Lending limits and the availability of credit to agricultural borrowers

摘要: Over the past three decades, market share of farm debt owed to commercial banks has declined sharply. One potential reasons for loss in is related legal lending limits on maximum that can loan individual borrowers;The purpose this study twofold: (1) develop a simple theoretical model incorporates and investigates effect availability credit agricultural borrowers; (2) provide empirical evidence phenomenon;In development model, an excess demand equation formed, which effects such factors as average size prices paid received by sector are investigated. To empirically test these variables demand, statistical developed modifies employing banks' responses survey undertaken Federal Reserve Bank Chicago concerning limits. The question posed asked: "Compared five years ago (end 1974 compared end 1979), number actual or customers your area whose needs exceed bank's limit higher, lower, unchanged?";Bank response then used 0, 1 dependent variable (0 if less, no change customers, more customers) regressed eligible capital account, serviced rural bank, value products sold production expenses utilization capacity farmland dummy bank type see differences exist between unit branch banks;The results show account highly significant explaining response. agricultural-production-expenses also found be significantly response, but none other reflecting requirements significant.