WELL COME TO

MY
THESIS
PRESENTATION
FACTOR AFFECTING OF THE LOAN REPAYMENT PERFORMANCE OF
SMALLHOLDERS FARMERS: CASE OF ABICHUGNEA WOREDA

By
SEIFA TESFAYE WEDAJO

JULY,2022
OUT LINES OF THE REFELECTION
 Introduction
 Background
• Statement of the problem
• Basic Researchs
• Objectives of the Study
 Methodological Framework
 Research Method and Design
 Data Sources
 Sample and Sampling techniques
 Data Collection Instruments
 Data Analysis Method

 BACKGROUND OF THE STUDY
 In the developing world economic growth depends
on a great extent of the growth of agricultural sector.
 According to FAO (2011), there are no reliable
maps of smallholder farms.
 However, farm field sizes suggest where they are
most likely to be found.
 International Year of Family Farming or smallholder
farming.
 CON’T

 According UNCTAD (2015), there were many

good signs for smallholder farmers in 2014.
 Indeed, the contributions of family farmers or
smallholders to food security, poverty reduction and
sustainable development were specifically
recognized by the United Nations General Assembly
when it declared 2014
 CON’T
 Smallholder farmers in most of sub-Saharan Africa
still produce in agricultural systems characterized by
low input and low outputs (DAFF, 2012).
 Low yield is the most critical factor affecting
profitability and competitiveness of smallholder
farmers.
 Furthermore, many smallholder farmers are
unprepared to meet the complex demands of
agricultural business.
 CON’T
 Ethiopia is one example of a developing country,
characterized predominantly subsistence a
grarian economy especially prior to 1975, was
feudal and the land tenure system was insecure.
 The majority of Ethiopian farmers have less than
three hectares of farm land size since 1997
reform a land management (Adal Yigremew.
 Many lack the skills and resources required to
engage in commercialized agriculture. Over 80%
of smallholder farmers still produce at the
subsistence level.
 STATEMENT OF THE PROBLEM
 In the subsistence agriculture and low-income
countries like Ethiopia, smallholder farmers are
facing severe shortage of financial resources to
purchase productive agricultural inputs.
 Whereas MFIs were recognized to fill the gap in the
financial sectors by providing fund to the poor or
low income groups without collateral so as to
eradicate poverty
 CON’T
 However, in the study area there is gap of
implementation of strategy by different factors
such as individual borrower’s characteristics,
loan characteristics, firm characteristics and
lender characteristics, natural disaster
 Therefore, the researcher motivated to conduct
this study on factors affecting loan repayment
performance of smallholder farmer borrowers..
RESEARCH QUESTIONS
1.To what extent do you agree with the following statements on
borrowers’ demographic factors and repayment of loans
performance?
2.To what extent do you agree with the following statements on
borrowers’ Social related factor and repayment of loans
performance?
3.Towhat extent do you agree with the following statements on
borrowers’ Economic and repayment of loans performance?
4.To what extent do you agree with the following statements on
borrowers’ institutional and repayment of loans performance?
 OBJECTIVE 0F RESEARCH
General objective
 The General objective of the study was to examine
factors affecting loan repayment performance of
smallholder farmers who were borrowers.
 SPECIFIC OBJECTIVES

Based on the general objective stated above, the

researcher has developed the following specific
Objectives;
 To examine the demographic factors for loan
repayment performance of smallholder farmers’
borrowers
 To examine social factors for loan repayment
performance of smallholder farmer’s borrower’s
 To examine economic factors for loan repayment
performance of smallholder farmer’s borrower’s
 To examine institutional factors of loan repayment
RESEARCH QUESTIONS

To achieve the aforementioned purposes, the following research

questions were posted
 To what extent do you agree with the following statements on

borrowers’ demographic factors and repayment of loans

performance
 To what extent do you agree with the following statements on

borrowers’ Social related factor and repayment of loans

performance?
 Towhat extent do you agree with the following statements on

borrowers’Economicl and repayment of loans performance?

 Towhat extent do you agree with the following statements on

borrowers’ institutional and repayment of loans

performance?
THE RESEARCH DESIGN & METHODOLOGY
Research Design and Method
 This research used quantitative research approach.

Quantitative research is based on the measurement

of quantity or amount.
DATA SOURCES
The two main Sources of data were used
1,Primary Data,It was collected from sample
respondents through Survey questionniers(from
borrowers)
2,Secondary Data, from the borrowers master
register books
POPULATION,SAMPLE SIZE AND SAMPLING TECHNIQUES
Branches Population Sample Total Sampling techniques

Male Female Male Female total sample

Mendida 01 68 8 19 1 20
stratified random sampling

Mendida 02 150 10 18 2 20 ‘’

Nano Mendida 128 9 20 - 20 ‘’

Ilanni 140 11 19 - 19 ‘’

Total 486 38 76 3 79
 DATA COLLECTION INSTRUMENTS

Questionnaire
 This study was used questionnaire to collect a large
amount of information from the large number of
respondents(borrowers) in a short period of time.
 The quantitative data was computed using mean
item scores range 1.0-5.0 .
METHOD OF DATA ANALYSIS
 In this study, the data were collected through the
survey questionnaires were;
 Processed using SPSS version 20
 Analyzed by employing different statistical tools.
 means and Standard deviation were used to
analyses quantitative data.
SUMMARY,CONCLUSION AND
RECOMMENDATION
Based on the result we can summarize theresearch.
 Smallholder farmers required improved agricultural
technologies, knowledge and inputs such as
fertilizer, improved seeds, pesticides and others
that help to increase production and productivity
thereby to transform their farm structure and
capacity.
 However, the majority of Ethiopian population
comprises small farmers, who cannot implement
a technology without external funding.
 CON’T
 Even though, there are attempts to solve these
rural financial difficulties by government
through extending microfinance institution,
associated to different factors, a number of farmers
are becoming defaulters and the lending
institution faces a problem.
 A key challenge is determining what types of
policies and strategies to adopt to solve the
problem.
 CON’T
 In order to improve the production and
productivity of smallholder farmers and keep up
its contribution to the country’s economic
development, the need of financial support from
formal sources is indispensable.
 This is because smallholders are numerically
dominant (contributes over 80 percent of the
production) and financially weak.
 CONCLUSIONS
Based on the result the following conclusion
forwarded.
 The result revealed that, Loan repayment

performance has maximum mean score with high

standard Deviation.
 The mean score of demographic factor, economic

factor, and institutional factor had higher mean.

 The mean score of social factor was moderate.
 RECOMMENDATION
 Based on the conclusions the researcher forwarded
the following recommendations.
 Microfinance institution, regional government and
NGO’S should give special attention for demographic
factors of borrowers before provide loan by
supervision because demographic factors were
main factors for loan repayment performance.
 Microfinance institution ,regional government and
NGO’S should give special attention for income of
borrowers by continuous follow up and supervision
because economic factors were more significance
 con’t
 Microfinance institution ,regional
government and NGO’S should give special
attention for income of borrowers by
continuous follow up and supervision
because economic factors were more
significance.
 CON’T
 Microfinance institution, regional government and
NGO’S must be improving borrower’s social
status before loan provide through training and
supervision because social ceremony can be
affect loan repayment performance negatively.
 The repayment periods for rural borrowers are
inflexible, and it is not match with the cash
availability of the client.
 CON’T
 During the repayment period agriculture
products are not demanded by the market and also
all products are not harvested.
 By considering this Microfinance institution,
regional government and NGO’S should make
flexible the repayment period according to the
client’s need.
 CON’T
 Generally Abichu Gnea Microfinance institution,
regional government and NGO’S should focus
their client selection criteria such as demographic,
social, economic and institutional characteristics
of the borrowers for good loan repayment
performance.
 THE END
THANK YOU
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