This paper analyzes farmer decisions regarding acceptance and repayment of agricultural credit in Lombok, Indonesia. A survey was conducted during July 2001- March 2002 in Central Lombok, where the current KKP government credit scheme is provided to agricultural producers. Three villages within the regency were sampled, representing various repayment rates of government credit. Data were collected using face-to-face, semi-structured interviews with 65 farmers who had made use of government or other sources of agricultural credit. Capital possession was found to be the starting point for farmers' decision-making in relation to credit use. As long as farmers had their own capital, they tended to avoid using credit, perceiving that credit from any source was risky. Farmers preferred to apply for government credit, rather than from private sources, because it had lower interest rates, a more suitable repayment schedule, and was considered less risky. In some situations however, private credit was preferred because of its simplicity and instant availability. In credit repayment, farmers' behavior was strongly influenced by their capability, character, and motivations, and these factors could be inter-connected. The findings have some implications for credit distribution, monitoring, repayment collection, and education and extension for clients.