The Effect of Social Capital on Customer’s Repayment Rate at Islamic Microfinance Institution

Abstract

This research aims to analyze the effect of social capital toward the repayment rate of Islamic MFIs’ customers. The method used in this research was the logistic regression. The results showed the variable relationship with BMT employees, relations with other customers, and Islamic recitation had positive and significant effect toward the repayment rate of the customer. While recommendations, membership status, and travel time from home to the BMT had negative and significant effect. The variable outside the social capital indicator which is income rate had no significant effect.