Small Bank Lending: Tapping Opportunities for Rural Growth, The Main Street Economist, Center for the Study of Rural America, Federal Reserve Bank of Kansas City

Banks play a key role in helping rural regions transform their economies by funding new business ventures. In rural America, community bankers often have a unique perspective on their local economy and local business prospects, thanks to their heavy personal involvement and face-to-face contact with customers. But community banks must now face a challenging new lending landscape. Rural banks have always had fewer opportunities than urban banks for diversifying their loan portfolios, given the narrower range of industries in rural America. And because rural areas lack the thick networks of businesses and innovators that urban areas have, rural bankers are often armed with less first-hand information than urban bankers on dynamic new projects in emerging industries. CENTER FOR THE STUDY OF RURAL AMERICA Federal Reserve Bank of Kansas City