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Business Credit Availability in the Rio Grande Valley: An Analysis of Business Needs and Bank Lending

Paul Michael Taube, J. Michael Patrick

Abstract


A study by Brannon et al. (1987) found that banks along the U.S.-Mexico border exhibited low loan to deposit ratios with the lowest ratios associated with banks located within the Rio Grande Valley of South Texas. Conservative lending practices were not justified by an unstable foreign deposit base, since Brannon et al. (1987), using survey data, found that the Mexican deposit base was quite stable. Bankers attributed their lending practices to the lack of investment opportunities and a weak regional economy (Brannon et al. 1987:25). The purpose of this article is to analyze bank lending patterns in the Rio Grande Valley, a region highly integrated with Mexico both economically and culturally, using annual time series data. To augment the time series analysis, small business access to commercial bank credit and bank problems lending to small businesses will be assessed using survey data.

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Print ISSN: 0886-5655
Online ISSN: 2159-1229

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