan terms explained the delinquency among borrowers. Largely, the findings suggest that microfinance in Zimbabwe serves the needs of the low-income group. However, policies that seek to improve access to credit for women and youth remain a priority. |
| first_indexed | 2024-04-12T06:16:10Z |
| format | Article |
| id | doaj.art-8ba1b455748f4320b60ffaee421fdb70 |
| institution | Directory Open Access Journal |
| issn | 2332-2039 |
| language | English |
| last_indexed | 2024-04-12T06:16:10Z |
| publishDate | 2022-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj.art-8ba1b455748f4320b60ffaee421fdb702022-12-22T03:44:29ZengTaylor & Francis GroupCogent Economics & Finance2332-20392022-12-0110110.1080/23322039.2022.2111799On the predictors of loan utilization and delinquency among microfinance borrowers in Zimbabwe: A Poisson regression approachRichard Chamboko0Sevias Guvuriro1Development Impact Measurement Department, International Finance Corporation, World Bank Group, Washington DC, USADepartment of Economics and Finance, University of the Free State, Bloemfontein, South AfricaMicrofinance institutions (MFIs) are a prominent financial inclusion initiative in many developing countries. In Zimbabwe, however, less is known about microfinance borrowers, determinants of loan utilisation and borrowers’ repayment behaviour. Demonstrating that MFIs serve those who are economically marginalised and traditionally excluded from the formal financial system is useful in a country where most of the economic activities are in the informal sector. This study investigated the factors associated with the utilisation of microfinance loans and delinquency among microfinance borrowers using the Poisson, logit and the zero-truncated Poisson regression models on 6165 unique borrowers in Zimbabwe. The study findings revealed that microfinance loans were significantly more likely to be accessed by low-income individuals, who took small loans with relatively high instalments. Women were less likely to access microfinance loans, and reliable borrowers were more likely to access repeat loans. The level of income, number of previous loans and loan terms explained the delinquency among borrowers. Largely, the findings suggest that microfinance in Zimbabwe serves the needs of the low-income group. However, policies that seek to improve access to credit for women and youth remain a priority.https://www.tandfonline.com/doi/10.1080/23322039.2022.2111799Creditmicrofinance institutionsdelinquencyZimbabwepoisson regressionE51 |
| spellingShingle | Richard Chamboko Sevias Guvuriro On the predictors of loan utilization and delinquency among microfinance borrowers in Zimbabwe: A Poisson regression approach Cogent Economics & Finance Credit microfinance institutions delinquency Zimbabwe poisson regression E51 |
| title | On the predictors of loan utilization and delinquency among microfinance borrowers in Zimbabwe: A Poisson regression approach |
| title_full | On the predictors of loan utilization and delinquency among microfinance borrowers in Zimbabwe: A Poisson regression approach |
| title_fullStr | On the predictors of loan utilization and delinquency among microfinance borrowers in Zimbabwe: A Poisson regression approach |
| title_full_unstemmed | On the predictors of loan utilization and delinquency among microfinance borrowers in Zimbabwe: A Poisson regression approach |
| title_short | On the predictors of loan utilization and delinquency among microfinance borrowers in Zimbabwe: A Poisson regression approach |
| title_sort | on the predictors of loan utilization and delinquency among microfinance borrowers in zimbabwe a poisson regression approach |
| topic | Credit microfinance institutions delinquency Zimbabwe poisson regression E51 |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2022.2111799 |
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