Factors influencing borrowers’ preferences for lenders

Abstract

Data from a survey of Midwest producers are used to examine the credit source decisions of farm borrowers. The lender attributes preferred by producers are identified in terms of their importance in selecting credit providers. The influence of farm business information on farmers= interest rate sensitivity and loyalty is investigated. Regression results indicate that patrons of the Farm Credit System are more likely to be highly price sensitive. Furthermore, the likelihood for strong borrower loyalty is found to be higher for smaller, less leveraged, and more tenured farms and by those who source financing from bank institutions.

Citation

Farley, T.A. and Ellinger, P.N. (2007), "Factors influencing borrowers’ preferences for lenders", Agricultural Finance Review, Vol. 67 No. 2, pp. 211-223. https://doi.org/10.1108/00214660780001205