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Abstract

A model of bank rural lending in Australia for the period 1950/1973 is constructed to measure the effects of various rural credit policies on bank rural advances. Results indicate that rural sector bank deposits did not influence the rural sector's share of advances; Farm Development Loan Fund loans simply replaced overdraft advances; rural borrowers were not discriminated against in periods of tight credit; interest rate concessions induced a greater proportionate reduction in the rural share of advances.

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