Files
Abstract
The United States Department of Agriculture Farm Service Agency, hereafter, FSA provides credits to farmers, who are, in general, less likely to be competitive enough to obtain commercial loans from traditional lenders. There have been some cases where FSA lending terms were suspected to have been biased against double minority borrowing groups, such as female borrowers belonging to ethnic minorities. This study investigates the extent of any bias in FSAs lending terms, arising from borrowers double minority classifications, such as Black or African American females, Hispanic or Latino females, Asian females, and Native American females. It also analyzes how the combinations of lending terms prescribed by the FSA lending officers to borrower groups affect the resulting profitability and net cash position after debt servicing. We find that FSA lending terms seem to be less favorable to double minority groups and this unfavorable lending terms result into weak financial performance of double minority groups.