Study of Causes and Strategy Determination for Solving the Problem of Non-Performing Debt: A Case Study of the Bank for Agriculture and Agricultural Cooperatives, Chiang Khong Branch

Abstract

This study aimed to investigate the causes of overdue debt among customers to design effective strategies and guidelines for addressing debt issues, with a particular focus on improving the management of non-performing loans at the Agricultural Bank and Cooperative Bank, Chiang Khong Branch, Chiang Rai Province. Through a survey of 240 customers with overdue debts and interviews with 12 individuals, the research identifies those external factors such as epidemic outbreaks, rising commodity prices, economic downturns, increased production costs, and natural disasters are the primary causes of overdue debts. Internal factors contributing to this issue include higher household expenses, decreased income, and external debt burdens. Additionally, internal banking factors such as inadequate debt follow-up by staff, improper credit assessment, and insufficient credit limits are significant contributors. Interviews revealed that customers' incomes have declined due to higher production costs and natural disasters, leading to increased expenses from unemployment within households. Although customers are willing to repay their debts, their financial capacity is limited by various expenses. For debt management strategies at the Agricultural Bank Chiang Khong Branch, two approaches are suggested: proactive strategies involving precise target group planning and systematic follow-up processes, with performance evaluations aligned with the bank's objectives, and reactive strategies focusing on updating information for incoming staff, allowing for better customer communication, reducing follow-up times, and enhancing credit assessment accuracy. Both strategies align with the bank's and the Agricultural Bank Chiang Khong Branch's goals.

Keywords: Causes of Overdue Debt, Repayment Capacity, Non-Performing Loans