Analysis of Operational Risk Factors in Agricultural Loans in the province of Panama: A Quantitative and Qualitative Study.

Abstract

Background: The agricultural sector in Panama plays a crucial role in food security and rural development.  The Agricultural Development Bank (BDA), as a key financial institution, provides agricultural loans to boost the sector.  However, operational risk represents a significant challenge for the BDA in its agricultural loan portfolio.  Objective: Analyze the operational risk in BDA agricultural loans in the province of Panama.  Design and Methods: To carry out an in-depth analysis of the operational risk in the BDA's agricultural loans in the province of Panama, a comprehensive methodology was implemented that included a survey of BDA clients, analysis of historical credit data and interviews with experts in credit management.  The information was analyzed quantitatively and qualitatively.  Results: BDA clients perceive a significant operational risk associated with agricultural loans.  Most clients have positive experiences with BDA agricultural loans, but there is room for improvement.  Experts identified adverse weather conditions, price fluctuations of agricultural products, pests and diseases, poor financial management by borrowers and deficiencies in credit risk assessment as the main operational risk factors.  Conclusions: The BDA faces challenges in managing operational risk in its agricultural loans.  The implementation of strategic measures adapted to your context, after a detailed risk analysis and a plan aligned with your strategy, will strengthen your financial position, protect the profitability of the agricultural portfolio and contribute to the sustainable development of the agricultural sector in the province of Panama.