Abstract:
The objective of the study was to examine how interest rates affect loan repayment in Multicredit Savings and Loans and how loan defaults affect the institution. The research was conducted using Multi Credit, a savings and loan organization in Winneba. Questionnaires were used in this research. Ten (10) staff and 100 customers were sampled for the study. The study shows that high interest rates are a significant factor in loan repayment in Multicredit Savings and Loans. Although interest rates were one of the main reasons for loan default, other elements, including loan term, frequency of repayment, and late loan delivery, also had an impact on loan payback. While the customers acknowledged that reduced interest rates would improve loan repayment, they also stressed the importance of accessibility and funding availability. The effectiveness of Savings and Loans institutions' loan management, budgets, and spending are all impacted by defaulted loans. Moderate interest rates are recommended by the researcher to lessen the strain of loan repayment, and loans should only be amounts that the customers can afford. Again, Savings and Loans should make sure that loans are delivered on schedule to customers and should set up micro-insurance to safeguard both the institution and its customers in the event of a default.
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