Journal of Agricultural and Applied Economics, 31,2(August 1999):201–214 0 1999 Southern Agricultural Economics Association Lending by Rural Banks Involved in Mergers

This paper employed a variety of sources of data and a number of methods to describe rural lending markets. Over the sample period, 1992 through 1998, there was a pronounced trend towards affiliation of banks, both urban and rural, with holding companies, although over this period there was little change in the concentration of banking offices in rural areas. Using data from the 1993 National Survey of Small Business Finances, the study found some evidence that rural small businesses were less likely to apply for a loan than urban small firms although those rural firms that did apply were more likely to have their application accepted. Key Words: merger, rural banks The purpose of this paper is to review data regarding banking consolidation with a partic-ular focus on rural areas. The general theme of the paper is that rural markets and financial institutions may differ fundamentally from ur-ban ones. Thus one should perhaps distinguish these markets when examining some of the ef-fects of consolidation on the borrowers in a market area. For instance, the number and type of banks that operate in rural areas may differ significant y from the norm for urban markets. Also, rural borrowers may differ fundamen-tally from urban borrowers, and if this is true, the type of financial relationships that they maintain also might differ. I plan to carry out this examination of consolidation in rural banking markets by developing the three ma-jor themes outlined below. Nicholas A. Walraven is affiliated with the Federal Re-serve Board/Federal Reserve System