Classification of Credit rationing and its Application in Agricultural - A review
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26 mar 2025
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Publicado en línea: 26 mar 2025
Recibido: 16 nov 2024
Aceptado: 18 feb 2025
DOI: https://doi.org/10.2478/amns-2025-0827
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© 2025 Bin Wang et al., published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.
Factors affecting credit rationing
| Type of rationing | Affecting factors |
|---|---|
| Interest rate rationing | Information asymmetry, risk, etc. |
| Cost rationing | Proximity (or time) to local banks, ease of application materials, and opportunity cost of entering into this contract |
| Risk rationing | Mortgage guarantees, insurance, etc. |
| Discrimination rationing | Human endowment: age, capable person identity, experience of working outside the home, personal credit, education, number of family members, etc. |
| Economic endowment: income level, degree of non-farming, number of livestock breeding, scale of cultivation, etc. | |
| Social endowment: ″weak ties″ in rural society, membership in farmers′ organizations (cooperatives), etc. | |
| Geographical and environmental endowments: geographical location of residence, number of financial institutions, village-level infrastructure, etc. | |
| Other rations | Differences in access to finance |
| Policy changes | |
| Efficiency of contract performance | |
| Spatial variation |
Types of credit rationing
| Type of rationing | Reason | Expressions | Type of rationing | |||
|---|---|---|---|---|---|---|
| Price rationing | Interest rate rationing | The borrower is unable to obtain the loan at the existing interest rate. | Volume rationing | Full | The borrowers were all denied their loan applications | Supply-side rationing |
| Non-price rationing | Discrimination rationing | Differences in individual characteristics (family endowment) | Partial | Borrower′s loan application partially denied | ||
| Cost rationing | Increased transaction costs and zero effective demand for loans | Borrower waives loan application | Demand-side rationing | |||
| Risk rationing | Increased contractual risk and lower expected utility for borrowers | Borrower waives loan application | ||||