Factors Affecting the Working Capital Loans Repayment for Autumn Planting (the Case of Agricultural Bank)

Provided working capital loans by Agricultural Bank have an important role in the agricultural productions growth. Certainly, to reduce the risk of loan repayment in the Agricultural Bank, the policies should be based on farmers' behavior. This paper is aimed to investigate the factors affecting the repayment behavior of the borrowers. So we use Ordered Legit model which ease the grouping of borrowers. The statistical population involves all farmers in North Khorasan province which borrow, through this type of loan (working capital loans for autumn planting), in the period of 1392-93. The sample includes 300 borrowers that are selected using stratified random sampling with proportional allocation.The results of the model estimation show that the effects of annual agricultural income, positive outstanding balance, ownership, history of borrowing loans, education level, and production scale on the loan repayment are statistically significant and positive. An increase in the level of these variables reduces the probability of farmers being in a group that default on some part or whole their loans.