Behavioral Factors Influencing Students’ Loan Repayment in Tanzania

This study examined behavioral factors influencing student loan repayment among beneficiaries in Tanzania using a cross-sectional survey of 324 respondents. Findings revealed that 65% of respondents indicated a medium likelihood of timely repayment if their income increased, while actual repayment behavior was mostly rated as medium (61%), with only a small percentage making high repayments. Although 65% acknowledged the importance of timely repayment, prioritization of loan payments relative to other expenses was generally low to medium. Guided by behaviorism theory, the study highlights a disconnect between awareness of repayment importance and actual repayment behavior, suggesting weak environmental reinforcement of repayment habits. The study recommends strengthening incentives and penalties, improving financial literacy, and adopting flexible repayment plans to enhance loan repayment rates and sustainability of student loan schemes in Tanzania.