Effects of commercial bank structure and other characteristics on agricultural lending

A case loan request methodology evaluated how changes in commercial banking structure are influencing credit availability and terms for selected farm business types. Tobit and OLS regressions were used to assess bank characteristic effects on loan amount and rate, and a paired comparisons approach evaluated credit term differences among borrower types. Loan amounts were not significantly influenced by bank characteristics, and loan rates were significantly affected by bank characteristics sporadically. Some differentiation in credit terms among the demographic groups occurred. These results showed no overwhelming evidence in favor of or against the trend toward commercial bank consolidation as it impacts agricultural lending.