Determine the optimal portfolio of agricultural credits by using of Fuzzy logic

Document Type : Original Article

Authors

1 Associate Professor, Department of Agricultural Economics, Sari University of Agricultural Sciences and Natural Resources, Sari, Iran

2 PhD Graduate in Agricultural Economics, Sari University of Agricultural Sciences and Natural Resources, Sari, Iran

Abstract

The granted credits of agriculture sector are limited and the number of applicants and sub-sectors for these credits are much, therefore, this study tried to determine optimal portfolios for agricultural bank credits by using of fuzzy logic. For performance of this study, a fuzzy linear programming model based on profit maximization was used in the period of 2011-2015. In this study, two scenarios were considered for maximizing the objective function. The first scenario involves maximizing profits facilities and the second scenario involves maximizing the net intake facility (the profit rate that deducted from that the pending rate). In both scenarios, the absence of risk and existence of risk (fuzzy) is considered. The results of this study showed that due to limitations and existing laws, the current model of credits allocation of agricultural bank was not optimal and it is necessary to review in presents and amounts of credits. Also, the credits allocation model based on risks and uncertainties is closer to reality. Agricultural bank should be made part of agro-based industries, agriculture services, poultry and non-related activities with agricultural sector in the higher priorities. Also, agricultural bank considered the rate of arrears credits to avoid them.

Keywords

References

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Agricultural Economics and Development
Volume 28, Issue 3 - Serial Number 111
December 2020
Pages 93-124

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