Microfinance Loan Default in Sri Lanka: A Case Study of Matugama Division

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Microfinance Loan Default in Sri Lanka: A Case Study of Matugama Division

October 3, 2020 Economics and Management 0

The goal of this study is to explore the factors influencing the default of microfinance loans in the Matugama Division, Sri Lanka. A deductive and a quantitative strategy were both employed. 5 Likert-scale developed a standardised questionnaire. Using convenient sampling, questionnaires were distributed among 133 microfinance loan borrowers in the Matugama region. The exploratory factor analysis was performed using SPSS version 22. Three factors helpful in understanding the default of microfinance loans in Sri Lanka were verified by the results of this report. These are the actions of the Microfinance Institute to govern the defaulting of loans; the features of the family and loan community of borrowers; and macroeconomic issues. Managers of Microfinance Institutes may use the results of this study to monitor their credit risk and customer portfolio. Such policy consequences, such as access to the Sri Lankan Credit Information Bureau, access to consumer credit history, and access to credit history There are few of them in government decisions directing Microfinance Institutes to seek securities from their clients.

Author (s) Details

Dr (Mrs) E. A. G. Sumanasiri
Department of Commerce, Faculty of Management Studies and Commerce, University of Sri Jayewardenepura, Sri Lanka.

Mr. D. T. Priyankara
Department of Commerce, Faculty of Management Studies and Commerce, University of Sri Jayewardenepura, Sri Lanka.

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