Can land inequality and land reforms affect agricultural credit access? Evidence from Mexico state-level data, 1940-1960

High land inequality can lead to lower access to credit in rural populations, as they lack a collateral. In the case of Mexico, the concentration of land and a shortage of agricultural credit caused the rural population to seem less creditworthy; the Mexican agrarian reform was designed to resolve this inequality and lack of resources. Using the Mexican's original agricultural censuses, a new dataset on land inequality and the flow of agricultural credit is provided for each Mexican state. With this unique data set, this article analyses if the agrarian reform was successful in its early years, by helping to reduce land inequality, and if access to credit was improved by reducing land inequality. The results show that, although harmful, land inequality did not affect credit access. Access to credit probably depended on political factors instead.