The factors affecting loan repayment among commercial banks in Uganda

Abstract

The study examined the factors affecting loan repayment among commercial banks in Uganda. It was carried out in Stanbic bank Moroto branch, Moroto District. The purpose of the study was to evaluate the factors that may have affected loan repayment among commercial banks in Uganda. The concept of factors was limited to interest rates, collateral security and repayment capacity while loan repayment variables were portfolio quality, portfolio at risk and written offs. The study employed a case study research design which involved an intensive analysis of the research variables. The study used a sample size of 46 respondents which comprised of bank workers and borrowers picked from a total population of 56. Purposive and convenience sampling techniques were used to select the respondents. The respondents were issued with self-administered questionnaires which had only close ended questions. The persons correlation and multiple regression analysis was used. The study found out that one of the major factors of loan repayment was interest rates. The study then concludes that factors responsible have significantly positive effect on loan repayment commercial banks in Uganda and therefore, suggests that more studies should be conducted in the inter-related topic so that commercial banks can reduce on loan repayment problems and maximize profitability.