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Hidajat, Taofik. "Unethical practices peer-to-peer lending in Indonesia." Journal of Financial Crime 27, no. 1 (December 19, 2019): 274–82. http://dx.doi.org/10.1108/jfc-02-2019-0028.
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Purpose This paper aims to highlight the existence of illegal peer-to-peer (P2P) lending in Indonesia, unethical practices of P2P lending operators to borrowers, regulatory weaknesses and offer recommendations to reduce unethical practices. Design/methodology/approach This paper is a general discussion through desk research using secondary data from journal papers, research reports, books and papers online. Findings There are regulatory weaknesses in regulating illegal P2P lending. There are no strict legal sanctions for P2P lending operators who act unethically to borrowers. Originality/value This paper discusses the unethical actions of P2P lending operators and the inability of regulations to take legal action against illegal P2P operators.
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Cohen, Edward E. "Commercial Lending by Athenian Banks: Cliometric Fallacies and Forensic Methodology." Classical Philology 85, no. 3 (July 1990): 177–90. http://dx.doi.org/10.1086/367198.
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Zabchuk, Halyna. "ACTIVATION OF BANKING LENDING OF THE REAL SECTOR OF ECONOMY AS A PRECONDITION OF RESTORATION OF ECONOMIC GROWTH." Economic Analysis, no. 28(1) (2018): 172–77. http://dx.doi.org/10.35774/econa2018.01.172.
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Introduction. The article deals with the main problems of bank lending. The proposals on the activation of bank lending in the real sector of the economy are substantiated. Purpose. The article aims to study the factors that restrain bank lending to the real sector, and to determine the directions of lending activating of the real sector of the economy by domestic banks. Method (methodology). The research has been conducted with the help of general scientific methods of analysis, namely, method of induction, method of deduction, method of systematization and generalization. Results. Economic growth in modern conditions cannot be ensured without attracting bank capital into the real economy. The main factors hindering the development of investment banking lending have been analysed. The basic mechanisms of further reformation of the banking sector in order to increase lending activity have been substantiated. A set of recommendations for improving the system of lending to the real sector of the economy by commercial banks at the present stage has been offered.
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Liu, Wei, and Li-Qiu Xia. "An Evolutionary Behavior Forecasting Model for Online Lenders and Borrowers in Peer-to-Peer Lending." Asia-Pacific Journal of Operational Research 34, no. 01 (February 2017): 1740008. http://dx.doi.org/10.1142/s0217595917400085.
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Online peer-to-peer (P2P) lending is an emerging financial mode that combines the Internet with private lending to provide unsecured lending among individuals. The interest rate and risk depend on online lenders and borrowers’ behavior choices and game in the context of P2P lending. In this paper, we propose an evolutionary behavior forecasting model for online participants based on the risk preference behavior of lenders and the credit choice of borrowers. We highlight four evolutionary equilibrium states of online lenders and borrowers’ behavior and their effects on the risk of online P2P lending platforms. We run a numeric experiment using the Paipaidai platform in China as a case and find that the evolutionary behavior of online lenders and borrowers is determined by the mutual effect of the interest rate, information gathering cost, borrowing cost, and yield rate. This paper uses evolutionary game methodology to analyze online P2P lending behavior in China and explores P2P fund success from the dual perspective of lenders and borrowers.
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Sutomo, Sutomo, and Johadi Johadi. "ANALISIS RIGIDITAS LENDING RATE PERBANKAN DI INDONESIA PERIODE JANUARI2001 - JUNI2004." Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan 5, no. 2 (May 2, 2017): 193. http://dx.doi.org/10.23917/jep.v5i2.4042.
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The research aim's to know the influence of interest rate ofSBI, exchange rate, total bank lending, supply of funds and commercial bank amount to rigidly bank lending rate in Indonesian period of January 2001 until June 2004. The research use secondary data by character of time series. The research methodology used a partial adjustment model that rigidly bank lending rate are influence by all independent variable such interest rate of SBI, exchange rate, and total bank lending, supply of fund and commercial bank amount in banking sector. The empirical results that rigidly bank lending rate are influenced by all independent variable are collectively such interest rate of SBI, exchange rate, and total bank lending, supply of fund and commercial bank amount in banking sector. But as partial, rigidly bank-lending rate are influenced by an interest rate of SBI, exchange rate, total bank lending and supply of funds and commercial bank amount, which don't have an effect to rigidly bank lending rate.The result that is suitable with the theory, where monetary instrument (interest rate of SBI) can be used to influence bank-lending rate as process transmission mechanism monetary policy by price channel approach. Adjustment coefficient is equal to 0,5484 which meaning 54,84 % represents the difference between bank lending rate actual with bank lending rate that desired which fulfilled to be reached in one period, where speed of adjustment bank lending rate in response change of independent variable equal to 5 months 27 day, with mean lag independent variable equal to 1,1812867 months.
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Kristianti, Ika. "Analisis Profil Penggunaan Layanan Peer-to-peer Lending Pada UKM di Kota Salatiga." Jurnal Ilmiah Manajemen Kesatuan 8, no. 3 (December 5, 2020): 205–12. http://dx.doi.org/10.37641/jimkes.v8i3.343.
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The COVID-19 pandemic in Indonesia has inflicted an inevitable income drop to many businesses, including Small Medium Enterprise (SME). In order to continue running their operational activities and keep fulfilling its obligations, some SMEs started to use P2P lending services as one of its capital sources. The purpose of this study is to portray the profile of P2P lending user, especially in Salatiga. This research is conducted by using qualitative research methodology with descriptive approach. Some SMEs believe that P2P lending can provide them with support in fulfilling their obligations. But in the other hand, there are others which argue that the services provided by P2P lending are inefficient and ineffective in fulfilling their business obligations.
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Kislitsyna, Larisa Viktorovna, Alexander Vladislavovich Karachev, and Natalya Vladimirovna Karacheva. "METHODOLOGY FOR ASSESSING THE FINANCIAL POTENTIAL OF HOUSEHOLDS FOR LENDING PURPOSES." Journal of Applied Research 1, no. 2 (2022): 6–13. http://dx.doi.org/10.47576/2712-7516_2022_2_1_6.
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Delis, Manthos D., and Panagiotis Papadopoulos. "Mortgage Lending Discrimination Across the U.S.: New Methodology and New Evidence." Journal of Financial Services Research 56, no. 3 (March 17, 2018): 341–68. http://dx.doi.org/10.1007/s10693-018-0290-0.
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Osken, Latif Cem, Ceylan Onay, and Gözde Unal. "Estimating defaults in organized security lending markets." Journal of Financial Regulation and Compliance 24, no. 3 (July 11, 2016): 343–62. http://dx.doi.org/10.1108/jfrc-07-2015-0032.
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Purpose This paper aims to analyze the dynamics of the security lending process and lending markets to identify the market-wide variables reflecting the characteristics of the stock borrowed and to measure the credit risk arising from lending contracts. Design/methodology/approach Using the data provided by Istanbul Settlement and Custody Bank on the equity lending contracts of Securities Lending and Borrowing Market between 2010 and 2012 and the data provided by Borsa Istanbul on Equity Market transactions for the same timeframe, this paper analyzes whether stock price volatility, stock returns, return per unit amount of risk and relative liquidity of lending market and equity market affect the defaults of lending contracts by using both linear regression and ordinary least squares regression for robustness and proxying the concepts of relative liquidity, volatility and return constructs by more than variable to correlate findings. Findings The results illustrate a statistically significant relationship between volatility and the default state of the lending contracts but fail to establish a connection between default states and stock returns or relative liquidity of markets. Research limitations/implications With the increasing pressure for clearing security lending contracts in central counterparties, it is imperative for both central counterparties and regulators to be able to precisely measure the risk exposure due to security lending transactions. The results gained from a limited set of lending transactions merit further studies to identify non-borrower and non-systemic credit risk determinants. Originality/value This is the first study to analyze the non-borrower and non-systemic credit risk determinants in security lending markets.
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Rakhaev, V. A. "Upgrading the financial model of corporate lending in the agri-industrial complex to replenish working funds." Finance and Credit 26, no. 4 (April 28, 2020): 931–46. http://dx.doi.org/10.24891/fc.26.4.931.
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Subject. Lending transactions always imply terms of lending for the bank and the borrower. Modeling lending processes, users can evaluate terms of lending transactions, efficiency of lending projects and the borrower’s ability to repay a loan. Objectives. I substantiate the approach to setting a financial model of the AIC lending so that entities could replenish their working funds. Methods. The study is based on general research methods, such as a systems and logic analysis and synthesis, principles of induction and deduction, techniques of higher financial computations. In the analytical part, we apply the balance sheet method, financial ratios, feasibility studies. The data were analyzed and summarized through the correlation of resultant and partial indicators, index method, factors analysis and forecasting. Results. I reviewed the existing lending methodology and methods that banks use for lending. The literature mainly focuses on the design, principles and distinctions of financial models for lending from perspectives of borrowers. In the proposed financial model, lending is viewed from perspectives of banks. The model describes terms of a lending transaction, computes banks’ earnings on interests under loan agreements, additional financial terms of loans. I suggest applying the technique for assessing the effective margin adjusted for predicted proceeds from the transaction and the loan balance. I outline a mechanism for using financial covenant to assure the borrower fulfill terms of the deal. Conclusions and Relevance. Computations will be made more accurately if the production and financial operations of the borrower is considered in the predicted period and the way they influence terms of lending. There should be a correlation among the financial position, cash flows and demand for loans. Banks can use the model to assess terms of lending transactions and make lending decisions.
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Maloba, Michelle, and Abdul Latif Alhassan. "Determinants of agri-lending in Kenya." Agricultural Finance Review 79, no. 5 (October 7, 2019): 598–613. http://dx.doi.org/10.1108/afr-10-2018-0094.
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Purpose The purpose of this paper is to examine the factors that influence financial institutions’ lending to the agricultural sector in Kenya. Design/methodology/approach The paper employs a panel data of 15 licensed financial institutions (commercial banks and deposit-taking microfinance institutions) from 2011 to 2016. The random effects and ordinary least squares panel corrected standard errors estimation techniques are employed to estimate the effect of liquidity, size, equity, lending rate (LR), type of financial institution and non-performing loans on agri-lending. Findings The results indicate that only 3.9 per cent of loan portfolio of the sampled financial institutions were advanced to the agricultural sector over the study period. From the panel regression analysis, the paper finds agricultural credit risk to reduce lending to the agricultural sector while size, LR and type of financial institution were observed to significantly increase agricultural lending. Compared to 2011, agri-lending was also observed to have declined between 2012 and 2015. Practical implications The findings highlight important indicators for enhancing lending to the agricultural sector in Kenya and other emerging economies. Originality/value As far as the authors are concerned, this presents the first empirical evidence on the determinants of agri-lending by financial institutions in Kenya.
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Rosenblum, Robert H., Susan A. Gault-Brown, and Amy B. Caiazza. "Peer-to-peer lending platforms: securities law considerations." Journal of Investment Compliance 16, no. 3 (September 7, 2015): 15–18. http://dx.doi.org/10.1108/joic-06-2015-0038.
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Purpose – To provide an overview of the basic model used by many peer-to-peer lending platforms and some of the key peer lending regulatory and structuring considerations under the federal securities laws. Design/methodology/approach – Explains how the basic peer lending model works, how “borrower dependent notes” or “BDNs” may be offered in private placements or less commonly through public offerings, how companies engaged in peer lending are compensated, how sponsors of peer lending programs generally avoid registration as broker-dealers under the Securities Exchange Act of 1934, as investment advisers under the Investment Advisers Act of 1940 and as investment companies under the Investment Company Act of 1940, and how peer lending platforms are structured to take into account the laws that govern online transactions, consumer privacy, and other related issues. Findings – The authors expect that peer-to-peer lending platforms will continue to mature and evolve, and they expect that the issues discussed in this article will continue to drive their structuring decisions, business models, and regulatory compliance under the federal securities laws. Originality/value – Practical guidance from experienced financial services lawyers.
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ZAKAYO, ALICE, and IBRAHIM TIRIMBA ONDABU. "Effect of Lending on the Financial Performance of Commercial Banks Listed at the Nairobi Securities Exchange." International Journal of Finance 7, no. 6 (November 3, 2022): 1–36. http://dx.doi.org/10.47941/ijf.1110.
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ABSTRACT
Purpose: This study aimed at determining how check-off lending, group lending, collateral lending and mobile lending affects the financial performance of commercial banks in Kenya. A descriptive survey research design was employed in the study with the target population comprising of 12 commercial banks listed in Nairobi Securities Exchange.
Methodology: A total of 48 employees in the credit and lending department in the selected commercial bank formed the target respondents and with the study utilizing both primary and secondary data. Primary data was gathered through five point Likert scale questionnaires while secondary data was collected from audited reports and CBK financial reports for the period between 2017 and 2021. Both descriptive and inferential statistics were utilized in analyzing the data collected. SPSS and multi-linear regression model were used to analyze the data and which was presented by use of tables and figures.
Findings: The study established that check-off lending, group lending, collateral lending and mobile lending positively and significantly affects financial performance of commercial. The results bear the implications that increasing the any of the independent variable with one unit results to an increase in the levels of financial performance with the respective beta value.
Unique contribution to theory, practice and policy: The study provides that commercial banks’ performance can be enhanced through various lending practices that formed the independent variables of this study and hence resonates with commercial banks to take lending seriously as it is a cash cow to their products’ offering.
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Rae, Alasdair. "The illusion of transparency: the geography of mortgage lending in Great Britain." Journal of European Real Estate Research 8, no. 2 (August 3, 2015): 172–95. http://dx.doi.org/10.1108/jerer-08-2014-0030.
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Purpose – The purpose of this paper is to provide a comprehensive overview of the geography of mortgage lending in Great Britain. It uses a new mortgage dataset as a way to shed light on the spatial distribution of mortgage finance and to highlight the different lending patterns of seven major UK banks. It also examines the relationship between the distribution of mortgage finance and socio-economic status at the local level. Design/methodology/approach – The methodology is based on simple quantitative techniques, including spatial analysis, location quotient analysis and socio-economic classification. Lending data for Great Britain’s 10,000 postcode sectors are the basis for analysis here. Findings – The results suggest that some banks lend significantly less than others in poorer areas, but, owing to a lack of data, it is not possible to say why. It is possible to identify banks that appear to change their lending patterns in areas with different socio-economic characteristics. The paper concludes by reflecting on key messages and by making a small number of recommendations to improve transparency in the sector. Research limitations/implications – In the absence of demand-side metrics, it is not possible to determine which banks lend disproportionately high or low amounts in poorer areas. Practical implications – This paper has implications in relation to increasing financial transparency in the residential mortgage sector. The most important implication would be to highlight the fact that this new data – whilst a welcome development – is a long way from providing proper transparency in the mortgage lending sector. Originality/value – This paper fills a gap in the international literature in relation to our understanding of the geography of mortgage lending in a major world economy. It also highlights important differential lending patterns in relation to socio-economic status at the sub-national level.
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Debora, Debora. "Legal Protection On Consumers Of Fintech Peer To Peer Lending Due To Covid-19 Pandemic." Nagari Law Review 5, no. 1 (October 31, 2021): 69. http://dx.doi.org/10.25077/nalrev.v.5.i.1.p.69-75.2021.
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In March 2020, the WHO stated Covid-19 is pandemic disease. The Indonesian government has taken actions to prevent the spreading of Covid-19 by limiting people’s activities. Covid 19 has resulted in people who loans at lending institutions, having difficulty paying installments. The government issues policies in response to the Covid-19 effect, such as economic relaxation. However, the policy did not cover consumers Fintech Peer to Peer (P2P) Lending, this created a legal vacumm. The problem in this research is the urgency of legal protection for Fintech P2P lending consumers during pandemic Covid-19. The purpose of this research is for OJK policy to issue a stimulus to Fintech P2P Lending consumers. This research applied juridicial normative methodology. It uses secondary data, which consists primary legal material, namely the OJK regulations on Covid-19 prevention and related literature, analyzed descriptively analytically. The research shows that consumer fintech P2P lending are affected by Covid-19 pandemic, so they need to get legal protection, in the form of stimulus given to lenders and borrower of fintech P2P lending.
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Öhman, Peter, and Darush Yazdanfar. "Bank lending and housing prices in Sweden." International Journal of Housing Markets and Analysis 11, no. 3 (June 4, 2018): 498–519. http://dx.doi.org/10.1108/ijhma-07-2017-0063.
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Purpose The purpose of this study is to investigate the Granger causal link between bank lending and housing prices. Design/methodology/approach Several econometric methods, including Granger causality tests based on a vector error correction model, were applied to analyse monthly time series data in the Swedish context. The data cover bank lending, apartment prices, villa prices, mortgage rates and the consumer price index from September 2005 to October 2013. Findings The results indicate that bank lending and housing prices are cointegrated. According to Granger causality tests, bidirectional relationships exist between bank lending and each of apartment and villa prices, confirming the financial accelerator mechanism. However, earlier shocks arising from housing prices themselves account for the greatest variation in future prices. Originality/value To the authors’ knowledge, this study represents the first analysis of the causal link between bank lending and the housing market in terms of apartment and villa prices in the Swedish context.
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Starykh , S. A., S. A. Lavoshnikova , and A. D. Chesnokova. "MORTGAGE LENDING MARKET IN THE RUSSIAN FEDERATION: CURRENT STATE, PROBLEMS AND PROSPECTS." Region: systems, economy, management 2, no. 53 (2021): 72–78. http://dx.doi.org/10.22394/1997-4469-2021-53-2-72-78.
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Subject. The market of mortgage housing lending in the Russian Federation. Topic. The impact of the coronavirus pandemic on the mortgage lending market. Purpose. Analyze the housing mortgage lending market in the Russian Federation and identify the reasons for its explosive growth in the 3rd and 4th quarters of 2020. Methodology. Methods of comparative analysis of the housing mortgage lending market in the Russian Federation. Results. The possibility of the formation of a financial bubble in the real estate market in Russia is studied, and the probable prospects for the development of the mortgage market are evaluated Application area. The mortgage lending market, including the behavior of borrowers (buyers in the housing market) and the activities of credit institutions. Conclusions. The article analyzes the housing mortgage lending market in the Russian Federation and identifies the reasons for its explosive growth in the 3rd and 4th quarters of 2020. The article examines the impact of the coronavirus pandemic on the mortgage lending market, including the behavior of borrowers (buyers in the housing market) and the activities of credit institutions. The possibility of the formation of a financial bubble in the real estate market in Russia is studied, and the probable prospects for the development of the mortgage market are evaluated. Keywords: mortgage lending, deferred demand, financial bubble, coronavirus pandemic, mortgage lending rate, key rate, average credit rating of the borrower, overdue debt, bankruptcy, reserves for possible losses.
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Arvidsson, Niklas, Sara Jonsson, and Lotta Karin Snickare. "The transaction-relationship paradox." Managerial Finance 45, no. 9 (September 9, 2019): 1253–71. http://dx.doi.org/10.1108/mf-01-2019-0024.
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Purpose The purpose of this paper is to apply a capability perspective to investigate the shift from relationship lending to transaction lending in a bank’s corporate segment. The authors investigate the impact of three operational capabilities: assisting corporate clients in funding and business operations, management of customer relationships and internal cooperation on performance in relationship and transaction lending. Design/methodology/approach The primarily empirical material comprises longitudinal survey data, collected on three occasions during the period 1998 throughout 2001 from one of Sweden’s largest banks. Data are analyzed using factor analysis and OLS regression. Findings Results show that the effects of the three capabilities are contingent on the type of lending strategy: In relationship lending, assisting corporate clients has no significant direct effect on performance; however, it has an indirect effect on performance via the management of customer relationships. In transaction lending, assisting corporate clients has a direct effect on performance, and this effect becomes stronger as the transaction strategy is further implemented. The results also show that the direct effect of the management of customer relationships and cooperation on performance is significant in both strategies; however, the relation is stronger in relationship lending compared with transaction lending. Originality/value The findings indicate that the choice of lending strategy is more complex than a choice between a strict relationship strategy and a strict transaction strategy and that a strategy that leads to competitive advantage includes elements of both strategies.
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Andryakov, A., E. Gurvich, and A. Chernyavsky. "Agreement of Macroeconomic Forecasts in the Methodology of the System of National Accounts." Voprosy Ekonomiki, no. 8 (August 20, 2006): 65–81. http://dx.doi.org/10.32609/0042-8736-2006-8-65-81.
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In this paper the authors propose the model of agreement (financial balance) of macroeconomic forecasts, budget plans and balance of payments forecasts and the results of experimental calculations of this model for 2006-2008. The urgency of working out special instruments of such agreement is connected with increasing quality demands for medium-term budget plans. The proposed model is increasing the capacities of macroeconomic forecasts qualitative analysis; it explicitly contains resources of consumption and accumulation for major sectors of the economy and the economy as a whole. The financial balance is harmonized with the System of National Accounts and may be used for complex evaluation of the fiscal policy. In particular, it is possible to evaluate the influence of changes in tax regulation on macroeconomic and balance of payments indexes. The model contains net lending / net borrowing indexes for the sectors of the economy and on this base one can make conclusions about lending and borrowing capacities of the given sectors in future.
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Utami, Ami Fitri, and Irwan Adi Ekaputra. "A paradigm shift in financial landscape: encouraging collaboration and innovation among Indonesian FinTech lending players." Journal of Science and Technology Policy Management 12, no. 2 (January 18, 2021): 309–30. http://dx.doi.org/10.1108/jstpm-03-2020-0064.
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Purpose This paper aims to examine about the nature and strategy of current competitive dynamics by FinTech lending Indonesia players. Design/methodology/approach This paper uses both primary and secondary data. Interviews of several executives of a FinTech lending firm are done to gain direct insight of how the firms strategize their business operation. On the other hand, secondary data from internet search (e.g., OJK’s Website, FinTech Lending firm’s websites) are used to grasp the overview of the industrial landscape. Findings The study confirms that differentiation, collaboration, compliance and strong internal resources (e.g. team and funding) are the most pivotal elements for FinTech lending success. The study also confirmed the FinTech lending industrial landscape as an emerging and fragmented industry. Research limitations/implications This paper offers an original and detailed solution about how the FinTech lending company strategies may survive in a dynamic competition. The paper also shows the industrial analysis of the FinTech lending industry, which is rarely discussed in previous research. However, this study only focused on the lending sub-sector of FinTech, and the sample for primary data is highly limited (only three interviews). Practical implications This paper proposes a strategy that can be conducted by FinTech lending companies to achieve their business goals, including business growth, profits and improve financial inclusion in Indonesia. This perspective can act as a means to create practical modus operandi for policymakers and practitioners, especially FinTech lending companies in Indonesia. Originality/value This paper offers an original and detailed solution about how the FinTech lending company strategies may survive in adynamic competition. This study also provides a theoretical framework for use in further empirical research into the process of resource mobilization from FinTech lending Indonesia companies.
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Hassan, M. Taimoor, Mudassar Zaid, Muhammad Waqas, Sayyida Rahat Rafique, Muntaha Tathir, Aiman Tanveer, Asma Hameed, and Abia Anwar. "SME Lending: A Long Term Commitment towards the Development of Industry." International Journal of Learning and Development 2, no. 2 (April 4, 2012): 71. http://dx.doi.org/10.5296/ijld.v2i2.1589.
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Purpose: The basic purpose is to find out the impacts of SME lending on their development. While conducting the research, a clear objective was established in order to explore the relationship between SME lending and its ultimate impact on the development of SME sector in Bahawalpur, considered as SME Concentrated market of the economy. Design/methodology/approach: The research have been conducted utilizing the actual data with the help of a questionnaire based on the literature studies extensively on SME’s lending and the impact on its development to explore the attributes which leads towards the establishment of SME’s lending in Bahawalpur region. A new dimension is added by conducting research on SME’s lending and the impact on its development in Bahawalpur region, taking sample of 100 respondents from 20 banks and their customers. Findings: Factors abstracted from the market concentration, commercial vs. SME’s lending, issues of SME’s lending, Term of loan, size of enterprises, self employment in SME sector that they are significantly associated with SME’s establishment. Research limitations/ implication: The results found are based on available material being studied. A structured questionnaire has been used to collect data from a sample of 100 SMEs being financed by financial institutions of Bahawalpur region. Practical implications: The financial institutions in Pakistan are needed to take initiative in creating awareness about SME’s lending and providing more effective services to their customers. The results can be generalized on over all SME lending practices in Bahawalpur region. The facilities to cottage industry could be made from the effective use of findings in this paper. Originality/ value: This is one of the very first researches on SME’s lending and the impact on its development conducted in Bahawalpur region and could be very useful for countries adopting SME’S lending. Key words: SME lending, SME’s establishment, Cottage industry, SME Financing, Small Loans.
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Hu, Huajing, Yili Lian, and Chih-Huei Su. "Do bank lending relationships affect corporate cash policy?" Review of Accounting and Finance 15, no. 4 (November 14, 2016): 394–415. http://dx.doi.org/10.1108/raf-11-2015-0167.
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Purpose The purpose of this paper is to examine whether prior bank lending relationships affect firms’ liquidity management. Design/methodology/approach The authors mainly work on evaluating first, whether prior lending relationships affect corporate cash holdings? and second, whether the cash flow sensitivity of cash varies systemically with lending relationships. Three different ways are used to define lending relationships, including the lending relationship dummy, a firm’s maximum relationship intensity in terms of number of deals across all lenders and a firm’s maximum relationship intensity in terms of dollar amounts across all lenders. In addition, the paper applies two-stage least squares (2SLS) to address the concern of endogeneity between firms’ liquidity management and banking relationships. Findings The authors find that firms with lending relationships maintain a lower level of cash holdings and save less cash out of cash flow. Furthermore, the effect of lending relationships is more profound for firms with high cash flow. The results suggest that prior lending relations alleviate information asymmetry, lower the cost of capital and therefore affect firms’ propensity to retain cash and maintain a high level of cash holdings. Research limitations/implications This paper contributes to both the liquidity management literature and the literature on the value of maintaining lending relationships with banks. Researchers should take into consideration the lending relationships built over the course of the lending when assessing firms’ cash policies. Social implications Bank lending relationship mitigates the information asymmetry problem, one type of market friction, and facilitates firms’ future external financing, thereby affecting firms’ cash policies and giving more flexibility in liquidity management. The value of lending relationships distinguishes bank loans from public bonds. Therefore, firms, especially those facing more information asymmetry issue, should take into account the benefits from lending relationships in their future debt financing. Originality/value Extant literature examines how firm characteristics affect firms’ cash holdings. This paper introduces a new factor that could explain corporate cash policy.
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Abaidoo, Rexford. "Expectations, uncertainty and risk premium." Journal of Financial Economic Policy 9, no. 3 (August 7, 2017): 338–52. http://dx.doi.org/10.1108/jfep-12-2016-0096.
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Purpose This study aims to examine short- and long-run effects of specific macroeconomic conditions on risk premium estimates on lending. Design/methodology/approach Empirical estimates are based on error correction and autoregressive distributed lag models. Findings The results suggest that, in the short run, inflation expectations, recession expectations and actual inflationary conditions tend to have a significant impact on risk premium estimates; in the long run, however, only inflation expectations and recession expectations are significant in risk premium estimates on lending. Originality/value This study examines how specific conditions of uncertainty and expectations influence variability in risk premium estimates on lending in the US economy.
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Sukma, Aulya, Marlina Marlina, and Agus Kusmana. "Analisis Bank Specific Factor terhadap Penyaluran Kredit Perbankan Konvensional." Jurnal Akuntansi, Keuangan, dan Manajemen 2, no. 4 (September 25, 2021): 293–307. http://dx.doi.org/10.35912/jakman.v2i4.463.
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Abstract Purpose: This research aimed to discover the influence between capital, credit risk, liquidity, and efficiency towards credit lending. Research methodology: This research includes quantitative research. The objects in this research were commercial banks listed on the Indonesia Stock Exchange (IDX), with 36 commercial banks chosen as the samples within the 2017 – 2019 period. Research hypotheses were tested with a significance level of 5% by using a panel data regression model and assisted by E-Views 11 program. Results: The result obtained within this research are (1) there is an influence between capital and credit lending, (2) credit risk does not influence credit lending, (3) liquidity has influence credit lending, and (4) efficiency does not have any influence with credit lending. Limitations: The limitations of this research were the least amount of former research both nationally and internationally containing a detailed explanation about a similar topic. Contribution: The result obtained can be used for the next researcher's references, also used as a bank’s consideration on operating their main operational activity, which is credit lending, and for investor's consideration while intended to invest in the banking sector.
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Gholipour, Hassan F., Elias Oikarinen, and Reza Tajaddini. "Banks’ lending to public and private sectors and house prices: does bank ownership matter?" International Journal of Housing Markets and Analysis 13, no. 2 (June 22, 2019): 227–49. http://dx.doi.org/10.1108/ijhma-01-2019-0006.
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Purpose The purpose of this study is to examine the interaction between banks’ lending to public and private sectors and house prices using data from the Iranian banking system including, commercial government-owned banks (CGBs), specialized government-owned banks and private banks. Design/methodology/approach The authors use quarterly data from the second quarter of 2004 to the first quarter of 2016 and apply structural vector autoregression models. Findings The results show that: a positive shock to the loan supply to the private sector triggers a positive response from house prices; a positive shock to the loan supply to the public sector does not trigger a positive response from house prices; house price appreciations contribute significantly to banks’ lending to the public sector but not lending to the private sector; each loan supply by three different types of banks influences house prices positively; and CGBs’ lending to the private sector does not respond to house price shocks. Originality/value Although the relationship between banks’ lending and house prices is well-established in the literature, existing studies have not yet examined whether bank ownership matters for the link between banks’ lending and house prices.
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Downing, Jeff. "Fair-value accounting, asset sales and banks’ lending." Studies in Economics and Finance 35, no. 1 (March 5, 2018): 163–77. http://dx.doi.org/10.1108/sef-10-2017-0294.
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Purpose This paper aims to examine the interaction between fair-value accounting, asset sales and banks’ lending in booms and busts. Throughout, the author uses “fair value” and “mark-to-market” interchangeably, to denote an accounting regime where changes in the prices of banks’ assets affect regulatory capital. “Historic-cost accounting” has been used in the paper to denote an accounting regime where changes in asset prices do not affect regulatory capital. Design/methodology/approach The author built a model that examines how the accounting regime affects banks’ incentives to sell assets and how the impact of the accounting regime on asset sales affects lending. Findings In a bust, fair value strengthens banks’ incentives to sell assets. The resulting increase in sales increases banks’ lending capacity. Consequently, lending can be higher under fair value. Conversely, in a boom, historic cost strengthens banks incentives to sell assets. The resulting increase in sales increases banks’ lending capacity. Hence, lending can be higher under historic cost. Originality/value This paper identifies a new channel through which the accounting regime could affect lending. The accounting regime can affect banks’ incentives to sell assets. The resulting difference in sales can affect banks’ ability to make new loans. Hence, in a boom, although banks book mark-to-market gains under fair value, asset sales could be higher under historic cost. Lending, thus, could be higher under historic cost. Conversely, in a bust, although banks book mark-to-market losses under fair value, sales could be higher under fair value. Lending, thus, could be higher under fair value.
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Leathers, Charles G., J. Patrick Raines, and Heather R. Richardson-Bono. "Natural experiments and debt-driven financial crises: mortgage finance booms in the 1920s and 2000s." International Journal of Social Economics 42, no. 4 (April 13, 2015): 340–55. http://dx.doi.org/10.1108/ijse-12-2013-0282.
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Purpose – The role of debt in episodes of financial stability is a topic of increasing important as the global economy struggles to recover from the worst crisis since the Great Depression of the 1930s. The purpose of this paper is to examine the mortgage finance booms of the 1920s and 2000s as natural experiments, new insights into debt-driven financial crises are gained. Design/methodology/approach – The general methodology is interpreting anomalous historical events as natural experiments. The specific methodology is the approach to natural experiments provided by Joseph A. Schumpeter and Milton Friedman. The hypothesis tested is that laxity in lending standards was the prime contributor to the mortgage debt booms. In each case, we explain why factors other than laxity in lending standards would be secondary factors, with the pre-boom and post-boom lending standards providing the control groups of natural experiments. The two episodes of mortgage debt booms occurring under very different general economic and financial conditions provide an especially strong test of the hypothesized functional relationship. Findings – The results of the two natural experiments support the hypothesis that lax lending standards were the prime contributors to the two episodes of debt-driven financial crisis. Originality/value – From a social economics perspective, the insights gained are important because a major social goal has been to encourage greater opportunities for home ownership. The results of these natural experiments provide guidance for policymakers in the search for a viable balance between achieving that social goal and maintaining financial stability.
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Miyajima, Ken. "What influences bank lending in Saudi Arabia?" Islamic Economic Studies 27, no. 2 (April 30, 2020): 125–55. http://dx.doi.org/10.1108/ies-07-2019-0018.
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PurposeDeterminants of credit growth in Saudi Arabia are investigated.Design/methodology/approachA panel approach is applied to macroeconomic and bank-level data spanning 2000 ‐15.FindingsBank lending is supported by strong bank balance sheet conditions (high capital ratio, and growth of NPL provisioning and deposits), and higher growth of both oil prices and non-oil private sector GDP. Lower bank concentration also helps, likely through greater competition, so does stronger institution. Consistent with the literature, lending by Islamic banks may be more responsive to economic activity. Lending remained robust in 2015 despite oil prices having declined, helped by strong bank balance sheets and as banks reduced their holdings of “excess liquidity”. To support bank lending in the period ahead, bank balance sheets need to remain strong. Fiscal adjustment and a reduced reliance on banks to finance the budget deficit would support credit provision to the private sector.Originality/valueThe paper is first to analyze in detail determinants of bank lending in Saudi Arabia applying a panel approach to bank level data, and draws critical policy implications.
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Zavadska, Diana. "Improvement of the assessment methodology of the lending potential of Ukraine's banks." Scientific Bulletin of the Odessa National Economic University 1-2, no. 274-275 (2020): 10–27. http://dx.doi.org/10.32680/2409-9260-2020-1-2-274-275-10-27.
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Elul, Ronel. "The Color of Credit: Mortgage Discrimination, Research Methodology, and Fair‐Lending Enforcement." Economic Journal 114, no. 499 (October 18, 2004): F541—F544. http://dx.doi.org/10.1111/j.1468-0297.2004.00258_4.x.
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Nesiba, Reynold F. "The Color of Credit: Mortgage Discrimination, Research Methodology, and Fair-Lending Enforcement." Journal of Economic Issues 37, no. 3 (September 2003): 813–15. http://dx.doi.org/10.1080/00213624.2003.11506619.
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Stern, Caroline, Mikko Makinen, and Zongxin Qian. "FinTechs in China – with a special focus on peer to peer lending." Journal of Chinese Economic and Foreign Trade Studies 10, no. 3 (October 2, 2017): 215–28. http://dx.doi.org/10.1108/jcefts-06-2017-0015.
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Purpose China is a country with the most number of operating peer-to-peer (P2P) lending platforms (approximately 2,000) worldwide. This study aims to provide an overview on FinTechs in China. It was examined why payment services and P2P lending are so popular in China and what are the determinants for the emergence of P2P lending platforms in different provinces in China. Design/methodology/approach This study conducted a descriptive analysis of P2P lending in China and an empirical analysis of determinants of P2P lending in China. Findings This descriptive analysis shows that the surge in the number of the P2P platforms in China follows an inverted U-shaped phenomenon. However, the outstanding balances of P2P lenders is still increasing, while average yields of P2P lenders have sharply plunged. The empirical findings indicate that P2P lending is more extensive in the region with more mobile phone subscriptions; outstanding balance of P2P lenders in region is negatively associated with the size of traditional banking sector; and the number of the P2P platforms in negatively related to the fixed assets investments in region, whereas average yield is positively associated with the fixed assets investments. Originality/value Currently, almost no research papers with empirical analysis of FinTechs, especially P2P lenders, exist. This study estimates a simple model to find determinants of P2P lending.
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Alipour-Hafezi, Mehdi, and Hamid Reza Khedmatgozar. "E-lending in digital libraries: a systematic review." Interlending & Document Supply 44, no. 3 (August 15, 2016): 108–14. http://dx.doi.org/10.1108/ilds-01-2016-0001.
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Purpose The purpose of this paper is to systematically review e-lending research studies in the digital library domain to identify their subjects, existing research gap and their research methods. Design/methodology/approach This is a systematic review. Through several stages of searching in related databases, 30 research works including journal and conference research papers, theses and dissertations, research and technical reports were identified and reviewed based on the guidelines of systematic review protocols. Findings It was found that research in e-lending domain is growing, and the subject will receive greater attention in the near future. Studies were in the following four categories: e-books (specifications, creation and software and viewpoints), business models, e-book status in libraries and copyright issues, e-book lending and inter-library loan. Some research gaps were identified including e-lending domain, business models and legislation. Little has been done with qualitative and mixed approaches in terms of research methods. Moreover, findings showed that this area has received less attention in developing countries. Originality/value This is the first review of the e-lending domain in digital libraries. It identifies the key works related to e-lending, categorizes them, provides an overview and identifies emerging research issues.
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Moyi, Eliud. "Riskiness of lending to small businesses: a dynamic panel data analysis." Journal of Risk Finance 20, no. 1 (January 21, 2019): 94–110. http://dx.doi.org/10.1108/jrf-09-2017-0140.
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Purpose The study aims to pose the question: Has lending to small businesses been a source of increased risk in microfinance institutions (MFIs)? This question is pertinent given the higher levels of perceived riskiness of lending to small business operators owing to their opacity. Design/methodology/approach The study accommodates panel bias by using system generalised method of moments (GMM) estimators on micro-level data from 2004 to 2014. Findings Study findings indicate that lending to small businesses by MFIs does not affect credit and insolvency risk in these institutions. However, using disaggregated data, there is evidence that lending to small businesses by cooperatives significantly reduces their insolvency risk exposure. Conversely, lending to small business by micro-banks, cooperatives, non-bank financial institutions and non-governmental organizations does not significantly affect their risk exposure. Practical implications These findings imply that the technologies that have been used by MFIs in lending to small enterprises have helped them mitigate the problems of adverse selection and moral hazard. Originality/value Information economics theory postulates that small firms are excluded from formal financial markets owing to their opacity. The hypothesis has not attracted much empirical research interest; hence, this study aims to bridge this gap in knowledge.
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Zakayo, Alice, and Ibrahim Tirimba. "Effect of Lending on the Financial Performance of Commercial Banks Listed at the Nairobi Securities Exchange." International Journal of Finance 7, no. 6 (October 24, 2022): 1–25. http://dx.doi.org/10.47941/ijf.1086.
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Purpose: The general objective of this research was to investigate the effects of lending on the financial performance of commercial banks listed at the Nairobi Stock Exchange in Kenya. The specific objectives in this study was to determine how check-off lending, group lending, collateral lending and mobile lending affects the financial performance of commercial banks in Kenya. The study was anchored on Merton’s Default Risk Theory, Financial Intermediation Theory, Stakeholder’s Theory and Task-Technology-fit Theory (TTF).
Methodology: A descriptive survey research design was employed in the study with the target population comprising of 12 commercial banks listed in Nairobi Securities Exchange. The unit of observation comprised of employees in Credit and Lending Department in the selected commercial banks. Two employees from each department were randomly selected and involved in the study. A total of 48 employees were targeted in the study. This study utilize both primary and secondary data. Primary data was gathered through a five point likert scale questionnaire administered to the unit of observation of the study. Secondary data was collected from audited reports and CBK financial reports for the period between 2017 and 2021. Both descriptive and inferential statistics were utilized in analyzing the data collected. Descriptive statistics comprised of frequency distributions and measures of central tendency (mean and standard deviation). Inferential statistics were used to examine the casual relationships between lending and the banks financial performance. The statistics were generated through SPSS.
Findings: The results of the study were displayed in form of tables and figures. The study established that check-off lending, group lending, collateral lending, and mobile lending positively and significantly affects financial performance of commercial. The results bear the implications that increasing the each of the independent variable with one unit results to an increase in the levels of financial performance with the respective beta value.
Unique contribution to theory, practice and policy: The study recommended that NSE listed commercial banks should enhance the lending practices since this practice results in enhanced performance levels. The study recommends further research on non- lending indicators that affect financial performance of the listed commercial banks and which possibly accounts for the remaining percentage of 32.9%.
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Rosavina, Monica, Raden Aswin Rahadi, Mandra Lazuardi Kitri, Shimaditya Nuraeni, and Lidia Mayangsari. "P2P lending adoption by SMEs in Indonesia." Qualitative Research in Financial Markets 11, no. 2 (May 7, 2019): 260–79. http://dx.doi.org/10.1108/qrfm-09-2018-0103.
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Purpose This study aims to examine the adoption of peer-to-peer (P2P) lending platforms to determine the factors that encourage SMEs to use P2P lending platforms in obtaining loans. Design/methodology/approach A sample of ten SMEs from a variety of backgrounds was taken in Bandung, Indonesia. Bandung has been awarded the title of “creative city” by UNESCO, as the city allows for the development of the creative economy. This research used a semi-structured interview. Coding method was then used for content analysis to establish which factors emerging from the interview were leading respondents to obtain a loan through the P2P lending platform. Findings The findings imply that loan processes, interest rates, loan costs, loan amounts and loan flexibility affect SMEs in obtaining a loan through P2P lending. Moreover, alternative payment schemes in the form of Sharia-based lending and profit-sharing schemes were found. These findings constituted the original findings of this study. Research limitations/implications The study offers findings on factors affecting SMEs in using the P2P lending platform as a form of alternative financing. Moreover, the theoretical framework provided can be used as literature in future research. As this study was conducted in Bandung, Indonesia, the findings may not be generalisable to other regions. Originality/value This study is one of the few studies that discusses P2P lending in Indonesia as the concept has been in practice only since 2015.
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Tang, Donny. "Has European monetary union influenced the European Union bank lending flows to the EU countries from Central and Eastern Europe?" Journal of Financial Economic Policy 11, no. 2 (May 7, 2019): 263–82. http://dx.doi.org/10.1108/jfep-05-2018-0080.
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Purpose The purpose of this study is to modify the gravity model to identify the main determinants of the European Union (EU) bank lending to the Central and Eastern Europe (CEE) countries during 1994-2012. Design/methodology/approach This study uses both two-stage least squares and dynamic generalized method of moments to estimate the modified gravity model. Findings This study finds that the CEE countries with more developed stock markets have received the higher EU bank lending inflows. The EU banks have greater access to additional financing in the stock markets. Second, the higher stock market difference between the CEE and EU countries has boosted the EU bank lending. Compared to the developed EU stock markets, the less developed CEE stock markets have become more favorable to the EU banks seeking to earn higher profits. Research limitations/implications The CEE countries can further boost the EU bank lending inflows through deepening capital liberalization. They should facilitate easy foreign bank entry by reducing excessive bank legislations and regulations. Moreover, they can promote the EU bank lending through substantial EU bank integration. This can accelerate the major bank reform which would facilitate better bank supervision and regulations. Originality/value Most previous studies have primarily used the macroeconomic and institutional factors to explain the EU bank lending. In contrast, this study explores the growing importance of the CEE financial development and bilateral trade in explaining the EU bank lending.
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Pavlidis, Georgios. "Promoting responsible sovereign lending and borrowing: the role of sovereign wealth funds." Journal of Financial Regulation and Compliance 27, no. 4 (November 11, 2019): 443–52. http://dx.doi.org/10.1108/jfrc-11-2018-0151.
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Purpose This paper aims to investigate the idea of building responsible borrowing and lending into sovereign wealth fund (SWF) decision-making. SWFs, which currently manage US$8 trillion in assets, are influential institutional investors, but their role in sovereign debt markets needs to be further explored. In this context, this paper aims to critically assess the linkages and convergences between the Santiago Principles on SWF and the United Nations Conference on Trade and Development (UNCTAD) principles on responsible sovereign lending and borrowing. Design/methodology/approach This paper draws on legal scholarship, reports, policy papers and other open-source data to explore the role of SWFs in sovereign lending, borrowing and debt restructuring. Findings Building responsible borrowing and lending into SWF decision-making is feasible and justified on the grounds of both ethics and public duty. It is also justified in financial terms because it would protect SWFs from irresponsible lending and borrowing practices at the micro level while contributing to global financial stability at the macro level. Originality/value This is the first comprehensive study to juxtapose two important normative processes, the Santiago Principles and the UNCTAD Principles.
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Charnvitayapong, Kovit. "Thrift and Credit Cooperative Lending Channel under Prolonged Low-Interest Rates: The Case of Thailand." GATR Journal of Business and Economics Review (JBER) Vol. 5 (2) April-June 2020 5, no. 2 (September 30, 2020): 59–71. http://dx.doi.org/10.35609/jber.2020.5.2(2).
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Objective – Considerable research indicates that during times of prolonged low interest rates, commercial bank lending channels are less effective in conveying the impact of expansionary monetary policies. What is the impact of easy money policy through lending channels of non-banking financial institutions (NBFIs) such as thrift and credit cooperatives (TCCs) and why should this result occur? The objective of this study is to examine the effectiveness of monetary policy through TCC lending channels compared to bank lending channels from 2008 to 2017. Methodology/Technique – Annual data from 546 TCCs was used in this investigation. A fixed effects model for TCCs and random effect for banks were employed to examine the data. Two models of each institution, one with lagged interaction terms and the other with contemporaneous interaction terms, were tested and compared. The impact of institutional characteristics such as size, deposit, liquidity and equity, and macroeconomic variables such as GDP growth and yield spread, on lending channels were also examined. Finding – As expected, the results show that TCC lending channels respond positively to prolonged low interest rate policies, whilst bank lending channels respond negatively in one model. Thus, if monetary authorities wish to increase the effectiveness of expansionary monetary policy, TCCs should be allowed to develop under careful supervision. Novelty –This study concludes that incremental budgeting caused by regulation must be borne by TCCs. Type of Paper: Empirical. JEL Classification: E44 E51 E52 E58. Keywords: Thrift and Credit Cooperatives (TCCs); Prolonged Low-Interest Rates; Transmission Mechanism; Lending Channels; Fixed Effects. Reference to this paper should be made as follows: Charnvitayapong, K. 2020. Thrift and Credit Cooperative Lending Channel under Prolonged Low Interest Rates: The Case of Thailand, J. Bus. Econ. Review 5(2) 59 – 71 https://doi.org/10.35609/jber.2020.5.2(2)
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E. Brewer, Brady, Christine A. Wilson, Allen M. Featherstone, and Michael R. Langemeier. "Multiple vs single lending relationships in the agricultural sector." Agricultural Finance Review 74, no. 1 (April 29, 2014): 55–68. http://dx.doi.org/10.1108/afr-04-2013-0014.
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Purpose – The purpose of this paper is to examine the use of single vs multiple lenders by Kansas farms. Previous studies suggest that as the risk level of the firm changes, borrowers desire to enhance the probability of obtaining credit at the lowest possible cost may cause them to use multiple lenders. Design/methodology/approach – A model is adopted from the banking literature to describe farm behavior in obtaining credit from a single vs multiple lenders. Using farm-level data from the Kansas Farm Management Association, an empirical model analyzes how farm characteristics affect the number of lending relationships. A model is developed to analyze the number of lending relationships effect on the profitability of the farm. Findings – It is found that highly leveraged farms seek additional lending relationships supporting the theoretical model and that additional lending relationships correlate to a decrease in profitability. Roughly, 50 percent of Kansas farmers that borrow use a single lender. Roughly 48 percent use from two to four lenders, with the remaining 2 percent using more than four lenders. Originality/value – Provides empirical results to support developed theoretical framework on the number of lending institutions. This study helps understand factors correlated to a farmer's decision to use multiple lenders. Analyzing the number of lending relationships helps understand how farmers manage their debt to maintain access to credit when needed at the lowest possible cost.
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Boulanouar, Zakaria, Stuart Locke, and Mark Holmes. "An analysis of the SME–bank match made in heaven: the case of New Zealand main banks and their relationship-managed SMEs." Qualitative Research in Financial Markets 12, no. 4 (June 17, 2020): 391–411. http://dx.doi.org/10.1108/qrfm-12-2018-0139.
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Purpose The purpose of this paper is to answer the increasing calls to analyse how lending relationship between banks and their small- and medium-sized enterprises (SMEs) work. More precisely, the main aim is to investigate the lending approach(es) and criteria used by banks to assess loan applications from their relationship-managed (RM) SMEs’ clients. Other objectives include investigating the level of congruence in terms of lending practices and processes among the sample banks in New Zealand (NZ) and to discern how the assessment of the SME owner/manager is done within the relationship-banking framework. Design/methodology/approach The research objectives concern investigating processes and not variances. Thus, a qualitative research approach was used. Extensive data was collected via interviews across representative banks in NZ and thematic analysis was used to analyse the data. Findings The findings include a detailed analysis of how relationship banking actually works; how in NZ, the main bank brands use three criteria of lending (financials, security and character) as a framework of assessing loan applications from RM-clients – which is different from the character, capital, capacity, conditions, and collateral (5Cs) that are widely used and discussed as the framework of lending; and an elucidation as to why and how character assessment is different from the other criteria of lending. Originality/value To the best of authors’ knowledge, this is the first study to investigate the mechanisms and processes that banks use to deal with their RM-SMEs, show the existence of a different framework of lending other than the 5Cs and attempt an explanation as to why character evaluation is different from that of the other criteria of lending.
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Au, Cheuk Hang, Barney Tan, and Yuan Sun. "Developing a P2P lending platform: stages, strategies and platform configurations." Internet Research 30, no. 4 (April 17, 2020): 1229–49. http://dx.doi.org/10.1108/intr-03-2019-0099.
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PurposeOnline Peer-to-Peer (P2P) lending platforms are becoming increasingly popular globally in recent years. Our knowledge of how to develop and manage the digital platforms that make P2P lending possible, however, is limited. Through an in-depth examination of the strategies deployed and actions taken across the various stages of development of Tuodao, one of the most successful online P2P lending platforms in China, the purpose of this study is to develop a process model of P2P Lending Platform Development to address this knowledge gap.Design/methodology/approachThe case research method was adopted for this research, and a total of 16 informants were interviewed. The informants were composed of representatives of Tuodao’stop management, organizational IT functions as well as its various business units.FindingsOur study reveals that the development of a P2P lending platform can unfold in a specific sequence across three stages, and the development of a particular side of the platform should be emphasized in each stage (i.e. Partners, followed by Lenders, and then Borrowers). Each stage is also distinctive in terms of their strategies and platform configuration outcomes, which are elaborated on in our paper.Originality/valueOur process model contributes an in-depth view of how P2P lending platforms should be established and nurtured to complement the existing studies in this rapidly growing research area. In addition, our study also hints at the strategies that can facilitate the various stages. Our model can potentially serve as the foundation for formulating guidelines for the managers of P2P lending platforms, so that they are able to optimize the development of their platforms and extend the benefits of P2P lending to a broader base of customers.
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Orlova, Ekaterina V. "Methodology and Models for Individuals’ Creditworthiness Management Using Digital Footprint Data and Machine Learning Methods." Mathematics 9, no. 15 (August 1, 2021): 1820. http://dx.doi.org/10.3390/math9151820.
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This research deals with the challenge of reducing banks’ credit risks associated with the insolvency of borrowing individuals. To solve this challenge, we propose a new approach, methodology and models for assessing individual creditworthiness, with additional data about borrowers’ digital footprints to implement comprehensive analysis and prediction of a borrower’s credit profile. We suggest a model for borrowers’ clustering based on the method of hierarchical clustering and the k-means method, which groups actual borrowers having similar creditworthiness and similar credit risks into homogeneous clusters. We also design the model for borrowers’ classification based on the stochastic gradient boosting (SGB) method, which reliably determines the cluster number and therefore the risk level for a new borrower. The developed models are the basis for decision making regarding the decision about lending value, interest rates and lending terms for each risk-homogeneous borrower’s group. The modified version of the methodology for assessing individual creditworthiness is presented, which is to reduce the credit risks and to increase the stability and profitability of financial organizations.
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Sitnikova, E. V., and D. E. Maksakov. "INTERREGIONAL ANALYSIS OF THE STATE AND DYNAMICS OF MORTGAGE LENDING." Region: systems, economy, management 2, no. 53 (2021): 174–81. http://dx.doi.org/10.22394/1997-4469-2021-53-2-174-181.
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Subject. Organizational and economic relations developing during the functioning of the housing market and mortgage lending. Topic. Interregional analysis of the state and dynamics of mortgage lending. Purpose. The purpose of the work is to develop directions for increasing the efficiency of mortgage lending as the most important tool for the development of the housing market. Methodology. The study was carried out using abstract-logical, comparative, economic and statistical approaches, a graphical technique for visualizing statistical and calculated data. Results. To analyze the state of mortgage lending at the regional level, the volume of issued mortgage loans in a territorial context was considered, the structure and dynamics of issued mortgage loans for individuals was studied, the debt on mortgage loans was revealed, the dynamics of the weighted average interest rate in each federal district was analyzed. The analytical review carried out in the study made it possible to draw conclusions about the state of development of mortgage lending in the regions, as well as to offer recommendations for its improvement. Application area. The results of the study, the main provisions, conclusions, recommendations are focused on widespread use by business entities in the process of assessing and analyzing their mortgage lending. Conclusions. The significance of this study is due to the need to identify the degree of development of mortgage lending, which is especially important at the regional level. The purchase of own housing, which will be available not only for certain categories of citizens, but also for the majority of the population of the Russian Federation, is ensured through the development of the mortgage lending market. This form of lending contributes to the satisfaction of not only the interests of the bank and citizens, but also allows to ensure financial flows to the development of the real sector of the economy. Keywords: mortgage, mortgage lending, credit organizations, banking sector, housing construction, debt, regional banking system.
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Agarwal, Sumit, and Yeow Hwee Chua. "FinTech and household finance: a review of the empirical literature." China Finance Review International 10, no. 4 (May 19, 2020): 361–76. http://dx.doi.org/10.1108/cfri-03-2020-0024.
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PurposeThis paper reviews recent advances in the empirical literature of FinTech and household finance.Design/methodology/approachWe survey the effects of FinTech on three different aspects of household finance: payments, lending and portfolio decisions. Specifically, we examine the impact of digital payments, mobile money, FinTech lending, marketplace lending, robo-advising and crowd-funding.FindingsStudies suggest that FinTech has positively benefited households by increasing consumption and borrowing. This allows them to smoothen their consumption across time. Furthermore, there is an improvement in their portfolio diversification. Nonetheless, there is also evidence that certain households overconsume and borrow beyond their means.Originality/valueDespite the importance of this topic, there has been a lack of empirical evidence until recently. In this paper, we take stock of the empirical evidence in the literature through the lens of household finance
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Nersesyan, M. G. "Forensic Lending Analysis in Loan Fraud Investigations." Theory and Practice of Forensic Science 13, no. 4 (December 27, 2018): 82–84. http://dx.doi.org/10.30764/1819-2785-2018-13-4-82-84.
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The methodology for criminal investigation of unlawfully obtained loans (Part 1, Part 2 of Article 176 and Article 159.1 of the Criminal Code of the Russian Federation) includes the stage of appointment and conduct of forensic economic assessment. The effectiveness of this stage depends on a number of factors: the proper choice of the type of examination by the commissioning law enforcer, their understanding of its subject matter and the tasks to be completed. The article outlines the range of tasks facing forensic lending analysts assigned to assist investigators in this category of cases. Based on expert practice, the author articulates specific questions related to compliance with lending principles, establishing a borrower’s credit rating, (mis)use of loan proceeds, outstanding debt, etc.
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Ghosh, Saibal. "Partial privatization, lending relationships and executive compensation." South Asian Journal of Global Business Research 5, no. 1 (March 7, 2016): 125–53. http://dx.doi.org/10.1108/sajgbr-11-2014-0075.
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Purpose – Privatization has been a widely researched topic in the literature, both at the cross-country level as well as at the level of individual countries. However, the issue of partial privatization – where an entity is publicly listed although the government remains the controlling owner – has not been adequately discussed in the literature. The purpose of this paper is to employ data on Indian state-owned banks during 1992-2010 to explore the timing and intensity of privatization. Contextually, the authors also explore several associated hypotheses, such as the behavior of lending relationships by these banks and executive compensation. Design/methodology/approach – Given the hypotheses being discussed, the authors use suitable methodology relevant to the hypothesis. Accordingly, the authors employ proportional hazard models to address the timing issue and the Tobit model to determine the factors impacting the intensity of privatization. As regards lending relationships, the authors employ ordered logit and Poisson regression models. Finally, the issue of executive compensation is addressed using OLS regression. Findings – The evidence appears to suggest that smaller, riskier banks with higher levels of over-staffing are likely to be privatized at an early date. Among the political factors, the findings suggest that both the timing of elections as well as the fragmentation of the coalition impacts the timing of privatization. Regarding lending relationships, the analysis indicates that it is typically the large banks that act as the main bank for both foreign and state-owned firms. Finally, the evidence lends credence to the fact that bigger well-capitalized banks with smaller boards pay higher compensation. Originality/value – How far do economic and political factors play a role in impacting the timing of partial privatization of state-owned banks remains an open empirical question. There is also admittedly limited evidence as to how bank-specific and political factors influence the intensity of privatization. Judged thus, to the best of the knowledge, this is one of the few studies to examine these issues within a coherent empirical framework for a leading emerging economy.
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Menshchikova, V. I. "Problems of Lending to Small and Medium-Sized Businesses during the COVID-19 Pandemic." Voprosy sovremennoj nauki i praktiki. Universitet imeni V.I. Vernadskogo, no. 1(79) (2021): 089–97. http://dx.doi.org/10.17277/voprosy.2021.01.pp.089-097.
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The article examines the problems of lending to small and medium-sized businesses, aggravated by the COVID-19 pandemic. The research methodology is based on general scientific methods of cognition, methods of comparative analysis, as well as such methodological tools as: analytical introspection, theoretical knowledge, statistical analysis. It is concluded that in recent years, due to the increase in the volume of loans issued to small and medium-sized businesses, there is a decrease in interest rates on loans issued to them, but at the same time there was a decrease in the number of small and medium-sized businesses. It was determined that due to the growth of lending activity of small enterprises, not only the total volume of loans issued, but also the amount of overdue debts increased. It was revealed that the coronavirus pandemic has exacerbated the existing lending problems for small and medium-sized businesses. It is concluded that state support today seems to be a key mechanism for solving not only the problems of lending to small and medium-sized businesses, but also their further functioning.
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Calomiris, Charles W., Douglas Holtz-Eakin, R. Glenn Hubbard, Allan H. Meltzer, and Hal S. Scott. "Establishing credible rules for Fed emergency lending." Journal of Financial Economic Policy 9, no. 3 (August 7, 2017): 260–67. http://dx.doi.org/10.1108/jfep-01-2017-0006.
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Purpose The purpose of this paper is to propose reforms that would establish a credible framework of rules to constrain and guide emergency lending by the Federal Reserve and by fiscal authorities during a future financial crisis. Design/methodology/approach The authors propose a set of five overarching rules, informed by history, empirical evidence and theory, which would serve as the foundation on which detailed legislation should be constructed. Findings The authors find that the current framework governing emergency lending – including reforms to Federal Reserve lending enacted after the recent crisis – is inadequate and not credible, and that their proposed framework would constitute a credible balancing of costs and benefits. Practical implications Adequate assistance to financial institutions would be provided in systemic crises but would be limited in its form, and by the process that would govern its provision. Originality/value This framework would serve as a basis for establishing effective rules that would be credible, and that would properly balance the moral-hazard costs of emergency lending against the gains from avoiding systemic collapse of the financial system.
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Bauer, Keldon, and Omar A. Esqueda. "Credit ratings, relationship lending and loan market efficiency." Studies in Economics and Finance 34, no. 1 (March 6, 2017): 122–42. http://dx.doi.org/10.1108/sef-06-2016-0149.
Full textAbstract:
Purpose Using the small-business loan market, this paper aims to test whether a structural shift in access to borrowers’ financial information (i.e. credit ratings) improves market efficiency, thereby improving entrepreneurs’ access to external capital. Design/methodology/approach This research uses the National Survey of Small Business Finance in a conditional logistic regression framework to tease out the marginal propensity to grant lines of credit given the firm’s credit rating – treating both of the events, namely, line of credit and credit ratings, as endogenous variables. This methodology overcomes potential reverse causality issues. Findings The results show that information brokers have allowed small firms to break away from long-term monopolistic lending relationships, thus contributing to more informationally efficient markets. Small businesses benefit from better-informed lenders by having better access to capital. Also, women appear less likely to receive a line of credit even after adjusting for credit ratings. Practical implications This research highlights the importance of credit report awareness/monitoring by entrepreneurs, as the small-business credit rating grows rapidly. Relationship lending is not enough to reach optimal financing costs. These papers call for more regulated credit ratings industry to reduce potential moral hazards. Originality/value This paper tests whether bank lending relationships (soft information) still matter after accounting for credit ratings (hard information). Additionally, this study measures the extent to which information sharing by data services bureaus, a proxy for informational efficiency, has increased allocation efficiency in the small-business loan market.