Date of Award
Master of Science (MS)
Economics, Finance, & Accounting
The major purpose of this study was to analyze the status of extension of lines of credit by Kansas banks. The examination involved a study of the extent to which banks granted lines of credit, how loan policies and practices differed among banks surveyed, methods by which the smaller banks might adopt the policies of larger banks in granting lines of credit. Methods and Procedures Employed: A questionnaire was prepared to obtain information on the practices of banks in granting lines of credit. The questionnaire was sent to 300 banks selected at random from those in operation in Kansas as of June 24, 1963. There were 136 questionnaires returned, as requested, and the information for this study was obtained from the information provided. Summary and Findings: A high percentage of the banks investigated were granting lines of credit. Lines were granted primarily at the initiative of the banks and were utilized only to a limited extent as a means of increasing loan activities. The number of lines granted was generally small and represented a limited portion of the loan activities of the banks. Approximately one third of the banks had established a department to handle this type of loan. A large number of the banks established a definite repayment schedule. The most common repayment period was on a monthly basis. Some of the banks specialized in extending credit to certain types of operations. Farming and manufacturing were most commonly mentioned. A portion of the banks required line of credit borrowers to maintain compensatory balances and based requirements to varying degrees on the type of business, the size of the business, and the security provided. Some of the banks related requirements to the use of the line of credit. The most commonly mentioned factor limiting the extension of lines of credit was lack of demand. The legal limit was the most frequently mentioned factor in setting upper limits on lines of credit.
Cain, Kerry Scott, "A Study of the Procedures and Policies Used by Kansas Banks in Establishing Lines of Credit" (1963). Master's Theses. 798.
Copyright 1963 Kerry Scott Cain