Causes and Solutions of Problem of Farmers Loan Customers Who are Unable to Repay Their Loans as Scheduled of Bank T, Branch 11

Abstract

Studying causes and solutions to problem of  farmers loan customers who are unable to repay their loans as scheduled of Bank T, Branch 11 aims to investigate reason why the borrowers are unable to repay their debts on time resulting in an increase in amount of non- performing loan (NPL) of branch 11. To find out why customers can’t pay their debts on time impact on debt dose not generate increased NPL revenue of 11 branches. Data were collected from the sample of 400 persons, interviewing 19 employees and relevant customers. Based on the analysis, the reasons why customers could not make loan payment on time came from 3 factors, namely, external factors like economic situation, unstable government, climate change effects and pests, and crop price decline, which had a great effect. Internal factors include high interest, inappropriate loan amount, inappropriate installment period, installment payment per time was not appropriate, which had a moderate effect. Personal factors include reduced income, higher household expenses and increasing costs in agriculture, misuse of loan, informal debt, which had a high level of effect. A solution guideline is improving the structure of debt with a preventive method (Pre-emptive) by solving problems before NPL occurs; extending the payment due date, adjusting payment schedule to meet customers’ income, making the bank have reserve by 1% of the loan amount.to meet customers’ income, making the bank have reserve by 1% of the loan amount.