RECOMMENDATIONS

Based on the analysis, I recommend approving the loan for an amount of 10,000.00, which is a slightly lower amount than the applied loan amount of 13,000.00. This is to ensure that the farmer has a manageable debt-to-income ratio and can repay the loan comfortably.

ANALYSIS

The farmer has applied for a loan of 13,000.00, expecting an estimated profit of 34,000.00. To analyze the loan application, I will review the crop data provided.

Crop Yields

The yield per hectare for maize in 2013 was 355.00, in 2014 was 370.00, and in 2015 was 400.00. This shows an increasing trend in yield per hectare, which is a positive indicator.

Loss Data

There is no explicit loss data provided. However, considering the increasing trend in yield per hectare, it can be assumed that the farmer has a good crop management practice in place, which reduces the risk of crop loss.

Crop Insurance

There is no information provided about crop insurance. It is recommended that the farmer considers purchasing crop insurance to mitigate the risk of crop failure or loss due to natural disasters or other factors.

Revenue Analysis

The estimated profit of 34,000.00 seems reasonable, considering the increasing trend in yield per hectare and average selling prices. However, to ensure a comfortable debt-to-income ratio, I recommend approving a loan amount that is slightly lower than the applied amount.

Risk Assessment

Based on the analysis, I assess the risk of loan default as moderate. The increasing trend in yield per hectare and estimated profit are positive indicators. However, the lack of crop insurance and loss data may pose some risk. By approving a slightly lower loan amount, we can mitigate this risk and ensure that the farmer can repay the loan comfortably.