Abstract:
This research was carried out to assess the factors affecting loan repayment performance of
SMEs of Omo Micro Finance institution, of Dawuro district in Gessa branch. In this research,
purposive sampling and stratified simple random sampling methods were used to select the
respondents, and questionaries’ and interviews were used to collect data for the study. The
questionaries’ was distributed to 166 SMEs of micro finance institution, in Gessa Branch and
interview was conducted in 14 branch officer. The collected data were analyzed by employing
descriptive statistics and inferential statistics such as frequency, mean, standard deviation
and binary correlation with the spss version 23. The study employed descriptive statistics
and explanatory research design and used both quantitative and qualitative research method.
The study finding established that entrepreneurship skill, saving habit, loan appraisal process
and training and experience were determinants factors of loan repayment problem by small
and mediumenterprises of the study area. On the basis of the study findings, some recomme
ndations were made to improve loan repayment performance in the study area. The study
recommends some factors were reason for loan default, such as lack of financial knowledge for
entrepreneurs, lack of sufficient appraisal process, and weak saving habit of entrepreneurs
should be minimized through short and long term training.
