The Agricultural Development Bank of the Dominican Republic: A Loan Repayment Analysis
Loading...
Date
1990-07
Journal Title
Journal ISSN
Volume Title
Publisher
Ohio State University. Department of Agricultural, Environmental, and Development Economics
Abstract
The Agricultural Development Bank of the Dominican Republic has experienced liquidity shortages in the 19805, in part due to the growth of its non-performing portfolio. This paper documents the results of a field survey on the repayment status of a sample of loans granted in 1987. In order to overcome deficiencies in the bank's measures of delinquency, the performance of 3,455 sample loans was tracked over two years, focusing on installment arrears, rescheduling, and default. Repayment performance was related to borrower and loan contract characteristics, in order to generate a profile of the delinquent portfolio. These features included type of borrower, land tenure, type of investment, source of funds, and collateral. Approximately 72 percent of the number and 57 percent of the volume of loans had experienced some type of repayment problem. Marketing difficulties were identified as an important source of arrears, suggesting a role for ''bridge loans." Recommendations are offered on how to improve the bank's viability.