Factors Affecting on Agricultural Credit Allocation and Constraint Analyses of Farmers in East Azarbayjan Province

Farmers were faced to credit constraint constantly and identifying the factors affecting on it has a specific important. Therefore, this study analyzes factors influencing agricultural credit allocation and constraint condition of farmers in East Azarbayjan Province using implementing 94 questionnaires in 2012. The Probit regression model was used to estimate the parameters of the determinants of credit constraint of the farmers. Also, the Tobit model was also used to estimate the parameters of the determinants of the rate of agricultural credit allocated to the farm activities. According to the results, the age, education, household size of farmers, farm income and non farm income have significant influence on credit constraint conditions of the farmers. The empirical results of the Tobit regression model reveal that amount of credit received, education, farming experience, and farm income have positive influence on the rate of agricultural credit allocation to the farm sector. But some variables such as loan delay and bank visit before loan acquisition have negative influence on the rate of agricultural credit allocation to the farm sector.

JEL Classification: G 21, D14, C25, C21

Keywords:
Tobit Regression, Probit Regression, Agricultural Credit Constraint, Credit Allocation, East Azarbayjan Province