Agricultural Lending

Transaction Risk

Transaction risk primarily results from the numerous documentation, inspection, control, and monitoring requirements associated with agricultural lending. An inadequate understanding of these requirements, or failure to comply with them, may lead to serious credit weaknesses, including ultimate collection problems. When this occurs, it is most often the result of either lender complacence, inappropriate assumptions about a borrower or collateral, or both.

Previous: Liquidity Risk Next: Reputation Risk