Perceptions of debt recovery practices within selected microfinance institutions in north Kivu province, DRC

This study examines the perceptions of debt recovery practices by loan officers and borrowers at certain microfinance institutions in North Kivu, DRC. It analyzes how borrowers perceive these practices based on the age of their loans (performing and non-performing), as well as the perceptions of loan officers and the overall perception. Thanks to Daniel Schwartz's formula, 384 respondents were selected, 336 borrowers, and 48 loan officers. Loan officers (6 by MFI) collected debts, while borrowers (42 by MFI) were randomly picked by repayment status. The MFIs selected were FINCA DRC, AKIBA YETU, HEKIMA, COOPEC LE TRESOR, LE PALMIER, LA SEMENCE, COOPEC AGROPAS-LE GRENIER, and COOPEC.A thorough questionnaire included monitoring (3 items), communication (4 items), restructuring (3 items), and enforcing debt recovery (4 items). The internal consistency was high (Cronbach's alpha = 0.863 to 0.944; composite reliability = 0.916 to 0.951), and the convergent validity was also high (AVE = 0.586 to 0.795). Descriptive statistics, structural equation modeling, and independent-sample t-tests were all used in the statistical study. Loan officers like debt recovery practices (4.42), while borrowers hate them (2.85). Communication and reorganization are different, but monitoring and enforcement are the same. Structural equation modeling demonstrates that communication enhances perceptions to the greatest extent. These findings show that MFI of North Kivu Province require recovery plans that are flexible, open, and focused on the borrower in order to build confidence, get people to pay back their loans, and include everyone in the economy.