Multiple Logistic Regression Model -III

To identify Significant Predictors of successful Loan Repayment Performance. (LP)

Results of Multiple Logistic Regression Model -III

Variable Categories Frequencie %

 s
LP 0 104 70.27
0
  1 44 29.73
0
Interpretation
 Considering the 148 observations, 70% of Respondents have 0 as their Loan Repayment Performance, which
indicates that about 70% of Borrowers have at least one of the either, Delay , Default , Delinquency.
 29.7% of the Borrowers have Successful Loan Repayment Performance of 1, Which means 29.7% of
Borrowers have not Delayed, Defaulted or Fallen out of any Loan Programs.

Correspondence between the categories of the response variable and the probabilities (Variable LP):
Categories Probabilities
0 0
1 1
Interpretation
The regression model analyses for prediction of successful Loan Repayment Performance of 1 with probability of 1.

Goodness of Fit of the Regression Model

Statistic Independe Full
nt
Observations 148 148
Sum of weights 148.000 148.00
0
DF 147 118
-2 180.133 26.988
Log(Likelihood)
R²(McFadden) 0.000 0.850
R²(Cox and Snell) 0.000 0.645
R²(Nagelkerke) 0.000 0.916
AIC 182.133 86.988
SBC 185.130 176.90
5
Iterations 0 48
Interpretation
R² = 85% (McFadden), 64.5%(Cox and Snell), 91.6%(Nagelkerke) indicate a Good Fit, we may want to Deliberate in
future by remove some of the Insignificant Variables in order to increase the Strength of Relationship between LP
and Significant Explanatory Variables.

Test of Null Hypothesis for the Model

Statistic DF Chi-square p-Value
-2 Log(Likelihood) 29 153.145 < 0.0001
Score 29 145.848 < 0.0001
Wald 29 49.471 0.010
Interpretation
With the α=0.05 , the p value of the model is significantly less than the α. Hence the Model as a Whole is
Acceptable.

Hosmer-Lemeshow Statistic
Statistic Chi-square DF p-Value
Hosmer-Lemeshow Statistic 11.849 8 0.002
Hosmer-Lemeshow Statistic the p-value is 0.002 < α=0.05, Hence Model as a Whole is Significant

Source Value Standard Wald- p-Value Wald Wald Odds

error Chi Lower Upper Ratio
Square bound bound
(95%) (95%)
Intercept 16.619 42.346   0.007 -66.377 99.614 0.154
Monthly Income 4.000 0.000 1.000 <0.0001 -0.001 0.001 0.180
Sources of Income 1.867 2.990 6.470 0.005 -3.992 7.727 0.390
Personal Capital 0.000 0.000 1.000 0.527 0.000 0.000 0.401
Total Business Debt -0.222 0.000 1.000 0.006 0.000 0.000 0.257
Personal Debt -0.387 0.000 1.000 0.006 0.000 0.000 0.288
Efficent Utilization 0.043 0.111 0.958 0.001 -0.261 0.174 0.151
of Funds
Growth in 0.165 0.893 0.848 0.005 -1.915 1.585 0.034
Revenue(y o y)
Growth in Profits(y 0.511 0.834 1.036 <0.0001 -1.599 1.670 0.002
o y)
Expansion in 0.325 0.512 1.384 0.005 -0.679 1.329 0.402
Capacity
Amount Borrowed -2.519 0.000 1.000 0.009 0.000 0.000 0.008
from MFI
Tenure -0.554 0.670 0.575 0.041 -1.867 0.759 0.684
Rate of Interest -0.329 0.722 1.390 0.006 -1.085 1.744 0.208
EMI -0.001 0.002 0.999 0.007 -0.004 0.003 0.125
Grace period 1.159 2.388 0.314 <0.0001 -5.840 3.522 0.236
Loan officer yrly 0.133 0.359 1.142 0.007 -0.571 0.837 0.137
contact
Double Dipping -0.987 1.182 0.373 0.004 -3.304 1.329 0.698
Amount of Training 0.575 0.100 1.006 0.001 -0.191 0.202 0.003
received on Trade
No. of Counselling 0.300 0.394 0.741 0.004 -1.072 0.472 0.579
sessions attended
Taxation -0.483 0.820 0.617 0.006 -2.089 1.124 0.347
Gender-0 0.000 0.000
Gender-1 -0.149 0.750 0.861 0.842 -1.620 1.322 0.040
Age-1 0.000 0.000
Age-2 -1.118 2.107 0.327 0.596 -5.247 3.012 0.281
Age-3 -0.439 2.506 0.645 0.861 -5.350 4.473 0.031
Age-4 1.189 3.028 3.282 0.695 -4.746 7.123 0.154
Education-0 0.000 0.000
Education-1 0.661 2.988 1.936 0.008 -5.197 6.518 0.049
Education-2 0.548 3.822 1.729 0.009 -6.944 8.039 0.021
Education-3 4.508 6.338 0.011 0.005 -16.931 7.914 0.506
Reason to start the 0.000 0.000
trade-1
Reason to start the -0.894 1.879 0.409 0.634 -4.576 2.788 0.226
trade-2
Reason to start the 5.036 4.636 0.006 0.277 -14.122 4.050 1.180
trade-3
Reason to start the 3.111 6.222 0.045 0.617 -15.306 9.084 0.250
trade-4

Model Parameters
Interpretation
From the Above table we can interpret that the following Explanatory variables bring Significant Value in Exlaining
the Variability in predicting the Loan Repayment Performance LP.
 Significant Variables
1. Monthly Income
2. Sources of Income
3. Total Business Debt
4. Personal Debt
5. Efficent Utilization of Funds
6. Growth in Revenue(y o y)
7. Growth in Profits(y o y)
8. Expansion in Capacity
9. Amount Borrowed from MFI
10. Tenure
11. Rate of Interest
12. EMI
13. Grace period
14. Loan officer yrly contact
15. Double Dipping
16. Amount of Training received on Trade
17. No. of Counselling sessions attended From the Above table we can interpret that the following
18. Taxation Explanatory variables bring Significant Variability in predicting
19. Education the Loan Repayment Performance LP.

Insignificant Variables

1. Personal Capital
2. Age
3. Gender  From the Above table we can interpret that the
4. Reason to Start the Trade following Explanatory Variables Do Not bring any
Significant Value to explain the Variability in predicting
the Loan Repayment Performance LP. Hence in Future Deliberations we may want to Remove them from the
Model.

Key Observation
 It is also seen that the following Variables are the most influential in Predicting the Loan Repayment
Performance of a Borrower

Most Influential Variables

1. Monthly Income
2. Growth in Profits
3. Grace period
LP =16.619
+4.000* Monthly Income
+1.867*Sources of Income
+0.000*Personal Capital
-0.222Total Business Debt
-0.387Personal Debt
+0.043*Efficient Utilization of Funds
+0.165*Growth in Revenue(y o y)
+0.511*Growth in Profits(y o y)
+0.325*Expansion in Capacity
-2.519*Amount Borrowed from MFI
-0.554*Tenure
-0.329*Rate of Interest
-0.001*EMI
+1.159*Grace period
+0.133*Loan officer yrly contact
-0.987*Double Dipping
+0.575*Amount of Training received on Trade
+0.300*No. of Counselling sessions attended
-0.483*Taxation
+Factor *Gender+ Factor*Education+ Factor*Reason to start the trade

Variables with +Ve influence on LP

Monthly Income
Sources of Income
Personal Capital
Efficent Utilization of Funds
Growth in Revenue(y o y)
Growth in Profits(y o y)
Expansion in Capacity
Grace period
Loan officer yrly contact
Amount of Training received on Trade
No. of Counselling sessions attended
Variables with +Ve influence on LP
Total Business Debt
Personal Debt
Amount Borrowed from MFI
Tenure
Rate of Interest
EMI
Double Dipping
Taxation