Performance analysis of the loan repayment by poor borrowers in rural areas of saccos in Njombe, Tanzania by using time series arima modelling

Abstract

This paper describes the application of the Box-Jenkins methodology in time series analysis in measuring the performance of SACCOS in respect of loan repayment. An autoregressive integrated moving average (ARIMA) model is fitted and then forecasts are made to see the viability of the loan repayment. The study focuses on time series modelling and forecasting of loan repayment at Kifanya SACCOS Limited in Njombe in Tanzania. The findings show that the best time series model for monthly loan repayment is ARIMA (1, 1, 2). This model fits well the historical data and hence can be used in short-term forecasting of loan repayment. The results shows that the loan repayment at Kifanya SACCOS Limited in Njombe in Tanzania follows an increasing trend, which is an indicator of its good governance.