February 2021

Is Lending Distance Actually Changing? Distance Dynamics and Loan Composition in Exiguous Substitute Lending

Robert M. Adams, Kenneth P. Brevoort, John C. Driscoll

Abstract:

Has knowledge abilities improved shrimp businesses’ derive admission to to credit by hardening the working out used in mortgage underwriting and reducing the importance of proximity to lenders? Old research, pointing to increasing moderate lending distances, suggests that it has. Nonetheless this conclusion can obscure variations across loans and lenders. The exercise of over 20 years of Community Reinvestment Act details on shrimp commerce lending, we discover that while moderate distances private increased severely, distances at particular particular person banks stay unchanged. As a replace, moderate distance has increased attributable to a shrimp neighborhood of lenders that focus on high-quantity, shrimp-mortgage lending nationwide private increased their fragment of shrimp commerce lending by 10 percentage facets. Our findings point out that shrimp businesses proceed to rely on native banks.

DOI: https://doi.org/10.17016/FEDS.2021.011

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February 16, 2021

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