Access to financial institutions and local credit supply is crucial for local economic development, particularly in supporting business growth in rural communities. This study analyzes the relationship between banking access, credit supply, and agri-food business establishments in rural areas of the Southern United States using a ZIP code-level panel dataset covering 2000–2023. Fixed-effects and dynamic panel Difference-in-difference (DID) models are used to account for unobserved heterogeneity and persistence in business establishment growth in relation to financial access. Results support that greater bank branch presence is positively associated with the number of agri-food business (AFB) establishments, emphasizing the importance of local banking infrastructure for rural entrepreneurship and economic activity. Our loan count and loan volume measures in rural areas, using Community Reinvestment Act (CRA) lending, provide additional evidence that local credit supply supports entrepreneurs—we found around 17-23% dynamic sustained growth in AFBs can be attributable to the loan volume receipt of the top quantile recipient. The findings suggest that maintaining access to financial institutions and strengthening local credit markets have significantly contributed to agri-food business growth and broader rural economic resilience in the Southern United States.
