Economy

The lack of investment in agriculture system of Iran, especially in family farmingoperation, has made this system vulnerable to natural and unnatural disasters andhazards. In this way, Keshavarzi bank is one of the institutions that plays a critical role in financing the agriculture system. In order to meet credit needs of farmers, Keshavarzi bank makes use of two main sources of saving mobilization and installment collection of due-date credit granted to the farmers. Due to the small amount of savings of this bank, compared with others, installment collection of due-date credit granted to farmers is the main financial resource to fulfill the desires of credit applicants. The nonrepayment of facilities or making delays in refunds will result in disturbance in fulfilling bank commitments. Any negligence in on-time repayment of due-date credits by farmers will cause in yield decline of collecting granted credits and financial resources, consequently. Therefore, regarding the on-time collection of granted credits as a main issue in the surviving of credit institutions together with the ever-growing rate of nonrepayment in Keshavarzi bank and high dependency of financial resources on collected credits, investigating effective factors contributing to the non-repayment of bank facilities is something essential. Due to the significance of credit granted by Keshavarzi bank and its non-repayment as one of the main reasons of the limitations applied in farming facilities in many countries, lots of researches have been done in this field to find a way and solve the existing problems. In these researches several issues related to the effectiveness of repaying agriculture loans have been taken into consideration to illustrate an appropriate approach for making well-planned decisions in coping with problems like this. Generally, researches indicate that there are different factors affecting non-repayment of facilities by Keshavarzi bank which can be classified in the context of economic, technical, financial or social features or in job specifications or personal ones.

This is an applied research which consists of quantitative nature and among those of non-experimental ones in terms of degree of the control of variables. Data collecting has been done in the same way as surveys. Statistical population including borrowers of several branches of Keshavarzi bank (N= 360) in Ilam county. Determining the size of samples, Krejcie and Morgan table has been used according to which the sample size of 186 people has been calculated. To get the samples for questioner accomplishment, stratified sampling method has been used. The questionnaire face validity (based on the comments by faculty members of Azad University) and reliability of the research tools have been determined by the use of Cronbach's alpha coefficient (α = 82%). The variable correlation has been calculated using Eta test. Effective factors contributing to the non-repayment of granted credits have been analyzed by stepwise forward method of logistic regression. Meanwhile, the data were processed and analyzed using SPSS statistical software.

According to the survey, a vast majority of the granted funds has been devoted to livestock activities. These activities, considering the geographical and climate conditions of Ilam County, is among the investing priorities of its authorities and inhabitants. Moreover, the range of credit granted to most borrowers (66.6 %) has been from 5 to 30 million Tomans. The average time of repayment in the sampling case was about 6.91 years regarding 82.25% of borrowers repaying them in a period of 5 to 10 years. Present findings indicate that 63.44% of borrowers haven’t repaid their loans yet. It is only about 36.56% of borrowers who have paid them on-time. The results of the correlation coefficient test on dependent variables of repaying status and independent variables suggest that there is a high impact connection between the amount of personal  deposits at the time of taking the loan and the amount of credit, referral number assigned to the bank to take the loan, and non-repayment of the granted credits. Stepwise forward method of logistic regression has been used here to investigate effective factors contributing to the non-repayment of granted credits. Variables including the proceeds of agricultural activities, the amount of bank profit from granted credits, the referral number assigned to the bank to take the loan, the amount of installment, the amount of personal deposits at the time of taking the loan, any record of loan taking, the pay-off period and the supervising quality of bank inspectors were separately entered into the regression in seven different steps to predict about 0.768 percent of changes of dependent variable ( probability of non-repayment of granted facilities). Additionally, based on results from the regression analysis, any increase in the bank profits from received facilities, the referral number assigned to the bank to take the loan and the amount of taken credits will cause in the increase of the probability of non-repayment of the taken loan. As on the other hand, increasing of annuity from agricultural activities, the amount of personal deposit at the time of taking the loan, the pay-off period, the number of inspectors' supervision and record of loan taking will lead to the decrease of the probability of non-repayment.

Considering the important role of agriculture sector in the rural economy, it has caused the development of rural economy in various environmental, social and economic aspects. Thus it can play a significant role in achieving sustainable rural development. To achieve such goals, a particular value must be given to natural, social, human and financial capital resources. Among these, financial capitals receive the highest level of importance. According to the relatively small amount of local benefits of villages along with limited financial resources, less capital flows can be seen to the agriculture sector. Due to the individual exploitation system in the form of micro-credit granting, this condition has caused government give an important value to the supporting procedures of agricultural sector. Karasf in Khodabande county of Zanjan province is one of those rural districts whose share of agriculture sector in its economy is highly remarkable. The relatively low income of farmers in this region together with bureaucratic mechanism of banking system to finance resources of agricultural sector provoked farmers to utilize micro-credits. As in the years of 1385-1392 about 30 thousands of credits was granted to the farmers of this region. Approximately about 66 billion Tomeans of microcredits allocated to this region. It has been concluded to some effective results for villagers in agricultural sector and consequently for the rural development of the study area of the project. the present research we are trying to evaluate the effectiveness of such credits which have been mainly used in agricultural sector. In this regard the following fundamental question raised:

This study done by the used of descriptive analytical approach. The statistical population includes exploiting farmers of different villages from rural district of Karasf in Zanjan province (20 villages), Agriculture Jihad experts (10 experts), and experts of agriculture bank (5 experts) in Khodabande county. The following steps were spent in order to sample and determine the sample size: Selecting sample villages, we initially determined the number of villages which were taking advantages of microcredits and then classified them through the frequency of targeted utilizing. Out of 20 villages which had received credits, the sample size of 4 was determined by means of an estimation method based on similar research experience. Then 4 villages of Karsaf, Paskuhan, Korechal, and Dalaye sofla were selected based on results from qualitative sampling. By the use of Cochrane method, 157 out of 2200 units which were taking advantage of microcredits (and had received the credits at least one time in 1385- 1392) selected as agriculture utilizing units. Then using random and stratified sampling methods a case group has been selected from four villages. The intended experts were investigated by census method. To measure the amount of effectiveness, criterions like bank credits for the installment sales of machinery, creating livestock facilities, credits granted for digging wells, providing engine, saving the cost of planting, sowing and harvesting, creating jobs, increasing the amount of production, increasing of revenue and preventing migration of villagers have been selected. Data collection has done through library and field methods. Questionnaires and questioning techniques have been used in parts related to field studies. Due to the subjective nature of the criterions, an ordinal scale used for evaluating data. To assess validity and reliability of the questionnaire, expert opinion and Cronbach's alpha have been respectively used with emphasis on internal consistency of data. Total alpha coefficient was about 82% which indicates high reliability of the questionnaire. One sample t test and rational arguments were used for analyzing data.

Measuring the effectiveness of agricultural microcredits in rural development indicates that some indicators are more effective than others. The increase of agricultural products (particularly crop products) is the most effective factor on the effectiveness of microcredits. Of course, some other significant factors like the increase of income and savings and decrease of the migration rate can be attributed to it. Results show that agricultural microcredits do not affect equally on different indicators of development- especially on socio-economic ones. Moreover, executive mechanisms of granted microcredits influenced by traditional approach (economic growth) are not necessary efficient enough. In this framework, effective factors like centralized management (up to down) and official and legal relationships have caused financial resources of local nature not to rely on micro-savings by people which has caused by itself the instability of such resources. This situation can be a consequence of different factors. Among these factors, the dominant approach of implementing the policy of agricultural micro-credit is one of the most important ones. A comparative study of the principles governing the granting of credits shows that in the study area, traditional thinking (affected by the perspective of economic growth) was dominant. In the other words, one-dimensional development of the study area influenced by microcredit is influenced by traditional thinking which is governing its role of credits in positive developments of rural areas.