Factors Affecting Women's Effectiveness in use of Microfinance and Microcredit Services; Jimma Zone, Southwest Ethiopia

Abstract

This study has focused particularly on assessing the loan repayment performance of female headed households on Oromiya Credit and Saving Share Company (OCSSCO) of Jimma Zone Ethiopia. Primary data were collected from 205 female headed households in the study area. With the help of Logit model the study found that family size of the household, health status of the respondent, loan diversion, time of loan application and distance from credit source variables are statistically significant and negatively affect the loan repayment performance of borrowers. While, the age of the borrower, education level of the respondent, experience of the borrower, celebrating of social ceremony, monthly expenditure, application of machinery, installment period and loan seize variables are statistically insignificant in affecting the loan repayment performance of borrowers however their sign was positive. The study recommend that microfinance institutions should give due attention on the family size of the respondents, distance from the credit source and health status of the respondents before applying the disbursement of the loan.