Factors Affecting Commercial Bank Lending Practices in the Malaysian Farm Sector

Mohamad Iruwan bin Ghuslan,, Junaina Muhammad and Sazali Zainal Abidin

The IUP Journal of Public Finance, 2010, vol. VIII, issue 4, 39-57

Abstract: This study examines lending practices of Malaysian commercial banks in the agricultural sector. Specifically, this study intends to analyze the relationship between bank lending practices such as credit analysis, collateral policy and pricing policy to the agriculture sector. This study uses Spearman’s rank order correlation to analyze the relationship between bank lending practices. Respondents from 202 bank branches are randomly selected from peninsular Malaysia. The results of the non-parametric test show that there is a significant relationship between credit analysis, collateral policy and bank lending practices in the agriculture sector. However, contrary to the expectation, the findings show that there is an insignificant relationship between pricing policy and bank lending practices.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjpf:v:08:y:2010:i:3:p:39-57

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