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Agricultural Bank of Islamic Republic of Iran- the main institution of formal agricultural credit supply in Iran - is responsible for providing financial resources for the agricultural sector. A main part of financial resources of Agricultural Bank comes via recovery of the overdue granted credits. Timely recovery of the credits is very crucial for viability of the Agricultural Bank. Therefore, it becomes necessary for the managers of the bank to know the factors affecting agricultural credit repayment performance to adopt further suitable policies. To achieve this goal, the present study was performed using data obtained, through filling questionnaires, from a sample of 149 farmers who had previously received credit from Agricultural Bank, in the province of
Birjand. The sample was selected by using a two stage random sampling method. Discriminant analysis method was used to discriminate the defaulters from nondefaulters. The results indicated that use of machinery, length of repayment period, bank supervision on the use of loan, and using of loan in current activities had significant and positive effects on the agricultural credit repayment performance. On the
other hand, incidence of natural disasters (e. g. droughts, and diseases), higher level of
education of the recipient of loan, and length of waiting time for loan reception had a significant and negative effect on the agricultural credit repayment performance.
Finally, based on the conclusions obtained, several policy oriented recommendations were made.