Farmers Characteristics and Its Influencing on Loans Resettlement Decision in Sri Lanka

Thayaparan Aruppillai, Paulina Mary Godwin Phillip


This study investigates the impact of socio-economic characteristics of the farmers and its impact on their loans resettlement behavior in the People’s Bank, Puttalam branch in Sri Lanka. Secondary data were collected from the bank officials and the data were analyzed with 100 applicants who are cultivating paddy as a major crop and other field crops during the Maha and Yala season 2011/2012. This study was analyzed using descriptive statistics, Tobit model and in addition to that elasticity of the loan repayment ratio also measured. The estimated Tobit regression model indicated that family members and secondary education were significantly positive influence on the farmers’ repayment behavior while loan disbursement has negative influence on their behavior in Sri Lanka. Other independent variables namely gender, age, civil status, major crops, income and higher level of education of the beneficiaries were not statistically significant influence on the farmers’ behavior in the above bank branch in Sri Lanka. The elasticity of the loan repayment performance for the variables also were calculated at the mean values and according to that number of family members, size of loans and secondary education were statistically significant. The overall results revealed that, the bank managers should considered the above characters of the borrowers to increase the probability of repayment ratio and thus it will help them to improve the efficiency of lending decision of the bank loans in future.

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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)  Email:

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