RMI Reveals Farm Loan Rejection Rate Nearly Doubles Among Banks
For the fifth straight month, Creighton University’s Rural Mainstreet Index (RMI) has remained above growth neutral.
There was a slight drop in the index from 56.3 to 56.1, however it remains above 50, which represents growth neutral.
While there was a meager increase in farmland and ranchland from 42.2 in May to 42.7 in June, it is the 55thconsecutive month land values have remained below growth neutral.
Farmer borrowing rose as well in June. According to the RMI, the loan-volume index saw an increase from 76.3 from 74.3 in May. According to nearly two-thirds of the bankers surveyed, collateral requirements on farm loans increased.
40.5 percent of survey respondents mentioned their banks “rejected a higher percentage of farm loan applications.” This rate has nearly doubled in the last 12 months.
The RMI survey respondents are bank CEOs in rural areas in a 10-state region dependent upon agriculture and/or energy.