Analysis of Repayment Behavior in Commercial Banks from Customers Perspective: A study on Mercantile Bank Limited, Bangladesh

Monir Ahmmed, Serajul Islam and Mohammad Toufiqur Rahman

This paper is an attempt to analyze the repayment behavior of the clients of commercial Banks. Such an effort has been made to find the socioeconomic factors that effect the loan repayment and to quantitatively determine the level of relationship. A sample bank named Mercantile Bank Limited has been randomly selected where 100 clients from different branches of the same bank have been surveyed through a structured questionnaire between August to December 2011.Descriptive Statistics was used to analyze the socio-economic factors while Multiple Regression Analysis was used to quantitatively determine the socioeconomic factors that influence the level of loan repayment. Results show that the average age of the respondents is 45 years and the mean schooling is 14 years .Loan recovery ratio is high having 84% collection rate. It is also found that age of clients, years of schooling and nature of business have high positive correlation with loan recovery while experiences of client have moderate correlation. On the other hand ,the portion of the debt ,capital structure and age of company possesses very weak correlation.