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Factors Affecting Commercial Bank Lending to Agriculture

Published online by Cambridge University Press:  28 April 2015

Eustacius N. Betubiza  and
David J. Leatham
Eustacius N. Betubiza
Affiliation:
World Bank, Washington, D.C.
David J. Leatham
Affiliation:
Texas A&M University, College Station, Texas
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Abstract

A tobit econometric procedure was used to examine the effect of selected demand and supply factors on nonreal estate agricultural lending by commercial banks in Texas. Results show that banks have reduced their agricultural loan portfolios in response to increased use of interest sensitive deposits after deregulation. Moreover, almost half of this decrease came from banks that stopped making agricultural loans. Also, results show that banks affiliated with multi-bank holding companies lend less money to agriculture relative to their assets than do independent banks.

Keywords

agricultural lendingcommercial banksderegulationtobit
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 27 , Issue 1 , July 1995 , pp. 112 - 126
Copyright
Copyright © Southern Agricultural Economics Association 1995

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