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\hypersetup{pdftitle={The Determinants of Factors Influencing Loan Repayment and Profitability of Farm Households in Kordofan Region (Sudan)},pdfauthor={Abdelateif Hassan Ibrahim, Siegfried Bauer},pdfsubject={Tropentag 2010: Abstract},pdfkeywords={Agricultural production, formal credit, margin profit, profitability, willingness},pdfpagemode=None,colorlinks=true}
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\parbox[b]{13.4cm}{\centering \large{\textbf{Tropentag, September 14-16, 2010, Zurich}}\\[1ex] \Large{``World Food System  ---\\A Contribution from Europe''\\[2ex]}}
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\Large{\textbf{The Determinants of Factors Influencing Loan Repayment and Profitability of Farm Households in Kordofan Region (Sudan)\footnote{\textbf{Contact Address:} Abdelateif Hassan Ibrahim, Justus Liebig University of Giessen, Department of Project and Regional Planning, Senckenberg Str. 3, 35390~Giessen, Germany, \mbox{e-mail}: \email{lateif73@hotmail.com}}\\[0.8ex]}}
\normalsize{\textsc{Abdelateif Hassan Ibrahim, Siegfried Bauer}}
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\begin{itemize*}
\item[]{\small{\textit{Justus Liebig University of Giessen, Department of Project and Regional Planning, Germany}}}
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\index[author]{Ibrahim, Abdelateif Hassan}
\index[author]{Bauer, Siegfried}
\begin{center}
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\textbf{Abstract}
\begin{abstract}
\normalsize{
Although serious attention has given to support the process of development in the third world, still the poor people in rural area has largely marginalised. Several factors are responsible for this, including: limited access to credit, information, agricultural inputs, ignored in land reform and decision making process.



 This paper aimed to investigate the factors influencing farmer loan repayment behaviour and credit choices in North Kordofan State in Sudan. More specifically, this paper investigates whether the formal credit influence on profitability of agricultural production beside the determination of factors effects on repayment behaviour in rural households. The data were collected through a survey of 200 farm households (beneficiaries and non"=beneficiaries) in North Kordofan State conducted in 2009. Two separate parts of analysis were applied. First part switching regressions model were used to investigate the influence of formal credit as the dependent variable and measures of profitability of agricultural production (formal versus informal credit) as independent variables. In the second part of the analysis probit model were applied to test the factors effects on farmer's repayment behaviour. 



The models showed evidence of positive influencing. That is, there is strong evidence that rural farmers in North Kordofan State are willing to take formal credit from microfinance institutions rather than informal one when there is reasonable loans size and collaterals. However, the most significant factors influencing farmer's loan repayment behaviour are margin profit, time getting loan and farmer experience respectively.



The results suggest that Sudanese policy makers to promote effective and inclusive financial system to facilitate the loan application process and encourage risk reducing programs such as crop and price insurance and appropriate collaterals.
}

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\noindent \textbf{Keywords:} Agricultural production, formal credit, margin profit, profitability, willingness
\index[key]{Agricultural!production}
\index[key]{Formal credit}
\index[key]{Margin profit}
\index[key]{Profitability}
\index[key]{Willingness}
\end{document}