Determinants of Financial Sustainability for Farm Credit Applications—A Delphi Study

Abstract

Farmers use credit from commercial credit providers to finance production activities. Commercial credit providers have to predict the financial sustainability of the enterprise to ensure that the borrower will have the ability to repay the loan. A Delphi study was conducted to explore what factors are used as indicators of loan-repayment ability of farmers. The objective was not only to identify factors that are currently considered, but also to identify other personal attributes that may improve the accuracy in predicting the repayment ability of potential borrowers. The Delphi was applied to a panel consisting of nine credit analysts and credit managers from a commercial credit provider in South Africa. The results indicate that the current and past financial performance, account standing, collateral, and credit record of the farm are very important in the assessment of applications in terms of financial performance. Experience and the success factors compared to competitors were found to be important, while age and education/qualification are regarded as less important in predicting repayment ability. The results also show that, although not currently objectively included in credit evaluations, credit analysis regards leadership and human relations; commitment and confidence; internal locus of control; self-efficacy; calculated risk taking; need for achievement; and opportunity seeking as important indicators of the ability of potential borrows to repay their loans. Thus, credit analysts and managers also regard management abilities and entrepreneurial characteristics of potential borrowers to be good indicators of repayment ability. Results from this research provide new indicator factors that can be used to extend existing credit evaluation instruments in order to more accurately predict repayment ability.

Challenges and Prospects of Sustaining Donor-Funded Projects in Rural Cameroon

“…Also, the educational status of beneficiaries was found to have a positive influence on the payment and sustainability of agricultural credit schemes in Nigeria [79], and in other similar contexts [76,80,81]. However, this result contradicts a case in South Africa, in which education was observed as a less important variable in predicting the repayment ability and sustainability of credits [82].…”

Toward an Economically Sustainable Casino Industry: A Development of Customer Value Indicators Using an Analytic Hierarchy Process

“…In order to accomplish the purpose of this research, previous research was reviewed and summarized, and the Delphi method was used to develop the lifetime value index of casino customers. Studies related to the development of indicators in new fields were conducted through intuition and consensus of experts through the Delphi method [27,28].…”

Exploring the Road to Agricultural Sustainability by Assessing the EU Debt Influencing Factors

“…International efforts were made to supply agriculture with financial resources [36][37][38]. For example, the Farm Credit System of the USA, was used as a last resort financing source [18,39] which was created especially for the risky agricultural activities, its result being the development of the rural areas.…”

“…[13] The study reveals that small farms are less likely to receive a credit and are more exposed to loss. [38] The findings of the Auto-Regressive Distributed Lag approach showed that short and long run relationship exist between agricultural credit and economic growth in both short and long run in Nigeria. Economic growth is influenced by dynamic variables, such as credit to agricultural sector, real exchange rate, real interest rate, private domestic investment and inflation rate.…”