An Analysis on the Trend of Personal Loans in Commercial Banks of Botswana

Abstract

Personal loans are the fastest growing products of unsecured credit facilities in spite of high interest rate, due to smart positioning of the product by financial institutions. Personal loans are the easy option of people for financial requirements as they do not attract encumbrances and with a little practical formality to obtain them. The researcher focuses on the current trend of personal loans and the factors that influence the trend from different perceptions of lenders and borrowers.The researcher also reviewed that the recent growth in personal loan is healthier in the banking system and at the same time, the consumers are utilizing it for the right purposes. This study observed that there is a growth in dispersal of personal loan by commercial banks. The report provides comprehensive analysis of the trend, information and insight on to the driver supporting the growth of personal loans in the financial market of Botswana. Each factor that was considered in setting the trend of growth in personal loans is elaborately scrutinized in both supply and demand perspective. Commercial banks are taken as population for this study as they are the major personal loans lenders in Botswana. A random sample method is used to collect data using questionnaires and interviews with the consumers and the lenders