Flood, Farms and Credit: The Role of Branch Banking in the Era of Climate Change

66 Pages Posted: 29 Oct 2023

See all articles by Pejman Abedifar

Pejman Abedifar

University of St Andrews - School of Management; Khatam University - Tehran Institute for Advanced Studies; Khatam University

Seyed Javad Kashizadeh

affiliation not provided to SSRN

Steven Ongena

University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)

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Abstract

Using Iran's unexpected flood in April 2019 as a natural experiment, we show that local branches bridge the time gap between the disaster and governmental aids byimmediately increasing their lending for two months following the flood. Analyzing proprietary information on more than 53,000 farmers, we nd that farmers with a stronger relationship with their branch - particularly younger and females - are more likely to receive a recovery loan. Our findings underscore that despite recent technological advancements, relationship-based branch banking is still important for agrarian societies during catastrophic events.

Keywords: Bank branch, Relationship lending, Climate change, Agricultural loans

Suggested Citation

Abedifar, Pejman and Kashizadeh, Seyed Javad and Ongena, Steven R. G., Flood, Farms and Credit: The Role of Branch Banking in the Era of Climate Change. Available at SSRN: https://ssrn.com/abstract=4616391 or http://dx.doi.org/10.2139/ssrn.4616391

Pejman Abedifar

University of St Andrews - School of Management ( email )

The Gateway, North Haugh
St Andrews, Fife KY16 9RJ
United Kingdom

Khatam University - Tehran Institute for Advanced Studies ( email )

Tehran
Iran

Khatam University

Tehran
Iran

Seyed Javad Kashizadeh

affiliation not provided to SSRN ( email )

No Address Available

Steven R. G. Ongena (Contact Author)

University of Zurich - Department Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

NTNU Business School ( email )

Norway

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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