Authors : Justina Lombe Phiri; Eng. Lameck Nsama

Volume/Issue : Volume 10 - 2025, Issue 1 - January

Google Scholar : https://tinyurl.com/bdzynrkf

Scribd : https://tinyurl.com/3hv4hcs6

DOI : https://doi.org/10.5281/zenodo.14891747

Abstract : This study aims to investigate the effectiveness of online lending and credit management systems on loan performance among microfinance institutions in Zambia. Microfinance institutions (MFIs) play a vital role in providing loans to the rural communities and unbankedand underserved population thereby bridging the financing gap in the mainstream financial sector. However, the high incidence of risks associated with the high levels of nonperforming loans by MFIs in the past years, threatens their growth and sustainability. The effectiveness of online lending and credit management systems is critical to the success of MFIs as most of their income is generated from interest earned on loans extended to small and medium entrepreneurs. Past studies have focused on loan application models used by MFIs and the impact on their profitability, but there has been lack of proven studies on credit recovery systems. The findings of this study could help improve online lending and credit management systems in MFIs and enhance their ability to provide access to credit for the rural unbanked and unserved population.

Keywords : Microfinance Institutions, Credit Risk, Credit Management Systems, Loan Performance, Rural Unbanked Population, Non-Performing Loans.

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