A Research Report Submitted to Mzumbe University - Mbeya Campus in Partial Fulfillment of the Requirements for the Award of the Bachelor Degree of Accounting and Finance Business Sector (BAF-BS) of Mzumbe University.
The research was carried out to study the factors affecting individual loan repayment toward financial institutions performance, the researcher sought to establish the effects of collection policy, credit terms, client appraisal and credit risk. A case study of CRDB bank in Mount Livingstone Mbeya region.
This study used data collected from both primary and secondary data source. The methods primary data collection used were interview, observation, questionnaires and the method of secondary data was documentary review that were used to analyse data from purposive and simple random sampling of 93 sample sizes. The interpretation of data collected was analysed by using a computer program known as program of Statistical Package for Social Sciences (SPSS). The main variables taken into consideration were credit terms, credit risk, collection policy, client appraisal. All these objective brings negative impact to both individual capacities to pay the loan and Financial Institution performance in terms of profitability and its capital. Therefore, the financial institution should ensure they remove all factors that affecting individual loan repayment towards the Financial Institution Performance.by providing education to individual borrowers and provide training to bank officers who deals with credit department. Collection policy and credit terms were found to have a high statistical significance with loan performance of a financial institution. Further research is recommended on the effects of customer training in loan performance, assessment of the effects of economic downturn in loan performance, and other factors that affects individual loan performance in financial institutions such as political consideration, environmental and prevailing economic changes.
The researcher adopted qualitative and quantitative research designs. The respondents were the CRDB bank staff and the bank borrowers of Mbeya region.