Perception of microfinance debtors and loan officers on the importance of entrepreneurial and business skills for loan repayment rates

Daniel Agbeko*, Vincent Blok, S.W.F. Omta, G. Van der Velde

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

Entrepreneurial and business skills are widely recognized as important prerequisites for successful microbusiness entrepreneurship in developing countries and, therefore, loan repayment rates of microfinance institution (MFI) debtors. In the literature, it remains, however, unclear exactly what set of skills are most important. The present paper examines the extent to what microfinance debtors and loan officers agree on the relevance of various entrepreneurial and business skills for microbusiness performance and loan repayment. Results from two focus group discussions show that neither microfinance debtors nor loan officers agree on the ranking of skills. This suggests that microfinance debtors have specific needs for training and skills development, which, consequently, should be addressed on an individual basis. For loan officers to be effective in their duties of evaluating loan applications and supporting microfinance debtors, they need training to better understand the relevance of entrepreneurial and business skills for microfinance debtors’ loan repayment probabilities.
Original languageEnglish
Title of host publicationMicrofinance for Entrepreneurial Development
Subtitle of host publicationSustainability and Inclusion in Emerging Markets
PublisherSpringer International Publishing Switzerland
Pages73-85
ISBN (Electronic)9783319621111
ISBN (Print)9783319621104
DOIs
Publication statusPublished - 18 Oct 2017

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