Loan Repayment in Rural Financial Markets: A Multinomial Logit Analysis
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Publisher:Ohio State University. Department of Agricultural, Environmental, and Development Economics
Series/Report no.:Ohio State University. Department of Agricultural Economics and Rural Sociology. ESO (Economics and Sociology Occasional Paper). No. 1776
This paper analyzes the repayment performance of loans disbursed by a typical developing country specialized lender, the Agricultural Development Bank of the Dominican Republic. It shows that loans in default are just one dimension of the repayment problems faced by specialized lenders and that rescheduling and payment with arrears should not be ignored. It also shows that, by following through time the status of loans disbursed in a particular period, the factors determining repayment performance may be better identified. It also shows how the results from the Multinomial Logit analysis can be used by the lenders for analyzing the various types of potential repayment problems that they encounter.