Loan Repayment Performance: What Most Influences in Youth Groups Loan Uptake?

Abstract

This paper focused on examining the determinants of repayment performance of the group loan uptake in Tanzania. The study applied a cross-sectional research design with the questionnaire as the primary method for data collection. Data were collected from youth groups based in Dar es Salaam who are beneficiaries of the Youth Development Fund (YDF). The findings have revealed that petty trading is the most preferred income- generating activity by the majority of youth beneficiaries of the YDF. Furthermore, the findings show that the amount provided by YDF to youth is not enough to run the enterprises and our results have demonstrated that the non performing loans in youth groups are the results of not having adequate training in entrepreneurship, financial management, and business management. It has been significantly established that beneficiaries who accessed the training have more chances to improve their loan repayment as compared to those with no training in business management, financial management, and entrepreneurship. Based on the study findings the study recommends that the YDF scheme needs to improve its operations, particularly in providing training to beneficiaries that will ultimately improve loan repayment.