|Home > Determinants of FSA Direct Loan Borrowers' Financial Improvement and Loan Servicing Actions|
Regression models of Farm Service Agency borrower net worth, debt-to-asset ratio, and loan servicing actions over an average seven-year period following loan origination are estimated to identify determinants of borrower financial progress over time. Results show significantly increasing net worth and debt-to-asset ratio. The change in net worth increases and the change in debt-to-asset ratio decreases as time in loan program increases. Increasing origination net worth tends to decrease loan servicing actions. Socially disadvantaged and beginning farmer loans perform similarly to nonprogram loans. Borrowers originating limited resource loans experience significant net worth impacts relative to borrowers originating regular FSA loans.