Journal of Financial Services Research

, Volume 46, Issue 2, pp 115–135 | Cite as

Attitudinal Asymmetries and the Lender-Borrower Relationship: Survey Results on Farm Lending in Shandong, China

  • Calum G. Turvey
  • Xiaolan Xu
  • Rong Kong
  • Ying Cao


This paper addresses the problem of social interactions and the lender-borrower relationship by measuring the disconnect between borrowers and lenders across a wide range of lending-related attributes. The degree by which lenders and borrowers connect disconnect depends on whether lenders’ and borrowers’ perceptions across these attributes are symmetric or asymmetric. We compare field survey results from 120 loan officers at Rural Credit Cooperatives (RCCs) in China’s coastal Shandong province, and pair them with an existing survey on identical questions to 394 farm households in the same region. Pairing lenders’ perception towards borrowers regarding RCC microcredit lending mechanism, against borrowers’ perception towards lenders and how themselves were perceived by lenders in the same regards, we observe on many dimensions a disconnect between them in the context of lenders’ “care” towards borrowers, loan rejection, memberships of RCC and group guarantee, lending concerns, cost of borrowing, reasons for default, credit rationing, and lending preferences. This research provides financial institutions with outreach mechanisms to borrowers, while also training lenders to borrowers’ sensitivities.


Lender-Borrower Relationship Asymmetric Information Relationship Lending Rural credit cooperative (RCC) Agricultural Finance 

JEL classification

G2 Q14 



Authorship is shared equally. The original Shandong data was gathered by Rong Kong and her students from Northwest Agricultural and Forestry University under NSF grant 70873096. The Shandong lender data was collected by C.G. Turvey and his Cornell students Xiaolan Xu and Ying Cao from funds made available from the W.I. Myers endowment, Cornell University,, along with Rong Kong, Guangwen He from China Agricultural University and Jiujie Ma, Renmin University. The work reported in this paper is based upon the graduate research and thesis of Xiaolan Xu at Cornell University, 2012.


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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  • Calum G. Turvey
    • 2
  • Xiaolan Xu
    • 2
  • Rong Kong
    • 1
  • Ying Cao
    • 3
  1. 1.Northwest Agricultural and Forestry UniversityYanglingPeople’s Republic of China
  2. 2.Cornell UniversityIthacaUSA
  3. 3.University of GuelphGuelphCanada

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