Repayment Practices of the SME Borrowers

This study analyzes the repayment practices of SMEs operating in Sarawak, the largest state of Malaysia. Results showed that about 63% of the respondents did not pay their credit obligations on time. Furthermore, higher total liability per month was found to be significantly associated to higher loan delinquencies. Meanwhile, level of education attained by respondents also reported significant predictive power over their repayment practices. A higher level of education level attained implies better credit management. On the other hand, respondents’ financial capability which is represented by household income did not have any significant impact on their repayment performances.