Abstract:
Obtaining and repaying loans are inseparable from a farmer’s life. This study tries to analyze the factors
that influence commercial banks' agriculture loan repayment of the paddy farmers and to know the
prevailing status of loan repayment in the war-torn Poonakary Divisional Secretariat in Kilinochchi
district. The study attempts to fill the gap in the literature on the association of income and other
demographic, and social factors with loan repayment in the research area as loan defaults are reported in
this region, though one decade has lapsed after the war. Data were randomly collected from 100
families, (where the head of the household is a paddy farmer and obtained paddy agriculture loans
from the Bank of Ceylon) through questionnaires and interviews in February – March 2021. Correlation
analysis was applied to check the association and the LOESS line was fitted to observe the type of
relationship; in addition, central tendency measures and graphical descriptions profiled the research
problem and helped to answer the research questions. Through the mixed method, the research found
the factors that influence the agriculture loan repayment of the paddy farmers in the research area are
mainly farmers’ income, but it varies among income levels; in addition individual factors namely,
farmers’ attitudes, age, and experience moderate the loan amount and thereby the repayment; whereas,
a number of dependents and the cost incurred by them negatively affect the loan repayment. In
parallel, bank-related factors or lender behavior- measured through bank employees’ attitudes- play a
major role in resettlement as it creates mental agony among farmers.
