FACTORS INFLUENCING PROPER CREDIT UTILIZATION OF THE ASA CREDIT BORROWERS

Abstract

Bangladesh being a developing country, many NGOs (Non Government Organizations) and MFIs (Micro Finance Institutions) are working besides Governments various activities for the improvement of the socio-economic status of its population. ASA (Association of Social Advancement) is one of the best managed microfinance institution in Bangladesh. It has multisectoral program and activities spread across the country. ASA has taken up various programs for the development of women. The present study deals with the involvement of ASA beneficiaries in micro-credit activities. The main purpose of this study is to assess the level of credit utilization of the ASA credit borrowers. Besides, attempt was also made to explore the contribution of some selected characteristics of ASA beneficiaries to their credit utilization. The study was conducted at three villages of Thakurgaon Sadar Upazila under Thakurgaon district. Total 73 ASA beneficiaries were randomly selected which constituted the sample. Survey methods was used to collect information from the respondents. Correlation co-efficient method was administered and 9 independent variables namely: age, education, family size, farm size, annual income, credit received, attitude towards ASA, NGO involvement and duration of involvement with ASA were considered to run the analysis. The findings revealed that 43.83 percent of the borrowers had medium credit utilization where 19.19 percent had no utilization and only 31.50 had high credit utilization. Among the nine selected characteristics of the beneficiaries correlated with their credit utilization only four variables namely: education, farm size, annual income and NGO involvement had significant positive relationship. On the other hand, age, family size, credit received, attitude towards ASA and duration of involvement with ASA of the respondents had no significant relationship with their credit utilization behavior. The ASA authority should pay more attention to increase respondent’s credit utilization.