Causes of Individual Multiple Borrowing in Micro Finance (A Case Study of Pyuthan Municipality)

Abstract

This descriptive research on the microcredit industry of Pyuthan municipality is an attempt to explore the causes of multiple borrowing. This study is mainly a primary data-based descriptive research based on 120 sample respondents from Pyuthan municipality. Convenient sampling method was used and one structured questionnaire had been used to collect response of the respondents. Data was collected through face to face interview. The main reason for multiple borrowing is the small size of loans from MFIs. The research objectives were to analyze the effects of supply factors (Growth of MFIs, Strong competition and Service quality) as well as to evaluate how demand factors (Consumption demand and Micro-enterprises) affect the multiple borrowing. The results indicated that microfinance services had effects on the multiple borrowing of clients. The descriptive statistics shows that the time period involve in micro finance, interest rate, loan cycle, loan size that measures the minimum, maximum, mean and standard deviation. The correlation analysis reveals that the multiple borrowing has highly positive relationship with Growth of MFIs, Strong competition, Service quality, Consumption demand and Micro-enterprises. Similarly, the microfinance clients gender, education, age, marital status, occupation status and income plays vital role on multiple borrowing. Whereas the multiple borrowing have a positive significant. The study also reveals that multiple borrowing has a significant relation with Growth of MFIs, Strong competition, Service quality, Consumption demand and Microenterprises.