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|Title: ||Relationship Lending and Denovo Banks: An examination of Bank Lending to Small Farm Borrowers|
|Authors: ||Akhavein, Jalal|
Goldberg, Lawrence G.
White, Lawrence J.
|Issue Date: ||10-Jan-2002|
|Series/Report no.: ||EC-02-04|
|Abstract: ||In this paper we examine the lending by small banks to small farms. We find that relationships, as measured by the length of tenure of farm operators, are positively related to bank lending. We also find that denovo banks have a positive tendency to lend to small farms, similar to the tendency of denovo banks to lend to small businesses generally. When existing relationships
between borrowers and incumbent lenders are stronger, however, denovo banks have greater
difficulties in lending to small farms. Finally, we find that, even within the category of small banks, lending to small farms (as a percentage of a bank's assets) tends to decrease as the bank increases in
size. We believe that small farms are a category of small enterprises that have been underresearched in the lending literature and that further study of these relationships would yield new and interesting results.|
|Appears in Collections:||Economics Working Papers|
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