Loan Repayment Performance in Community Development Finance Institutions in the UK

WK Derban, JM Binner, Andrew Mullineux

    Research output: Contribution to journalArticle

    28 Citations (Scopus)

    Abstract

    This paper identifies the key institutional factors that influence loan loss rates in Community Development Finance Institutions in the UK. Traditional bank credit assessment puts the blame of poor loan performance largely on the borrower. This is the first study of its kind to examine institutional characteristics of 16 CDFIs in the UK and assess their influence on the loan loss rates. The results show that 8 out of the 13 institutional characteristics examined significantly influence loan repayment performance. Although a vast body of literature supports the view that borrower characteristics are highly influential, our results provide strong evidence to show that institutional characteristics are equally important and both factors need to be taken into account if loan repayment performance is to be improved.
    Original languageEnglish
    Pages (from-to)319-332
    Number of pages14
    JournalSmall Business Economics
    Volume25
    Issue number4
    DOIs
    Publication statusPublished - 1 Nov 2005

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