Flood, Farms and Credit: How Bank Ties Keep Farmers, Young and Female, above Water

Pejman Abedifar, Seyed Javad Kashizadeh and Steven Ongena
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Pejman Abedifar: University of St Andrews - School of Management; Khatam University - Tehran Institute for Advanced Studies
Seyed Javad Kashizadeh: Khatam University

No 22-52, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Using a rare flood in April 2019 in Iran as a natural experiment, we study the role of local banks in mitigating the financial consequence of natural disasters to smallholder farmers. We find that local branches immediately react to the disaster by increasing their lending for two months following the flood. Analyzing proprietary information on more than 70,000 farmers, we find that farmers with a stronger relationship with their bank - in particular when they are young and female - have a higher chance of access to new credit. Our findings underscore the importance of the presence of local banks in agricultural areas which are exposed to climate risk.

Keywords: Local banks; Relationship lending; Climate Change; Farmers (search for similar items in EconPapers)
JEL-codes: G21 G28 O13 Q14 Q54 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2022-06
New Economics Papers: this item is included in nep-agr, nep-ban, nep-dem and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2252

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