Independent [Household Size]

The household size variable represents the number of people who depend on the respondent for a living. This is chosen over number of children because individuals who do not have children but have other dependent are taken care of. The variable is measured in continuous term and is expected to correlate positively with loan default.

Independent [Monthly Income]

The income variable represents the monthly income in Ghana cedis earned by the respondents. The variable is categorized into 6; Less than or equal to GHS200.00, GHS201.00-GHS400.00, GHS401.00-GHS600.00, GHS601.00-GHS800.00, GHS801.00-GHS1000.00 and above GHS1000.00 and were assigned the values 1, 2, 3, 4, 5 and 6 respectively. This study expects the income variable to have negative relationship with loan default.

Independent [Diversion]

The diversion variable represents a situation whereby a member use the loan received for different purpose other than the intended purpose for which the loan was received. In this study it is measured as a binary dummy and took the value 1 if a member uses the loan for different purpose and 0 if the loan was used for the intended purpose. Loan diversion is expected to have positive relationship with loan default.

Independent [Monitoring]

This refers to monitoring activities by the Loan Officers after a loan has been disbursed. Monitoring variable is measured as a binary dummy in this study and took the values 1 and 0 if borrowers were monitored and not monitored respectively. It is expected that monitoring will have negative relationship with loan default.