Analysis of factors influence loan default among borrowers at Agro Bank Seremban / Roslaili Razelan

This study is interested in determining factors influencing default in loan repayment among borrowers at Agro Bank Seremban specifically for micro finance. A total of 70 respondent which is customers at Agro Bank were randomly sampled. A model was employed to determine and analyse the factors influencing default in loan repayment in the study area. Reliability analysis were computed to determine the Cronbach’s alpha for every independent variable and dependent variable. Cronbach’s alpha for every independent and dependent variable above .7 means the questionaires can be distributed to the respondents. Descriptive statistics were also employed to describe the socio-economic characteristics of the respondents. Finding revealed that majority of the respondent are in active working age and are educated. All independent variable which is income level, household size, loan duration, loan size, job status and behavior shows significant result where the significant level less than 0.05. Most of the borrowers having problem in loan repayment.Result from the probit model revealed that job status are significantly influence default in loan repayment. Most the borrowers are within the stable income but have behaviour problem which less committed to their loan.