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An Analysis Of Factors That Affect The Quality Of Federal Land Bank Loans

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  • Hardy, William E., Jr.
  • Spurlock, Stanley R.
  • Parrish, Donnie R.
  • Benoist, Lee A.

Abstract

Financial conditions existing in agriculture are placing severe pressure on lenders as well as borrowers. Data from both good and foreclosed Federal Land Bank loans were analyzed to determine the most important characteristics leading to the failure of loans. The analysis was completed by comparing means through t-tests and the development of a discriminant model. The ratio of total debt service to total income, the debt to asset ratio, the ratio of total loan amount to appraised value, and the ratio of acres in security to acres owned were determined to be the most important discriminating variables.

Suggested Citation

  • Hardy, William E., Jr. & Spurlock, Stanley R. & Parrish, Donnie R. & Benoist, Lee A., 1987. "An Analysis Of Factors That Affect The Quality Of Federal Land Bank Loans," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 19(2), pages 1-8, December.
    • Handle: RePEc:ags:sojoae:30200
    DOI: 10.22004/ag.econ.30200
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    File URL: https://ageconsearch.umn.edu/record/30200/files/19020175.pdf
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    References listed on IDEAS

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    1. Johnson, R. Bruce & Hagan, Albert R., 1973. "Agricultural Loan Evaluation with Discriminant Analysis," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 5(2), pages 57-62, December.
    2. Hardy, William E. & Weed, Johno B., 1980. "Objective Evaluation for Agricultural Lending," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 12(1), pages 159-164, July.
    3. Hardy, William E., Jr. & Weed, Johno B., 1980. "Objective Evaluation For Agricultural Lending," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 12(1), pages 1-6, July.
    4. Johnson, R. Bruce & Hagan, Albert R., 1973. "Agricultural Loan Evaluation With Discriminant Analysis," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 5(2), pages 1-6, December.
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    Cited by:

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    2. Novak, Michael P. & LaDue, Eddy L., 1997. "Introducing Recursive Partitioning To Agricultural Credit Scoring," Working Papers 127878, Cornell University, Department of Applied Economics and Management.
    3. Babetskaya, Lyubov, 2001. "Enhancing The Performance Of Risk-Rating Models At Community Banks," 2001 Annual meeting, August 5-8, Chicago, IL 20690, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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    Keywords

    Agricultural Finance;

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