Credit risk migration and downgrades experienced by agricultural lenders
Abstract
Agricultural credit risk migration is examined using loan records gathered from four agricultural lenders. Results indicate that lender risk ratings are much more stable than ratings based on credit scores estimated from financial statements, highlighting the importance played by nonfinancial factors such as management capacity, character, and collateral in assessing credit risk. Additionally, the borrower’s risk tier, personal characteristics, and the stage of the business life cycle provide useful information in predicting credit quality downgrades, while the primary agricultural enterprise does not impact the likelihood of a downgrade.
Keywords
Citation
Gloy, B.A., LaDue, E.L. and Gunderson, M.A. (2005), "Credit risk migration and downgrades experienced by agricultural lenders", Agricultural Finance Review, Vol. 65 No. 1, pp. 1-16. https://doi.org/10.1108/00214660580001162
Publisher
:Emerald Group Publishing Limited
Copyright © 2005, Emerald Group Publishing Limited