scholarly journals LOOKING BEYOND FARM LOAN APPROVAL DECISIONS: LOAN PRICING AND NONPRICING TERMS FOR SOCIALLY DISADVANTAGED FARM BORROWERS

2017 ◽  
Vol 50 (1) ◽  
pp. 129-148 ◽  
Author(s):  
CESAR L. ESCALANTE ◽  
ADENOLA OSINUBI ◽  
CHARLES DODSON ◽  
CARMINA E. TAYLOR
Keyword(s):  
Interest Rates ◽  
Minority Groups ◽  
Service Agency ◽  
Loan Pricing ◽  
Credit Risks ◽  
Socially Disadvantaged ◽  
Lending Decisions ◽  
And Gender ◽  
Farm Service Agency ◽  
Loan Approval

AbstractThis study utilizes Farm Service Agency lending data to verify if previous racial and gender bias allegations still persist in more recent lending decisions. Beyond loan approval decisions, this study focuses on trends in direct loan packaging terms for approved single proprietorship farm borrowers. Results indicate that although no significant disparities were noted in loan amounts and maturities prescribed for various racial and gender minority groups, nonwhite male and female borrowers were usually charged higher interest rates than the others. Loan pricing differentials could have been the lenders' strategy for price management of borrowers' credit risks.

Do farm service agency borrowers' double minority labels lead to more unfavorable loan packaging terms?

2020 ◽  
Vol 80 (5) ◽  
pp. 633-646
Author(s):  
Jyotsna Ghimire ◽  
Cesar L. Escalante ◽  
Ramesh Ghimire ◽  
Charles B. Dodson
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Simulation Optimization ◽  
Service Agency ◽  
Institutional Reforms ◽  
Content Type ◽  
Loan Terms ◽  
And Gender ◽  
Farm Service Agency ◽  
Double Minority

PurposeThis study adds a new dimension in the study of racial and gender bias in farm lending. Most previous studies analyzed the separate effects of race and gender attributes on loan approval decisions. The analysis focuses on the stipulation of loan terms (loan amount, interest rate and maturity) among approved farm loan applications. The time period analyzed spans from 2004 until 2014 during which the government has undertaken reforms to improve delivery of loan services to its clientele of minority farmers. Thus, this study's findings could help validate the effectivity of such institutional reforms affecting Farm Service Agency (FSA) lending operations.Design/methodology/approachThis study utilizes a national direct loan origination data from the FSA of the U.S. Department of Agriculture (USDA) collected from 2004 to 2014. The analysis begins by identifying significant differences in cross-tabulations of loan terms among different racial and gender classes. Seemingly unrelated regression (SUR) regression techniques are then applied for a system of equations involving the three loan packaging components. The combined effects of the prescribed loan packaging terms are subsequently analyzed under a simulation-optimization framework.FindingsRegression results validate that indeed, relative to White American borrowers, certain minority borrowers are accommodated with lower loan amounts at higher interest rates and with shorter maturities. However, these decisions seem to be prompted by credit risk management considerations. The most compelling findings include the insignificance of all double minority labeling variables, except for the interest rate equation that even produced favorable results for Hispanic American females. Simulation-optimization results further reinforce that even when one or two unfavorable loan terms are included in the packaging, double minority borrowers end up with better profitability and liquidity positions.Practical implicationsThis study provides a different perspective in dealing with the controversial minority bias in lending by presenting evidence gathered from a government farm lending institution. The USDA-FSA has been sued in numerous occasions by minority borrowers. Since then, however, it has deliberately implemented institutional reforms to rectify previous errors. This study provides empirical evidence strengthening FSA's claim of its intention to improve its delivery of loan services, especially for its socially disadvantaged borrowers with double minority classification.Originality/valueThis study pioneers the analysis of the double minority labeling effect on farm lending decisions. Its contributions to literature are further enhanced by its goal to validate the effectiveness of FSA institutional reforms undertaken since the early 2000s in order to improve credit access of and delivery of credit services to minority farm borrowers, especially those that belong to more than one minority classification.

scholarly journals Credit Risk Assessment and Racial Minority Lending at the Farm Service Agency

2006 ◽  
Vol 38 (1) ◽  
pp. 61-75 ◽  
Author(s):  
Cesar L. Escalante ◽  
Rodney L. Brooks ◽  
James E. Epperson ◽  
Forrest E. Stegelin
Keyword(s):  
Risk Assessment ◽  
Credit Risk ◽  
Credit Scoring ◽  
Convincing Evidence ◽  
Class Action ◽  
Service Agency ◽  
Credit Risk Assessment ◽  
Black Farmers ◽  
Farm Service Agency ◽  
Loan Approval

The nature of credit risk assessment and basis of loan approval decisions of the Farm Service Agency are analyzed in the aftermath of the black farmers' 1997 class action suit against the U.S. Department of Agriculture. This study did not uncover convincing evidence of racial discrimination against nonwhite borrowers under a binomial logistic framework based on the probability of a loan application's approval. Moreover, the collective use of more stringent and objective credit-scoring measures usually employed by commercial lenders is less evident in the Farm Service Agency's evaluation of loan applications.

Beginning farmer and rancher credit usage by socially disadvantaged status

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bruce L. Ahrendsen ◽  
Charles B. Dodson ◽  
Gianna Short ◽  
Ronald L. Rainey ◽  
Heather A. Snell
Keyword(s):  
Census Data ◽  
White Men ◽  
Service Agency ◽  
Upper Midwest ◽  
Agricultural Credit ◽  
Content Type ◽  
Alaskan Native ◽  
Socially Disadvantaged ◽  
The Us ◽  
Farm Service Agency

PurposeThe purpose of this paper is to examine credit usage by beginning farmers and ranchers (BFR). BFR credit usage is stratified by location (state) and by socially disadvantaged farmer and rancher (SDFR, also known as historically underserved) status. SDFR groups are defined to include women; individuals with Hispanic, Latino or Spanish Origin; individuals who identify as American Indian or Alaskan Native, Black or African American, Asian, Native Hawaiian or other Pacific Islander. Non-SDFR is defined as individuals who identify as non-Hispanic, White men.Design/methodology/approachThe US Department of Agriculture’s Census of Agriculture, Agricultural Resource Management Survey (ARMS) is linked with Farm Service Agency (FSA) loan program administrative data to estimate shares of BFR operations using FSA credit. Census data provided information on population changes in total farms and BFR operations from 2012 to 2017 which are compared by SDFR status.FindingsResults reveal differences among BFR operations active in agricultural credit markets by SDFR status and state. BFR were more common among SDFR groups as well as in regions where farms tend to be smaller, such as the Northeast, compared to a more highly agricultural upper Midwest. Among BFR, non-SDFR are more likely to utilize credit than SDFR, however, FSA appeared to be crucial in enabling BFR and especially beginning SDFR groups to access loans.Originality/valueThe results are timely and of keen interest to researchers, industry and policymakers and are expected to assist in developing and adjusting policies to effectively promote and improve BFR success in general and for beginning SDFR groups.

Loan officer rotation and credit access: evidence from Madagascar

2019 ◽  
Vol 80 (1) ◽  
pp. 51-67
Author(s):  
Yaw Sarfo ◽  
Oliver Musshoff ◽  
Ron Weber
Keyword(s):  
Rural Areas ◽  
Urban Areas ◽  
Frequency Effect ◽  
Content Type ◽  
Credit Access ◽  
Loan Officer ◽  
Microfinance Institution ◽  
Lending Decisions ◽  
Loan Officers ◽  
Loan Approval

Purpose With exclusive data from a commercial microfinance institution (MFI) in Madagascar, the purpose of this paper is to investigate if loan officer rotation (change of loan officer) has an effect on credit access (loan approval) in rural and in urban areas. The authors further analyze how the frequency of loan officer rotation affects credit access in rural and in urban areas. Design/methodology/approach The authors apply propensity score matching to compare credit access between loan applicants who experienced loan officer rotation and loan applicants who experienced no loan officer rotation in rural and in urban areas. Findings Results show that loan officer rotation has a positive and statistically significant effect on credit access. The authors observe further that loan officer rotation has a different effect on credit access in rural and in urban areas. Whilst rural loan applicants who experienced loan officer rotation are more likely to have credit access, urban loan applicants show no statistically significant effect of loan officer rotation on credit access. For the frequency effect on credit access, the authors observe that one loan officer rotation has a positive and statistically significant effect on credit access whereas results are mixed for two loan officer rotations. Research limitations/implications Even though the authors can show that loan officer rotation can improve credit access to loan applicants, especially in rural areas, the conditions in Madagascar are unique. Therefore, results need to be verified in other countries and institutional contexts. Practical implications From the perspective of MFI, the authors recommend that the management of MFI needs to provide better tools to loan officers to improve on the evaluation of agricultural loan products or standardize the assessment of agricultural loan products to improve on lending decisions. Further, if applicable, the authors recommend that MFI should consider using credit worthiness assessment procedures which rely less on loan officer’s judgment for loan evaluation, such as automated systems. From the perspective of loan applicants, the authors recommend that loan applicants should request for a change of loan officer if they experience successive loan applications rejection. Originality/value To the authors’ knowledge, this paper is the first to provide empirical evidence on the effect and frequency of loan officer rotation on credit access in Sub-Sahara Africa, and Madagascar, in particular.

scholarly journals Methodology and Models for Individuals’ Creditworthiness Management Using Digital Footprint Data and Machine Learning Methods

Mathematics ◽  
2021 ◽  
Vol 9 (15) ◽  
pp. 1820
Author(s):  
Ekaterina V. Orlova
Keyword(s):  
Interest Rates ◽  
Additional Data ◽  
Risk Level ◽  
Gradient Boosting ◽  
Cluster Number ◽  
New Approach ◽  
Credit Risks ◽  
Stochastic Gradient Boosting ◽  
The Stability ◽  
Digital Footprints

This research deals with the challenge of reducing banks’ credit risks associated with the insolvency of borrowing individuals. To solve this challenge, we propose a new approach, methodology and models for assessing individual creditworthiness, with additional data about borrowers’ digital footprints to implement comprehensive analysis and prediction of a borrower’s credit profile. We suggest a model for borrowers’ clustering based on the method of hierarchical clustering and the k-means method, which groups actual borrowers having similar creditworthiness and similar credit risks into homogeneous clusters. We also design the model for borrowers’ classification based on the stochastic gradient boosting (SGB) method, which reliably determines the cluster number and therefore the risk level for a new borrower. The developed models are the basis for decision making regarding the decision about lending value, interest rates and lending terms for each risk-homogeneous borrower’s group. The modified version of the methodology for assessing individual creditworthiness is presented, which is to reduce the credit risks and to increase the stability and profitability of financial organizations.

Social inequalities in overweight and obesity in 26 European countries

2020 ◽  
Vol 30 (Supplement_5) ◽  
Author(s):  
R Charafeddine ◽  
S Demarest ◽  
S Drieskens ◽  
F Renard
Keyword(s):  
Weight Status ◽  
Social Inequalities ◽  
Linear Models ◽  
Overweight And Obesity ◽  
Consistent Pattern ◽  
European Countries ◽  
Reverse Inequality ◽  
Socially Disadvantaged ◽  
And Gender ◽  
Low Educated

Abstract Background Previous studies have shown inequalities in overweight and obesity in disfavor of the socially disadvantaged groups. This study examines the extent of these inequalities in 26 European countries. Methods Data from the 2017 EU Statistics on Income and living Conditions (EU-SILC) were used (18 years and older, n = 482,595). A body mass index of 25.0 to 29.9 kg/m2 was classified as overweight and 30.0 and more as obese. Educational level (EL) was used as socioeconomic indicator. Generalized linear models were fitted to compute low-versus high absolute (RD) and relative (RR) inequality. Absolute inequality amplitude (RDA) was calculated as RD/Prevalence. Results Among men, average EU inequalities for overweight were slightly in disfavor of the low educated (RR = 1.05, RDA=5%). A mixed inequality pattern was observed across countries, as the risk of overweight was higher among high educated men in most Eastern countries, in contrast to other parts of Europe (RR from 0.74 to 1.19, RDA from -27% to 20%). Male obesity showed more pronounced inequalities (RR = 1.22, RDA=18%), and a consistent pattern of higher risk among the low educated and wide variation across countries (RR from 1.20 to 2.18, RDA from 16% to 49%). Among women, significant inequalities in overweight were observed (RR = 1.23, RDA=21%), with a consistent pattern of higher risk among the lowest EL, and substantial variation across countries (RR from 1.06 to 1.53, RDA from 7% to 36%). Inequalities were even larger for female obesity, with average RR and RDA reaching 1.49 and 35%, and wider variation (RR from 1.35 to 2.77, RDA from 12% to 88%). Conclusions Social inequalities in weight status are widespread in Europe, but vary substantially between countries. Inequalities are larger among women. For male overweight, a reverse inequality is observed in most Eastern countries. This study allows countries to benchmark the inequalities observed nationally to the situation in other EU countries. Key messages Social inequalities in weight status are widespread in Europe. The pattern of social inequalities in overweight and obesity varies substantially by country and gender.

scholarly journals 979. Disparities in PrEP uptake and adherence among cisgender women using a pharmacologic measure

2020 ◽  
Vol 7 (Supplement_1) ◽  
pp. S517-S518
Author(s):  
Shane Hebel ◽  
Elijah Kahn-Woods ◽  
Casper Enghuus ◽  
Helen Koenig ◽  
Linden Lalley-Chareczko ◽  
...  
Keyword(s):  
Real World ◽  
Minority Groups ◽  
Hiv Infections ◽  
Urine Samples ◽  
Real World Data ◽  
Women And Gender ◽  
Gender Minority ◽  
Adherence Data ◽  
And Gender ◽  
Exposure Prophylaxis

Abstract Background HIV pre-exposure prophylaxis (PrEP) is 99% effective at preventing new HIV infections if taken daily. To be successful, PrEP requires concurrent efforts to optimize uptake, persistence, and adherence. In 2018, cisgender (cis) women accounted for 19% of new HIV infections in the US but comprised only 7% of all PrEP users. Studies show poor PrEP adherence amongst cis women, but there is a paucity of real-world clinical data describing PrEP adherence among cis women and gender minority people. Methods An adherence test that measures the concentration of tenofovir in urine samples using a liquid chromatography mass spectrometry (LC-MS/MS) was used to assess recent PrEP adherence at 8 clinics. Urine samples were collected during routine visits and analyzed using the LC-MS/MS assay. Test results were retrospectively paired with gender data, when available, and sex assigned at birth (SAAB) data. Adherence data were aggregated and analyzed to assess non-adherence proportions by sub-population. Results Gender data were available from 1,461 patients at 5 clinics, 1,344 (92%) of whom were cis males (Figure 1). From the 5 clinics where gender and SAAB data were available, 3,835 tests were conducted and 517 (13.5%) indicated non-adherence (Figure 2). 3 additional clinics conduct routine adherence testing and collect SAAB data (gender data not available). At these 8 clinics, SAAB data were available for 2,773 PrEP patients, totaling 5,602 urine tests (Figure 3). Among these 5,602 adherence tests, 813 (14.5%) indicated non-adherence (Figure 4). SAAB females demonstrated significantly higher non-adherence than SAAB males (22% vs 14%, p< 0.001). Across clinics, 89%-98% of PrEP patients are SAAB male (Figure 5). Within these 8 clinics, SAAB female demonstrated consistently higher non-adherence (17%-44%, vs 12%-17% for SAAB males) (Figure 6). Figures 1 and 2 Figures 3 and 4 Figures 5 and 6 Conclusion Real-world data align with nationwide trends in PrEP utilization and show that the majority of PrEP patients are cis men. When initiated on PrEP, cis women exhibit higher rates of non-adherence than cis men. These data underscore the need to collect gender-identity data to monitor PrEP disparities and suggest that greater efforts are needed to target PrEP access, utilization, and accompanying support services to cis women and gender minority groups. Disclosures All Authors: No reported disclosures

scholarly journals A practical guide to the analysis of non-response and attrition in longitudinal research using a real data example

2018 ◽  
Vol 43 (1) ◽  
pp. 24-34 ◽  
Author(s):  
Nora L. Eisner ◽  
Aja L. Murray ◽  
Manuel Eisner ◽  
Denis Ribeaud
Keyword(s):  
Minority Groups ◽  
Longitudinal Research ◽  
Real Data ◽  
Initial Study ◽  
Group Differences ◽  
Parental Consent ◽  
Significant Group ◽  
Immigrant Background ◽  
Socially Disadvantaged ◽  
Study Recruitment

Selective non-participation and attrition pose a ubiquitous threat to the validity of inferences drawn from observational longitudinal studies. We investigate various potential predictors for non-response and attrition of parents as well as young persons at different stages of a multi-informant study. Various phases of renewed consent from parents and young persons allowed for a unique comparison of factors that drive participation. The target sample consisted of 1675 children entering primary school at age seven in 2004. Seven waves of interviews, over the course of 10 years, measured levels of problem behavior as rated by children, parents, and teachers. In the initial study recruitment, where participation was driven by parental consent, non-response was highest amongst certain socially disadvantaged immigrant minority groups. There were fewer significant group differences at wave 5, when young people could be directly recruited into the study. Similarly, attrition was higher for some immigrant background groups. Methodological implications for future analyses are discussed.

scholarly journals Towards establishing biographical and business background profiles of entrepreneurs from two ethnic and gender groups

1995 ◽  
Vol 21 (3) ◽  
Author(s):  
J. L. Schutte ◽  
A. B. Boshoff ◽  
H. F. Bennett
Keyword(s):  
South African ◽  
Minority Groups ◽  
Female Entrepreneurs ◽  
Male And Female ◽  
Black And White ◽  
Black Entrepreneurs ◽  
Chi Squared ◽  
Discriminant Analyses ◽  
And Gender ◽  
Gender Groups

The literature on the biographical backgrounds of entrepreneurs seems to contain many contradictory findings. This situation can partly be due to the assumption that samples of entrepreneurs were homogeneous rather than heterogeneous. It appears as if female entrepreneurs have been less well researched than their male counterparts. Differences in the biographical backgrounds and business situation of, respectively, the white and the black entrepreneurs in South Africa have been assumed but little empirical evidence exists in this respect. Black en-trepreneurs, and female entrepreneurs are in most developed societies' minority groups and have not specifically been studied in depth - hence the present study. The biographical and business backgrounds of 569 South African entrepreneurs (106 Black and 463 White; 136 female and 433 male) were studied. One-way Analyses of Variance and Chi-squared followed by Discriminant analyses were carried out to determine whether, respectively, black and white entrepreneurs and male and female entrepreneurs differed in terms of the variables studied. Significant differences between the total group of male and female subjects were found on only five variables. White and black entrepreneurs differed statistically significantly on 16 of the 30 variables studied. Opsomming Die literatuur oor die biografiese agtergronde van entrepreneurs skyn baie teenstrydige bevindinge te bevat. Hierdie kan moontlik deels toegeskryf word aan die aanname dat steekproewe van entrepreneurs eerder homogeen eerder as heterogeen is. Dit skyn asof minder navorsing oor vroulike as oor manlike entrepreneurs gedoen is. Ten spyte van aannames in die verband, bestaan min empiriese gegewens oor die biografiese agtergronde en sake-situasie van respektiewelik wit en swart Suid-Afrikaanse entrepreneurs. Swart en vroulike entrepreneurs is in meeste gemeenskappe minderheidsgroepe en is nog nie in diepte bestudeer nie, daarom die huidige studie. Die biografiese en sake-agtergronde van 569 Suid-Afrikaanse entrepreneurs (106 swart en 463 wit; 136 vroulik en 433 manlik) is bestudeer. Een-rigting Analise van Variansie en Chi-kwadraat gevolg deur Diskriminant Analise is uitgevoer ten einde te bepaal of respektiewelik swart en wit en manlike van vroulike entrepreneurs in terme van die veranderlikes wat bestudeer is, verskil. Betekenisvolle verskille tussen die totale groep van manlike en vroulike entrepreneurs is slegs in terme van vyf veranderlikes gevind. Swart en wit entrepreneurs het statistics beduidend op 16 van die 30 veranderlikes in die studie ingesluit, verskil.

scholarly journals Optimal Loan Pricing for Agricultural Supply Chains from a Green Credit Perspective

2021 ◽  
Vol 13 (22) ◽  
pp. 12365
Author(s):  
Liurui Deng ◽  
Wentang Xu ◽  
Juan Luo
Keyword(s):  
Sustainable Development ◽  
Supply Chain ◽  
Supply Chains ◽  
Interest Rates ◽  
Optimization Problems ◽  
Bank Loans ◽  
Loan Pricing ◽  
Pricing Rules ◽  
The Incentive Mechanism ◽  
Agricultural Supply

In recent years, many countries have proposed various sustainable development strategies around environmental issues. The implementation of green supply chain management is an effective sustainable development approach that combines “environmental awareness” and “economic development.” Therefore, introducing the concept of “green” effectively is the main direction for the sustainable development of agriculture in the future. The impacts of green credit policies on agricultural supply chains have rarely been discussed before. Therefore, we focus on the incentive mechanism of green credit policies in the agricultural supply chain. We use the Stackelberg Leadership Model to construct a pricing model which adds the interest subsidy and required reserve ratio (RRR) cuts, and determines the pricing rules of bank loans and production decisions of the farmer in the agricultural supply chain under the incentive policy of green credit by quantifying the optimization problems of the bank and the farmer. The result shows that optimal decisions exist for both farmer and bank in the supply chain game framework. The implementation of the green credit policies contributes to both of their profits. Additionally, the green credit policies give the bank room to reduce interest rates so that the overall utility level of the supply chain could be improved.

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