Factors influencing loan repayment performance among group borrowers in Bungoma West District, Bungoma County

Micro financing plays a key role in enabling small business organizations to expand their businesses and fund their operational costs.Micro finance is the supply of microloans, savings; micro insurance and other basic financial services to the poor-particularly those who have been left out by conventional banking institutions.Micro Financial Institutions lend small businesses both short term and long term loans.MFIs have embedded their operations in rural areas with the purpose of alleviating the poverty problem that affects many people.The lending philosophy of MFIs is based on the Grameen Bank model in which social groups form the collateral for receiving a loan.Without legal contractual obligations established to push members to adhere to a stipulated timeframe and interest rates many group members fail to pay back under the lenders' lending conditions.The purpose of this research is to investigate factors influencing loan payment ability of entrepreneurs accessing credit through groups.