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Racial Minority Lending Trends at the Farm Service Agency

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  • Escalante, Cesar L.
  • Epperson, James E.
  • Stegelin, Forrest E.
  • Brooks, Rodney L.

Abstract

A binomial logistic framework is used to determine important linkages between the FSA's decision on each loan application and the applicants financial and demographic attributes. Using data on both rejected and accepted FSA loan applications, empirical results indicate loan approval decisions were not significantly influenced by the borrowers' racial class and that, in contrast to the credit risk assessment standards employed by commercial lenders, the collective influence of more stringent and objective credit scoring measures on FSA loan approval decisions is insignificant.

Suggested Citation

  • Escalante, Cesar L. & Epperson, James E. & Stegelin, Forrest E. & Brooks, Rodney L., 2005. "Racial Minority Lending Trends at the Farm Service Agency," 2005 Annual meeting, July 24-27, Providence, RI 19562, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19562
    DOI: 10.22004/ag.econ.19562
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    References listed on IDEAS

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    1. Ellinger, Paul N. & Gustafson, Cole R. & Hanson, Gregory D. & LaDue, Eddy L. & Barry, Peter J. & Splett, Nate & Hanson, Steven D., 1991. "Credit Evaluation Procedures at Agricultural Banks," 1991 Regional Committee NC-161, September 23-24, 1991, St. Louis, Missouri 130939, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    2. Farmers Home Administration, 1988. "A Brief History of Farmers Home Administration," USDA Miscellaneous 330079, United States Department of Agriculture.
    3. Gustafson, Cole R. & Beyer, Ronald J. & Saxowsky, David M., 1991. "Credit Evaluation: Investigating the Decision Process of Agricultural Loan Officers," 1991 Regional Committee NC-161, September 23-24, 1991, St. Louis, Missouri 130940, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    4. Bester, Helmut, 1985. "Screening vs. Rationing in Credit Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 75(4), pages 850-855, September.
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