New Dimensions in the Evaluation of Agricultural Credits



Commercial banks provide loans to agricultural customers depending on the specificity of their activity. Generally, the process of lending money to farms involves five stages: application, analysis and evaluation, approval, granting, and loan repayment (Harangus, 2004). In the assessment of credit, commercial banks establish the maximum amount of credit that can be granted to an applicant. This volume is determined within maximum credit percentages specified in the rules of each bank, depending on the reimbursement possibilities and payment of monthly interest, as well as the guarantees accepted by the bank. In assessing agricultural loans, banks have to consider both the degree of agriculture-specific risk and capacity of risk management provided by agricultural customer (Kostov and Lingard, 2004).

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