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The market for agricultural credit in Virginia was analyzed to provide market intelligence to financial institutions which extend credit to Virginia farmers. The agricultural environment in the U.S., the South, and Virginia were reviewed concerning the effect of current agricultural sector transition on producers, lenders, agribusinesses, and rural communities. The agricultural credit delivery system in Virginia was studied. The credit use and needs of Virginia farmers and agricultural customers of three Virginia banks were also evaluated. The market for agricultural credit in Virginia was found to be stable. Virginia agriculture is in relatively good financial condition, benefiting from the state's diverse and strong general economy. The use of agricultural credit varied demographically, with one-half of Virginia farmers owing no agricultural debt. Virginia farmers considered Interest rates most important te iender selection and desired the implementation of financial services such as tax planning, estate planning, and financial management seminars. Statistical analysis revealed the presence of market segmentation variables but failed to definitely identify segments. Bank customer survey group responses varied from those of Virginia farmers in general and from each other. Challenges facing Virginia agricultural lenders include adapting to the new agricultural environment, meeting the changing needs of the modified customer base, and competing with new sources of credit. A synopsls of recent studies and statistical information concerning U.S., Southern, and Virginia agriculture and results of the 1987 Virginia Agricultural Credit Use and Needs Survey are included. / Master of Science

M.S.

The demand for consumer credit is an area of economics that is of great interest to those in the lending community. While much research has been performed on this topic in the financial industry, the findings have been very closely guarded for competitive reasons. In this study, reduced form equations were derived to form the basis of a 2SLS regression model. This model was used to estimate the demand for consumer credit in the United States over the period 1973 - 2002. Six independent variables were included in the analysis: monetary base, unemployment rate, consumer confidence index, disposable personal income, federal funds interest rate and the price/barrel of oil. The model results concluded that only two of these variables significantly affect the demand for consumer credit – disposable personal income (DPI_t) and the unemployment rate (uet). The error terms were compared against those derived from two alternative models using the same data sets – a trend model and an autoregressive model – AR(1). The root mean square error (RMSE) for the reduced form model was significantly lower then that of the trend model, but slightly higher then the AR(1) model. The objectives of this study are to: (1) produce an accurate model that defines the drivers behind the demand for consumer credit, while (2) producing results consistent with econometric theory. Based on this set of objectives, the reduced form model is the superior of the three models included in this study. / Master of Arts

Thesis advisor: Thomas Chemmanur / My Ph.D. dissertation consists of three chapters focused on topics in entrepreneurial finance, financial intermediation, and FinTech. The first chapter analyzes the effects of bank competition on gender and racial gaps in entrepreneurship. By leveraging interstate bank deregulation from 1994 to 2021, I find that stronger bank competition increases the quantity and quality of banking services offered to minority borrowers. Developing a novel measure of discrimination using narrative information in the complaints filed with the Consumer Financial Protection Bureau, I demonstrate that bank competition reduces discrimination, alleviating the financial constraints of female and minority entrepreneurs. Stronger bank competition also reduces gender and racial gaps in firm performance and business equity accumulation, promoting wealth equality and fostering equitable economic growth.The second chapter draws on the context of the Consumer Financial Protection Bureau (CFPB) publicly disclosing consumer complaint narratives in 2015. Utilizing a difference-in-differences design, I find that, following disclosure, CFPB-supervised banks whose complaint narratives are disclosed are less prone to discriminate against minority borrowers in the mortgage lending market. This reduces racial disparities in interest rates, default rates, and rejection rates. The disclosure saves minority borrowers $102 million in interest payments and aids over 14,000 minority households in securing loans annually, thereby narrowing the racial gap in homeownership. Stakeholders including consumers, peer banks, and stock market investors facilitate the disclosure's effects on reducing discrimination. The third chapter, co-authored with Bibo Liu and Xuan Tian, studies how policy uncertainty affects household credit access. Using crowdfunding data from a major peer-to-peer (P2P) crowdfunding platform, Prosper.com, and a news-based policy uncertainty index developed by Baker, Bloom, and Davis (2016), we find that policy uncertainty negatively affects households’ access to small loans. Using an instrument variable based on partisan conflicts and a difference-in-differences analysis relying on plausibly exogenous variation in policy uncertainty generated by gubernatorial elections, we show that the relation is likely causal. Investors’ increased caution on deal selection and enhanced value of the “wait-and-see” option appear to be two plausible underlying channels through which policy uncertainty affects P2P crowdfunding. Further evidence suggests that policy uncertainty decreases households’ incentives to borrow at the aggregate level, and increases loan interest rates and default probabilities. / Thesis (PhD) — Boston College, 2024. / Submitted to: Boston College. Carroll School of Management. / Discipline: Finance.

This thesis has been prepared primarily to bring to the attention of the credit world the larness and antiqueness of the methods now being employed. The author has attempted to set forth the results of the present system as well as the revisions which he believes will remedy the undesirable conditions. / M.S.