oa Journal of Economic and Financial Sciences - Determinants of micro-finance repayment performance : a study of South African MFIs

Volume 8, Issue 2
  • ISSN : 1995-7076



This empirical article looks at the determinants of joint-liability lending repayment performance among the two largest microfinance group-lending organisations in South Africa. Most empirical work on repayment performance does not focus on the characteristics of group-based lending methodologies. This study is an attempt to fill this gap in South African microfinance literature. The results of the logit analysis uncover interesting findings. The study uses the Poverty Wealth Ranking score variable to show the ability of individuals with little or no collateral to be good borrowers. Smaller loan sizes are found to perform better than larger loans. An important contribution of the article is analysing the impact of group homogeneity on repayment performance. It was found that large group sizes and groups made up of male and female (as opposed to groups with only females) can have a negative impact on repayment performance. The findings also indicate that the more homogeneous a group in industry type the better the repayment performance.

Loading full text...

Full text loading...


Article metrics loading...


This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error