ISSN 2394-5125
 

Research Article 


Factors affecting the probability of defaulting facilities of Melli Bank's agricultural legal clients (case study: Provinces of Khorasan(

Javid Karimzadeh, Mahmoud SabouhiSabouni, Hossein Mohammadi, Mahmoud DaneshvarKakhki, Mohammad Ghorbani.

Abstract
This study aims to investigate determinants of the probability of default on agricultural facilities granted to 286
companies during the years 2007 to 2017. Logit, Probit, and C-Log-Log models have been used for this purpose.
The variables included the relevance of the CEO’s field of study; a single beneficiary company, domestic production
of raw materials and Altman Z- score or company’s financial strength. The results reveal the high validity and
strength of the Probit model, as it can predict and classify observations with high probability of default with 96%
accuracy and observations with low probability of default with 92% accuracy, which can demonstrate the validity of
the model. The results also show that the probability of default is chiefly affected by a company’s financial strength.
Therefore, in order to significantly reduce the probability of default in repayment of the facilities granted by
customers, greater attention should be allocated to the financial strength of companies at the time of granting
facilities.

Key words: default of facilities Logit model, Probit model, C-Log-Log model, Financial strength, Bank Melli


 
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How to Cite this Article
Pubmed Style

Javid Karimzadeh, Mahmoud SabouhiSabouni, Hossein Mohammadi, Mahmoud DaneshvarKakhki, Mohammad Ghorbani. Factors affecting the probability of defaulting facilities of Melli Bank's agricultural legal clients (case study: Provinces of Khorasan(. JCR. 2021; 8(2): 1078-1086. doi:10.31838/jcr.08.02.111


Web Style

Javid Karimzadeh, Mahmoud SabouhiSabouni, Hossein Mohammadi, Mahmoud DaneshvarKakhki, Mohammad Ghorbani. Factors affecting the probability of defaulting facilities of Melli Bank's agricultural legal clients (case study: Provinces of Khorasan(. http://www.jcreview.com/?mno=81473 [Access: May 16, 2021]. doi:10.31838/jcr.08.02.111


AMA (American Medical Association) Style

Javid Karimzadeh, Mahmoud SabouhiSabouni, Hossein Mohammadi, Mahmoud DaneshvarKakhki, Mohammad Ghorbani. Factors affecting the probability of defaulting facilities of Melli Bank's agricultural legal clients (case study: Provinces of Khorasan(. JCR. 2021; 8(2): 1078-1086. doi:10.31838/jcr.08.02.111



Vancouver/ICMJE Style

Javid Karimzadeh, Mahmoud SabouhiSabouni, Hossein Mohammadi, Mahmoud DaneshvarKakhki, Mohammad Ghorbani. Factors affecting the probability of defaulting facilities of Melli Bank's agricultural legal clients (case study: Provinces of Khorasan(. JCR. (2021), [cited May 16, 2021]; 8(2): 1078-1086. doi:10.31838/jcr.08.02.111



Harvard Style

Javid Karimzadeh, Mahmoud SabouhiSabouni, Hossein Mohammadi, Mahmoud DaneshvarKakhki, Mohammad Ghorbani (2021) Factors affecting the probability of defaulting facilities of Melli Bank's agricultural legal clients (case study: Provinces of Khorasan(. JCR, 8 (2), 1078-1086. doi:10.31838/jcr.08.02.111



Turabian Style

Javid Karimzadeh, Mahmoud SabouhiSabouni, Hossein Mohammadi, Mahmoud DaneshvarKakhki, Mohammad Ghorbani. 2021. Factors affecting the probability of defaulting facilities of Melli Bank's agricultural legal clients (case study: Provinces of Khorasan(. Journal of Critical Reviews, 8 (2), 1078-1086. doi:10.31838/jcr.08.02.111



Chicago Style

Javid Karimzadeh, Mahmoud SabouhiSabouni, Hossein Mohammadi, Mahmoud DaneshvarKakhki, Mohammad Ghorbani. "Factors affecting the probability of defaulting facilities of Melli Bank's agricultural legal clients (case study: Provinces of Khorasan(." Journal of Critical Reviews 8 (2021), 1078-1086. doi:10.31838/jcr.08.02.111



MLA (The Modern Language Association) Style

Javid Karimzadeh, Mahmoud SabouhiSabouni, Hossein Mohammadi, Mahmoud DaneshvarKakhki, Mohammad Ghorbani. "Factors affecting the probability of defaulting facilities of Melli Bank's agricultural legal clients (case study: Provinces of Khorasan(." Journal of Critical Reviews 8.2 (2021), 1078-1086. Print. doi:10.31838/jcr.08.02.111



APA (American Psychological Association) Style

Javid Karimzadeh, Mahmoud SabouhiSabouni, Hossein Mohammadi, Mahmoud DaneshvarKakhki, Mohammad Ghorbani (2021) Factors affecting the probability of defaulting facilities of Melli Bank's agricultural legal clients (case study: Provinces of Khorasan(. Journal of Critical Reviews, 8 (2), 1078-1086. doi:10.31838/jcr.08.02.111