Some financial institutions still making loans

Richard Monson, CEO

When people know what you do for a living, they’ll often ask you questions about your work.  In the last several months, I’ve been asked the same question a number of times, by farmers, business leaders, and politicians. They’ll ask, “is Farm Credit still making loans?” And my answer is emphatically, “yes.”

What this question tells me is that across our region, across all walks of life, folks in rural America are concerned that the flow of credit is slow – that finding a safe, sound, reliable source of financing for agriculture, agri-business – Main Street – hasn’t made its way back to the small towns and communities here in southwest Georgia.

To be honest, we know that not all banks have been lending, and more specifically, many are not expanding their agricultural portfolios. There’s no doubt that some community banks are troubled, and some regional lenders are pulling back from the rural marketplace. Fortunately, however, there are many lenders in Southwest Georgia that are still well positioned and able and willing to offer credit. 

For Farm Credit and other community lenders who have sound agricultural portfolios, agriculture continues to be a bright spot. Quality agricultural land has maintained its value. We’ve seen a turn-around in the poultry industry and improved cattle prices. Peanuts will probably be a good alternative for growers this year, and that’s a bright spot. So, in terms of land values and production, agriculture remains sound in terms of financial performance – which means we continue to supply credit to farmers who need it.
 
The biggest factor impacting the agricultural sector is jobs. Unemployment trickles down to our rural communities just as it does in urban areas. Most farmers rely on off farm income, and with Southwest Georgia experiencing one of the highest rates of unemployment in our State, we’ve seen some instances where this has affected a farmer’s ability to repay. So, no doubt, we have had to make some adjustments, as have other lenders.

We’ve tightened our credit standards somewhat. And as is typically the case when credit standards tighten, borrowers are required to put down a greater amount for a down payment, or supply additional documentation.

But farmers, farm businesses, folks trying to buy a home or a piece of recreational property shouldn’t be deterred simply because we ask a few more questions. This means we’re making good lending decisions – which ultimately benefits everyone and is good for the community.

So are we still making loans? Yes. We have the capital and the willingness to lend to farmers and rural communities.  Along with other community banking institutions that have survived the recent economic downturn, Southwest Georgia Farm Credit is positioned to continue to meet its public mission – serving farmers and rural communities so that together, we can enjoy a quality of life you’ll only find in the small towns we call home.