Embarrasability And Tendency to Repay Borrowed Funds

Abstract

Liquidity of banks is one of the measures of good economic standing of a country, since the private sector derives it's financial strength from the banks. However, the industry in Nigeria is faced with bad debts as a malignancy, which has led to collapse of many banks in the past Recently, the CBNinstructed commercial banks to make serious moves to recover their debts as the Apex bank may not bail out defaulting banks. Non-repayment of loans could be a consequence of failed investment on the part of the borrower, tragic incidents and natural disasters, due to mismanagement or misappropriation of the borrowed funds, or misguided belief about borrowed money. Participants numbering eighty (80) were purposively selected from three cooperative savings and loans customers in Awka. They were aged between 24 and 57 with a mean age of 32 and SD of 6.4. They responded to Embarrassment scale, a 25 item questionnaire developed by Kelly and Jones (1977), and an 18 items questionnaire with a yes and no format used to measure tendency to repay loans. The study utilized correlation design. Results show that at p<.05, the calculated r = .38, which is significant Therefore the hypothesis was accepted. This result strongly suggests that as embarassability increases, the tendency to pay back loans also increases.