ASSESSMENT OF ACCESS TO LOAN PRACTICES: EVIDENCE FROM WOMEN BORROWERS OF ENAT BANK

Abstract

In developing economies formal financial institutions are too weak to consider the poorest population tightly constrained in their access to financial services. Women represent around half of the world population and in many regions of the developing world their contribution is immense in all sectors of development. 75 percent of the world’s women cannot get bank loans because of different challenges. This study has the objective of assessing Access to Loan Practices of Women Borrowers of Enat Bank. The study used both primary and secondary data. Primary data were collected through structured questionnaire and in-depth semi- structured interview. Secondary data were collected from loan reports yearly (2017-2019) to obtain a reliable data. The population of the study was 416 women borrowers. A sample size of 125 was selected using convenience sampling. The research design was both qualitative and quantitative research method. The quantitative descriptive analysis was done by using SPSS and qualitative descriptive analysis was done by using content analysis. The findings indicated that Enat bank is highly good on facilitate access to loan, collateral issue, interest rate and special loan service. On the other hand, the bank has a limitation on issues of process of loan approving date, loan size, loan repayment date and access of loan information. The bank faces challenge to provide loan from bank’s internal challenges, borrowers related and other external challenges like government tax, losing business customer, husband’s permission for granting loan and women workload and family related problem. The loan used from the budgeted amount that allocated to borrowers was very minimal, that indicates there was idle budget and the actual loan disbursement is less than the targeted amount. To minimize these problems, the study recommended that the bank need to give a special attention on issue related to communication and consultation, estimation of collateral, evaluating the borrower’s financial report, improve maximum loan limit, ways of loan designed, repayment time, duration of the loan process, forecasting techniques and also facilitate access of loan to business owners who expand existing business like starting business owners. Borrowers should be creative new business activities, make competitive analysis and avoiding the use of loan for miscellaneous reason. In addition to that government should design and implement how to increase organizations that provide loan like EB and make favor tax for women.