The Probability of Default on Payable Facilities of the First Micro Finance Bank in Herat Afghanistan

The aim of this study is to investigate the factors affecting the probability of banking facilities default by customers and to determine the main variables coefficient related to the probability of default. Finally, using logit regression, a model has been provided to increase the ability of the bank's managers to solve the problem of non-repayment of credit facilities on time. First, 7 variables that had a significant effect on customers' credit risk were identified and fitted to the significance level of 5% of the final model using LR statistics. The results showed that the variables of the borrower's monthly income, the borrower's relationship with the guarantor, the guarantor's guaranteed capital, the borrower's experience and job stability, the loan repayment period and the years of borrower's relationship with the bank, have adverse effect on credit risk and the variable loan amount has a direct effect on credit risk.