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

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.

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