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Determinants of repayment and overdues in agricultural sector

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  • S. Gandhimathi

Abstract

The Agricultural Credit Review Committee (1989) headed by Khusro identified several weaknesses in the rural credit delivery system which included poor loan recovery and overdues. In this context, the economic survey (1992-1993) had noted that 'despite phenomenal increase in overall agricultural credit, there is a serious problem of overdues'. In this backdrop, the current study attempted to analyse the determinants of repayment and overdues. In the current study, Bayesian analysis and the discriminant analysis were used to assess the probability contribution of the selected socio-economic factors to the amount of recovery and discriminating the borrowers/defaulters into defaulters and non-defaulters/wilful and non-wilful defaulters. The non-farm income and consumption expenditure were the dominant factors in classifying the defaulters into wilful and non-wilful defaulters. The wilful defaulting was mainly due to the expectation of the borrowers to write-off the loans and inefficient bank management.

Suggested Citation

  • S. Gandhimathi, 2012. "Determinants of repayment and overdues in agricultural sector," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(5), pages 590-602.
    • Handle: RePEc:ids:ijecbr:v:4:y:2012:i:5:p:590-602
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    Cited by:

    1. Sinha, Mukesh Kumar & Dhaka, J. P. & Mondal, B., 2013. "Analysing social attributes of loan default among small Indian Dairy farms: A discriminating approach," MPRA Paper 53362, University Library of Munich, Germany, revised 20 Jan 2014.
    2. MK, Sinha & JP, Dhaka, 2013. "Predicting risk of credit default using discriminant aproach:A study of tribal dairy darmers from Jharkhand," MPRA Paper 54158, University Library of Munich, Germany.

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