MSME LOAN REPAYMENT PERFORMANCE BASED ON BUSINESS OWNERS’ DEMOGRAPHICS AND BUSINESS CHARACTERISTICS

Abstract

Micro, small,  and medium  enterprises  (MSMEs)  have  made   substantial substantial   contributions  to  both   global   and  local  economies  over  an extended period. Academics  must painstakingly  examine and comprehend  the relevance of the issues faced by micro and small  enterprises to obtain a comprehensive knowledge. The challenge of financial access can stem from both demand and supply aspects, with particular emphasis on this subject. Financial institutions frequently exhibit reluctance in extending financial support to micro, small, and medium enterprises (MSMEs) owing to the intrinsic risks associated with these transactions. Microfinancing is often linked to significant risk due to the potential for borrower default on loans. Acknowledges the substantial impact of owners on the decision-making process, particularly with financial issues. This study seeks to examine the influence of the demographics of firm owners and the attributes of micro and small enterprises on the loan repayment challenges encountered by MSMEs. This research seeks to furnish  practitioners with an in-depth comprehension of  the  demographic  trends  and  characteristics  of  micro  and  small   firm owners   that    affect    the  challenges   associated   with   loan   repayment. Furthermore, it  seeks to enhance understanding of  the  challenges f aced by these  enterprises.  The  findings  from  the  Structural  Equation   Modelling (SEM)  Partial  Least  Squares  (PLS)   analysis   indicated   that   the   latent variables,  particularly  owner  demographics,   significantly   influence  loan repayment  challenges. Nonetheless,  it  has  been demonstrated that business characteristics do not substantially influence loan repayment challenges.