Our readers have made many helpful suggestions about the format of this report, and a number of them have been incorporated in this edition to improve its usefulness, while preserving comparability with earlier editions. Thanks to those who have helped fine-tune this effort. In order to provide a better measurement of commercial bank micro-business lending, a new ranking method was adopted for the 1996 study. The 1996 study uses four variables-the same as those employed in the more comprehensive small business lending study. A bank's rank in a given category is based on its decile ranking-where it falls in the distribution of banks within a state for any given variable.
Small banks tend to rank high in different categories than larger banks.
Usually, smaller banks have a higher percentage of total assets in small business loans and thus rank high in the variables based on ratios, while larger banks lead in the sheer number and value of small loans. The 1996 ranking system should provide a more balanced scoring system for comparing community banks and large financial institutions in each state. That amount accounts for 15.0 percent of total micro-business lending in 1996. In comparison, the 478 banks held just 3.3 percent of total commercial bank assets. The ratios of micro-loans to total assets for these 478 banks range from 0.001 to 0.579, for an average ratio of 0.210.