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1
Patel, Pankaj C., and John A. Pearce. "Franchisees and Loan Default on Third-Party Guarantee Loans: Evidence From the United States." Entrepreneurship Theory and Practice 44, no. 5 (May 23, 2019): 861–77. http://dx.doi.org/10.1177/1042258719853508.
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We test the inefficient risk-bearing hypothesis—that third-party loan guarantors bear a higher risk on loans to franchisees than on loans to independent businesses—by assessing whether franchisees default more than independent businesses on third-party guarantee loans. In a sample of 428,233 SBA 7(a) loans disbursed between 2000 and 2016, franchisee loans, compared to independent business loans, with a higher percentage of the loan guarantee or made 1 to 2 years before a recession have a higher likelihood of default. The findings imply a distinctive loan default risk profile for franchisee loans.
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Lorenčič, Eva, and Mejra Festić. "The Impact of Seven Macroprudential Policy Instruments on Financial Stability in Six Euro Area Economies." Review of Economic Perspectives 21, no. 3 (September 1, 2021): 259–90. http://dx.doi.org/10.2478/revecp-2021-0012.
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Abstract The aim of this paper is to investigate whether macroprudential policy instruments can influence the credit growth rate and hence financial stability. We use a fixed effects panel regression model to test the following hypothesis for six euro area economies (Austria, Finland, Germany, Italy, Netherlands and Spain) during time span 2010 Q3 to 2018 Q4: “Macroprudential policy instruments (degree of maturity mismatch; interbank loans as a percentage of total loans; leverage ratio; non-deposit funding as a percentage of total funding; loan-to-value ratio; loan-to-deposit ratio; solvency ratio) enhance financial stability, as measured by credit growth”. Our empirical results suggest that the degree of maturity mismatch, non-deposit funding as a percentage of total funding, loan-to-value ratio and loan-to-deposit ratio exhibit the predicted impact on the credit growth rate and therefore on financial stability. On the other hand, interbank loans as a percentage of total loans, leverage ratio, and solvency ratio do not exhibit the expected impact on the response variable. Since only four regressors (out of seven) have the signs predicted by our hypothesis, we can only partly confirm it.
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Wachira, Bernard Ndirangu, Humphrey Opiyo Omondi, and Josphat K. Kinyanjui. "Analysis of Third Party Loan Guarantee and Performance of Non-Prime Household Loans in Microfinance Banks in Kenya." Management and Economics Research Journal 03 (2017): 55. http://dx.doi.org/10.18639/merj.2017.03.463579.
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Household loans remain the engine to productivity and economic growth globally. Non-prime household loan is essential, because it enables the borrowers with no collateral to access credit from Microfinance Banks. The survival and sustainability of non-prime household loans globally is therefore significant. Credit risk however remains the main deterrent of the soundness of Microfinance Banks. This leads to the poor performance of microfinance institutions in many economies in the world. Several countries globally are making inroad in reducing the credit risks, which lead to the poor performance of Microfinance Banks. It is still unknown why the credit risk affects the performance of non-prime household loans in the Microfinance Banks domiciled in Kenya. The reason for conducting this study is to determine the level at which the third party loan guarantee and the performance of non-prime household loans relate to the Microfinance Banks in Kenya. Particularly, this study is to determine how the amount secured by guarantee, recoveries from guarantors, percentage of loan secured, and percentage recoveries from guarantors relate to the performance of nonprime household loans in the Microfinance Banks in Kenya. The population was 516 senior management employees of the banks. The researcher conducted a multiple regression analysis for determining the relationship between the amount secured by guarantee—recoveries from guarantors, percentage granted, and percentage recoveries—and the performance of non-prime household loans. The R and R2 were used for determining the strength of the relationship and the coefficient of determination at 0.05 level of significance of variables. The result of this study reveals that there exists a strong relationship between the dependent and independent variables, thereby contradicting the null hypothesis, which states that the relationship does not exist. The percentage of the recoveries from the guarantors over the total recoveries did not have a strong relationship and was not significant. This study recommends the enhancement of the loan guarantee processes to reduce high loan default geared toward good performance of this loan so that it can be accessible to many people.
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Wachira, Bernard Ndirangu, Humphrey Opiyo Omondi, and Josphat K. Kinyanjui. "Analysis of Post Loan Disbursement Allocation and Performance of Non-Prime Household Loan in Microfinance Banks in Kenya." Management and Economics Research Journal 03 (2017): 42. http://dx.doi.org/10.18639/merj.2017.03.456827.
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The part played by non-prime household loans in improving the lives of many people who cannot afford collateral globally cannot be ignored. Many Microfinance Banks in many economies worldwide have tried to maintain the Grameen Bank Model of granting microloans, mainly non-prime household loans. However, the credit risks associated with this initiative hamper the pace at which the granting of this credit facility is expected to grow. This study intends to explore the relationship between the post loan disbursement allocation and the performance of non-prime household loans in the Microfinance Banks in Kenya. The theory associated to this study is the Credit Risk Theory. This theory, which is regarded as credit structural theory, was developed by Merton in 1972. The descriptive survey research design method was applied, and the sample size was 150 respondents. The data-collection tool used was a questionnaire. A logistic regression analysis was conducted for the purpose of predicting non-prime household performance in the Microfinance Banks using training budget, recoveries budget, percentage of training budget, and percentage of recoveries budget as predictors. The Wald test shows that training budget, recoveries budget, and percentage of training budget were good predictors, making a significant contribution to prediction. The percentage of budget on recoveries was not a significant predictor. The Microfinance Banks should enhance the performance of non-prime household loans through capacity building to the borrowers and educate the borrowers on dangers of enforced loan recoveries. The government, through the Central Bank of Kenya, should have a training policy for the Microfinance Banks so that they can enlighten the borrowers on proper financial management to avoid conflicts with borrowers during loan recoveries.
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Petrusevich, D. A., and K. D. Shakhardin. "Analysis of student’s final qualification theses using text loans detection systems." Statistics and Economics 16, no. 2 (May 14, 2019): 57–64. http://dx.doi.org/10.21686/2500-3925-2019-2-57-64.
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In this paper there are results of the bachelor and master theses citing analysis. These students graduated from the Higher mathematics chair of the Russian Technological University in the summer of 2018. In this comparative analysis the dependencies of thesis loan percent on parameters of students, statistical values of their theses are explored. This research is actual because of the progress and development of new informational technologies used in the educational system. Popularity of the text loan detection systems increases. Automatic plagiarism detection systems are intended to make educational process better, the text drawing search easier, to support the copyright laws and academical honesty. The percentage is given by two main Russian plagiarism detection systems: Antiplagiat and Rucontext. Connections between thesis parameters are explored. Advantages of each text loan detection systems are described. In this research there are the results of the pedagogical experiment aimed to analyze statistically the dependencies of the bachelor’s and master’s theses loan percentage which have been got from Antiplagiat and Rucontext systems on the author’s parameters, statistical values describing thesis text. The comparison between statistical results of these systems have been made. The conclusions about their advantages have been presented in the paper. In order to make the comparison methods of the mathematical statistics have been used. Numerical experiment has been provided by means of the packages of the R statistical language. The difference between text loan percentages in the Antiplagiat and Rucontext systems has been analyzed. It has been shown that it grows when length of the text becomes larger. The dependencies of the text loan percentage on the available parameters of the thesis author and text parameters have been presented. The dependencies types are the same for the both systems. Scale of the coefficients in the statistical dependencies is also the same. The difference is in the very set of the parameters: the Rucontext percentage is better described statistically with the sex of the author, the Antiplagiat percentage is described with the type of the higher education (bachelor’s or master’s thesis). Also the dependency of the text loan percentage on the length of the thesis text differs: the Antiplagiat percentage is better described statistically with the number of words but the Rucontext percentage is described with the number of characters. It seems that these differences can be explained with different text search and analyze algorithms. The dependencies between the Rucontext percentage and the Antiplagiat text loan percentage is presented.
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Kuzina, O. E., and N. A. Krupenskiy. "Over-indebtedness of Russians: Myth or reality?" Voprosy Ekonomiki, no. 11 (November 19, 2018): 85–104. http://dx.doi.org/10.32609/0042-8736-2018-11-85-104.
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The main objective of the study is to assess the level of indebtedness and over-indebtedness of Russians. Despite the fact that according to official statistics, the level of household indebtedness in Russia is one of the lowest in the world, the percentage share of non-performing loans is higher than in the countries with a higher level of household indebtedness. During 2015—2017, every fourth of those who had an outstanding loan in Russia spent more than 30% of his or her income on paying back a loan. The reason is that in Russia, within retail lending consumer loans prevail over mortgages. Consumer loans are taken for a short time and at a high interest rate. As a result, debt service of relatively small loans creates a greater burden on the family budget for Russians than in Europe and the United States. In this context, the increase of retail lending can only be sustainable if banks change their business model and transit from short-term consumer credits to long-term loans secured by real estate or other assets.
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Marx, Benjamin M., and Lesley J. Turner. "Student Loan Nudges: Experimental Evidence on Borrowing and Educational Attainment." American Economic Journal: Economic Policy 11, no. 2 (May 1, 2019): 108–41. http://dx.doi.org/10.1257/pol.20180279.
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We provide the first experimental evidence on the effect of student loans on educational attainment. Loan amounts listed in financial aid award letters (“offers”) do not alter students’ choice sets but significantly affect borrowing. Students randomly receiving a nonzero offer were 40 percent more likely to borrow than those who received a $0 offer. Per additional borrower, loans increased by $4,000, GPA and completed credits increased by 30 percent, and transfers to four-year public colleges increased by 11 percentage points. Cost-benefit and theoretical analyses suggest nonzero offers enhance welfare, yet over five million students are not currently offered loans. (JEL D14, D91, I22, I23)
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Svobodová, Libuše, and Martina Hedvičáková. "Mortgage Loans and Impacts of the Global Pandemic COVID-19 in the Globalized Society." SHS Web of Conferences 92 (2021): 01047. http://dx.doi.org/10.1051/shsconf/20219201047.
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Research background: The paper is focused on the financial product, esp. on mortgage loans that are often used products in the field of long-term financing in the Czech Republic. These products provide commercial banks and other financial institutions on the Czech globalized financial market. Purpose of the article: The aim of the paper is to analyze the situation on the globalized financial market focused on the mortgage loans and loans from building societies in view of the global Covid-19 pandemic. Methods: Firstly a theoretical background with a review of the literature is provided, then research methodology is described, the key part brings results of development of mortgage loans, development of interest rates and the analysis of the current situation on the mortgage loan market with estimation of future development. The last part is focused on the comparison of selected mortgage loans provided by five financial institution. The article is based on primary and secondary sources. A detailed research together with the analysis and critical assessment of accessible materials will enable to identify the main objectives in the field of study. Findings & Value added: Interest rates on mortgage loans have on the Czech market downward trend in the last years. The best conditions scored in 2019 loan from building society Modrá pyramida. The overall situation in 2020 cause lower interest rates in the mortgage loans. Lower annual percentage rate of charge and smaller monthly mortgage loan repayment and the total overpayment also correspond.
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Széles, Z., Z. Zéman, and S. J. Zsarnóczai. "The developing trends of Hungarian agricultural loans in the term of 1995 and 2012." Agricultural Economics (Zemědělská ekonomika) 60, No. 7 (July 18, 2014): 323–31. http://dx.doi.org/10.17221/187/2013-agricecon.
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The articleanalyses the agricultural HUF and FX loans and trends between 1995 and 2012. The authors use the linear and exponential analysis in trends of loans for agriculture in Hungary. During the period of 1995–2012, the bank loan for agriculture in percentage of the total bank loan in Hungary was at the highest level, namely 9.76%, when the total loan amount was 192.1 billion HUF in 1998, and this was at the lowest level, namely 3.69%, when the total loan amount was 265.6 billion HUF in 2010. The authors draw a growing linear trend of loans until 2005, namely the loan amount was 358.8 HUF billion, after that little decreasing occurred until 2008, and the loan amount has considerably decreased since 2008, when the economic and financial crisis started; while a decreasing trend of the loan ratio was going on. The average yearly credit increase is 24.486 billion HUF. The Hungarian agricultural sector is in a better position than other sectors of the economy.
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Chaikovskyi, Yaroslav. "The development of bank lending to corporate clients in Ukraine in times of economic cycles." Herald of Ternopil National Economic University, no. 4 (86) (December 12, 2017): 72–87. http://dx.doi.org/10.35774/visnyk2017.04.072.
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The article considers bank lending to corporate clients in Ukraine overcoming the issues related to economic cycles. The dynamics of gross domestic product, total assets, and credit portfolios of Ukraine’s banks over the period between 2012 and 2016 is analyzed. The changes in the composition of bank loans to non-financial corporations are analyzed in terms of scheduled payments, forms of currencies, target allocation and economic activities. Additionally, the dynamics and composition of residents’ deposits mobilized by deposit-taking corporations are considered in terms of scheduled payments over the above period. The major factors that hinder the recovery of bank lending to corporate clients are identified. It is highlighted that the main obstacles to the development of banking lending to corporate clients in Ukraine in times of economic cycles are as follows: high interest rates; a significant percentage of unprofitable enterprises and loan arrears in bank loan portfolios; an increase of non-performing loans (NPL); the fact that banks, having sufficient liquidity for lending to economy-boosting projects, prefer to purchase government securities; corrupt practices of granting loans to affiliated companies (insider loans). The percentage of unprofitable enterprises in Ukraine in 2016 is determined and analyzed by type of economic activity. Based on the analysis performed, some assumptions are made about the trends of the development of bank lending to corporate clients in Ukraine and proposals on further harmonization of bank lending to corporate clients in times of economic cycles are set out.
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Mileris, Ričardas. "MACROECONOMIC FACTORS OF NON-PERFORMING LOANS IN COMMERCIAL BANKS." Ekonomika 93, no. 1 (January 1, 2014): 22–39. http://dx.doi.org/10.15388/ekon.2014.0.3024.
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Abstract. This article presents an analysis of macroeconomic factors and their impact on the percentage of non-performing loans (NPLs) in commercial banks of the EU countries. This problem is relevant because in recent years many EU countries had the economic downturns that can be visible in the main macroeconomic indicators. Also, banks have met the growth of non-performing loans when the debtors were not able to meet their financial obligations. The Basel III Agreement notes the necessity to consider the economic conditions of a country when assessing the credit risk of loan applicants. The results of this research can be useful for banks, because the main relations between macroeconomics and non-performing loans have been revealed. Since 2009, Lithuania has one of the highest NPL percentage in the EU, and the meaningful impact of economic deterioration on the debtors‘ ability to repay debts to banks has been proven. The same situation was ascertained in other EU countries with imperfect economic conditions. Conversely, it has been estimated that banking systems in the EU countries with developed economies are not very sensitive to the business cycle fluctuations. So, in Lithuanian banks, when managing credit risk, the consideration of economic conditions is very important.Key words: banks, credit risk, macroeconomics, non-performing loans
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Papadamou, Stephanos, Dionisis Philippas, Batnini Firas, and Thomas Ntitoras. "Abnormal lending and risk in Swedish financial institutions." Review of Accounting and Finance 17, no. 4 (November 12, 2018): 498–513. http://dx.doi.org/10.1108/raf-02-2017-0028.
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Purpose This paper aims to examine the relationship between abnormal loan growth and risk in Swedish financial institutions by type and borrower using three indicators as proxies for risks related to loan losses, the ratio of interest income to total loans and solvency perspectives. Design/methodology/approach Using a large sample of different types of Swedish financial institutions, this paper uses a panel framework to examine the relationships between abnormal loan growth rates and loan losses, interest income as a percentage of total loans, changes in the equity to assets ratio and changes in z-score. Findings The findings show two important points of evidence. First, abnormal lending to retail customers increases loan losses and interest income in relation to total loans. Second, abnormal lending to other credit institutions decreases loan losses and significantly changes the capital structure by increasing the reliance on debt funding and significantly improves the z-score measure. Research limitations/implications The findings provide useful implications for the management of loan portfolios for a wide range of Swedish financial institutions, identifying two components: abnormal lending to households may increase loan losses and increase interest income in relation to total loans, and excessive lending to other credit institutions may reduce solvency risk and allow more debt financing for the financial institution. Originality/value This is the first study to use a panel framework in analyzing the behavior of different types of Swedish financial institutions in relation to loans granted to retail customers and other credit institutions.
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Anderson, Michael H., and Raymond Jackson. "Evaluating Options For The Regulation Of Payday Loans." Journal of Applied Business Research (JABR) 34, no. 1 (January 17, 2018): 131–42. http://dx.doi.org/10.19030/jabr.v34i1.10100.
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This study discusses regulatory options that federal and state legislatures might consider for the payday loan industry. These options include outright prohibition; restricting the implicit annual percentage interest rate; limiting the amount per loan; limiting the number of concurrent loans; setting lower and upper limits on contract length; and defining the waiting period between loans. While other studies examining the payday loan industry have relied on user survey data or data from a specific lender, this study utilizes data collected by the administrative agent for all payday loan activity in several states, including Florida, Illinois, and Oklahoma. A comparison of key empirical results derived from the differing regulatory environments in these states provides guidance to those who consider imposing further regulation. The current regulatory constraints have resulted in a relatively low default rate, a high rate of loan denial, and a troubling industry reliance on the frequent borrower. An analytical framework is suggested for understanding the motivations of the low and high frequency borrowers.
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Akter, Rozina, and Jewel Kumar Roy. "The Impacts of Non-Performing Loan on Profitability: An Empirical Study on Banking Sector of Dhaka Stock Exchange." International Journal of Economics and Finance 9, no. 3 (February 15, 2017): 126. http://dx.doi.org/10.5539/ijef.v9n3p126.
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The Banking sector of Bangladesh is trapped in a gridlock of non-performing loans (NPLs) so much so that NPL accounts for 11.60 percent of the total volume of classified loans. This problem has started to be widening with an evil trend of loan embezzlement among the industrial borrowers in our country. Frequent scam series in banking industry is surely a red light and unfortunately the commercial banks are highly surrounded by it. The goal of the study is to analyze the impact of non-performing loan (NPL) on profitability where in this study considered net interest margin (NIM). This paper attempts to find out the time series scenario of non-performing loans (NPLs), its growth, provisions and relation with banks profitability by using some ratios and a linear regression model of econometric technique. The empirical results represent that non-performing loan (NPL) as percentage of total loans on listed banks in Dhaka Stock Exchange (DSE) is very high and they holds more than 50 % of total non-performing loans (NPLs) of the listed 30 banks in Dhaka Stock Exchange (DSE) for year 2008 to 2013. Moreover it is one of the major factors of influencing banks profitability and it has statistically significant negative impact on net profit margin (NPM) of listed banks for the study periods.
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Banerjee, Abhijit, Esther Duflo, and Richard Hornbeck. "Bundling Health Insurance and Microfinance in India: There Cannot be Adverse Selection if There Is No Demand." American Economic Review 104, no. 5 (May 1, 2014): 291–97. http://dx.doi.org/10.1257/aer.104.5.291.
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Microfinance institutions have started to bundle their basic loans with other financial services, such as health insurance. Using a randomized control trial in Karnataka, India, we evaluate the impact on loan renewal from mandating the purchase of actuarially-fair health insurance covering hospitalization and maternity expenses. Bundling loans with insurance led to a 16 percentage points (23 percent) increase in drop-out from microfinance, as many clients preferred to give up microfinance than pay higher interest rates and receive insurance. In a Pyrrhic victory, the total absence of demand for health insurance led to there being no adverse selection in insurance enrollment.
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DZHEDZHULA, Olena. "TRENDS OF HIGHER EDUCATION LENDING IN THE USA." "EСONOMY. FINANСES. MANAGEMENT: Topical issues of science and practical activity", no. 4 (44) (April 2019): 100–106. http://dx.doi.org/10.37128/2411-4413-2019-4-12.
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Lending to higher education in the world and in Ukraine is gaining in popularity. According to statistics, almost 60% of Ukrainian students study at a contract basis. The increase in tuition fees, the deterioration of the financial situation of families, and the desire of young people to obtain higher education creates contradictions, one of the ways to overcome credit education. In developed countries, mechanisms of educational lending have been developed that provide young people with the opportunity to acquire education. It should be noted that educational loans are effective in countries with high-quality education systems that guarantee a future graduate with a reliable job security and stable salary. The United States relates to the seven countries with the best educational systems. Therefore, it is relevant to look for lending mechanisms for student youth in Ukraine to study the trends of lending education in the leading countries of the world, and in particular, in the United States. The problem of finding out the mechanisms and causes of instability in the provision of educational loans in the United States has yet to be sufficiently highlighted in research by academics. The purpose of the paper is to study the peculiarities and prospects of educational lending in the United States. The cost of education in any country depends on GDP. The analysis shows a stable GDP growth in the United States. Expenditures on education and higher education have a certain degree of stability as a percentage of GDP. Thus, in comparison with 2016 this indicator in 2017 and 2018 increased by 0,1% and amounted to 5,1%. In 2019, expenditures are expected to increase by 0.1%, and in 2020 - by 0.2%. The indicator of expenditure on higher education in relation to GDP also does not have a sharply pronounced tendency to increase. In 2016, total expenditure on higher education as a percentage of GDP amounted to 1.7%, and in 2017 and 2018, this figure dropped to 1.6%. In 2019 and 2020, higher education expenditure relative to GDP is projected at 2016 (ie 1,7%). Such a state of education financing leads to an increase in tuition fees and updates the issue of education lending. The main reason for the increase in tuition fees economists consider inflation processes, which are an integral part of a market economy. The average tuition fee in 2018 increased by $ 250 (by 2.5%, respectively, the inflation rate is 2.9% in 2017). At the same time, the average federal payments per student were reduced. Consequently, you can confidently predict the increase in fees and in subsequent years. In US education lending programs, you can select 3 types: federal, private, parent. The greatest demand is federal loans. The most popular types of education loans today are Stafford Federal Student Joan and Federal Perkins Loans For College Students. The average loan amount is 21 thousand dollars. The most important advantage of these products is the possibility of repayment after the university graduate begins to work. Compared with loans for education in Ukraine, the lending rate for American students is much lower and ranges from 5-7%, and the maturity of the loan may reach 30 years. The peculiarity of these loans is that they are issued not only to the student's education, but also to his life. Stafford's federal educational loan is more widespread. Its advantages are low interest rate and flexible repayment system. However, the maximum amount of a loan can only be provided if the requirements of this program: success, full-time education, the borrower must be a US citizen. Experts believe that a significant percentage of students do not receive federal loans owing to insufficient information support for federal educational credit programs and formalities for their registration. A simplified procedure for private student loans facilitates their active dissemination. Private lenders work directly with borrowers and are personally interested in distributing this type of banking product. The reasons for reducing educational loans should be considered as problems in debt repayment. As of March 2018, 52% of the outstanding debt on federal education loans amounted to 14% of borrowers worth $ 60,000 or more; 56% of borrowers with outstanding debt owed less than $ 20,000. Student loan arrears rank second in the structure of Americans' loan debts and exceed $ 1.4 trillion, which negatively affects the US economy. Consequently, the United States has the most advanced system of educational lending, which is a powerful incentive for higher education, and ensures its availability to the wages of people with different levels of income. For students, three types of educational loans are offered: federal, private, and parenting. The lowest interest rates may be obtained through a federal educational loan. The last 3 years are characterized by a decrease in educational loans The reasons that led to a decrease in the use of federal loans were the lack of awareness of students about this kind of lending, strengthening control over the implementation of loan agreement conditions. The provision of educational loans in the United States is associated with a sharp increase in their arrears, which may lead to a financial crisis. Therefore, the development of mechanisms for their return becomes an economic problem that requires urgent resolution. We consider the prospects for further research with the study of debt relief programs in the United States.
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Riwukore, Jefirstson Richset. "How Loan Distribution and Credit Troubled in Fostered Partners can be Done? Case Study: CSR Fund from PT. Bukit Asam Tbk. Tanjung Enim, South Sumatra." Li Falah: Jurnal Studi Ekonomi dan Bisnis Islam 6, no. 1 (June 30, 2021): 109. http://dx.doi.org/10.31332/lifalah.v6i1.2638.
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This research aims to determine the Corporate Social Responsibility (CSR) partnership program implemented by State-Owned Enterprises, BUMN, namely PT. Bukit Asam, Tbk, Tanjung Enim, South Sumatra, as a form of concern for the community of small business actors by providing business capital loan assistance. Credit extension services cannot be separated from the risks that occur, such as non-performing loans. Non-performing loans that happened in PT. Bukit Asam Tanjung Enim South Sumatra, namely small business actors as fostered partners experienced a disaster, went bankrupt and fled, or business owners died. This research method uses descriptive qualitative analysis, administrative procedures for granting credit, analysing systems for giving credit assessment, monitoring credit, calculating the level of the collectibility of non-performing loans, and analysing efforts to rescue non-performing loans. The analysis results show that in 2015 to 2017 and 2018, the category of non-performing loans dominates from other categories. In 2015, 2017,2018 and 2019, the collectability in the current category experienced an increase from 1.8%, up 8.6%, up 35.40% and up to 749.87%. The percentage of loan collectibility obtained shows the amount of non-performing loans in 2015 to 2017, 2018 and 2019 has fluctuated and tends to decrease, from 78.11% to 88.74%. Reduced to 60.45% and fell to 27.58%. This finding shows that there are efforts to improve credit performance to have no problem with credit. It is recommended to CSR managers of PT. Bukit Asam, Tbk. Agra must pay attention to the level of business turnover and the provision of collateral in anticipation of bad credit and for existing lousy credit to be rescheduled or reconditioned for loan arrears or can submit evidence of problematic receivables or write-off of accounts receivable if the conditions are not collectable.
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Makri, Vasiliki, Athanasios Tsagkanos, and Athanasios Bellas. "Determinants of non-performing loans: The case of Eurozone." Panoeconomicus 61, no. 2 (2014): 193–206. http://dx.doi.org/10.2298/pan1402193m.
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The purpose of the present study is to identify the factors affecting the non-performing loans rate (NPL) of Eurozone?s banking systems for the period 2000-2008, just before the beginning of the recession. In our days, Eurozone is in the middle of an unprecedented financial crisis, calling into question the soundness of the banking systems of European countries. Looking at both macro-variables (e.g. annual percentage growth rate of gross domestic product, public debt as % of gross domestic product, unemployment) and micro-variables (e.g. loans to deposits ratio, return on assets, return on equity), we investigate which factors determine NPL on aggregate level. Overall, our findings reveal strong correlations between NPL and various macroeconomic (public debt, unemployment, annual percentage growth rate of gross domestic product) and bank-specific (capital adequacy ratio, rate of nonperforming loans of the previous year and return on equity) factors.
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Simatupang, David Oscar. "Pinjaman Modal Usaha Tani Pada Bank Daerah Versus Bank Negara." JURNAL ILMU EKONOMI & SOSIAL 10, no. 2 (November 8, 2019): 119–28. http://dx.doi.org/10.35724/jies.v10i2.2413.
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Rice Commodity is a commodity that has high economic value, so it needs to be developed by increasing loan investment, so that the important role of the Bank for lending is very important for the development of agricultural businesses and farmers' economy. This study aims to see whether there is a difference between the value of the loan, type of loan, income, and the form of loan against the selection of the type of bank. This research was conducted in Merauke Regency, Tanah Miring District, with a sample of 97 respondents from household heads of farm households. Using quantitative descriptive analysis. The results of the analysis show that state-owned banking institutions are chosen 83% higher than regional banks for consumer income, namely <1 Million, 1 Million - 3 Million, and> 3 and at 32.5%, state-owned commercial banks have a higher percentage of loans compared to Regional Owned Commercial Banks which is 83%. For the highest percentage loan scheme owned by the State-Owned Commercial Bank with 83%, namely in the KUR scheme the loan has a significant result or gets the results of a hypothesis that is rejecting Ho or accepting Ha where in taking a loan for the loan scheme has a significant relationship to the type of bank X2 Table 15,507 X2 Calculate = 18,005 with degrees of freedom (db) of 2 and a = 0.05 or 5%, with a P-Value value of 0,000 smaller than 0.05, or it can be said in state and regional public banks, credit schemes very influential in the selection of loans. %) and Agriculture (34.2%), and type Schema variables
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Asiama, Rexford Kweku, and Anthony Amoah. "Non-performing loans and monetary policy dynamics in Ghana." African Journal of Economic and Management Studies 10, no. 2 (June 10, 2019): 169–84. http://dx.doi.org/10.1108/ajems-04-2018-0103.
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Purpose The sharp rise in non-performing loans (NPLs) with its associated effect on financial institutions in Ghana has become very alarming. This has led to the collapse of distressed institutions and associated repercussions such as loss of private savings, investments, businesses and livelihoods. The purpose of this paper is to test the hypothesis that the monetary policy rate can be used to influence NPLs in Ghana. Design/methodology/approach Using quarterly data spanning from 2000 to 2016, the authors used the autoregressive distributed lag econometric approach to estimate the effect of monetary policy on the percentage growth of NPLs in Ghana. The results are presented for both short-run and long-run periods. Findings In the short run, the authors find evidence of no statistically significant effect of monetary policy on the percentage growth of NPLs. However, in the long run, the authors find a statistically significant effect of monetary policy on the percentage growth of NPLs. Practical implications The authors recommend that policymakers should focus on building a strong financial environment, so that monetary policy can be used to influence the commercial bank’s interest rate. In effect, this will help reduce the growth of NPLs, reduce risk and attract competitors into the financial market, increase asset base, increase credit to support viable ventures and subsequently boost economic growth in Ghana. Originality/value The paper shows its value by using quarterly data whereas most literature have considered annual data. Also, the paper includes a policy variable measured by the Monetary Policy Rate (MPR) as the key variable of interest which is normally not the case with most studies.
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Zioło, Monika, and Lidia Luty. "THE ACTIVITY OF MICROCREDIT INSTITUTIONS IN POLAND AGAINST THE BACKDROP OF OTHER EUROPEAN COUNTRIES." Annals of the Polish Association of Agricultural and Agribusiness Economists XXII, no. 4 (November 30, 2020): 206–18. http://dx.doi.org/10.5604/01.3001.0014.5615.
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The aim of this paper is to present the position of Poland against the backdrop of other European countries affiliated with the European Microfinance Network (EMN). In many cases, microenterprises have a problem obtaining external financing for their businesses. Support for small entrepreneurs is provided by microcredit institutions, which in many cases do not require a credit history or collateral from their clients. Microfinance, by limiting the phenomenon of financial exclusion and facilitating access to financial resources for those in need, can become a tool to stimulate entrepreneurship. Most of the institutions providing loans are affiliated with the European Microfinance Network. Analyses were conducted on three levels: activity of microenterprises in obtaining support for starting a business, loan portfolio quality, and the financial efficiency of institutions providing loans. Comparing Polish micro-entrepreneurs with companies from other European countries, it can be observed that Polish entrepreneurs pay their liabilities on time, as evidenced by the low percentage of lost loans, and institutions providing microloans generate small profits, but are able to finance their activities on their own. Poland also has favourable interest rates on microloans compared to other European countries. However, information showing a decrease in the number of borrowers and the value of loans provided in 2017 compared to 2016 can be assessed negatively.
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Kim, Jeong-Bon, and Byron Y. Song. "Auditor Quality and Loan Syndicate Structure." AUDITING: A Journal of Practice & Theory 30, no. 4 (November 1, 2011): 71–99. http://dx.doi.org/10.2308/ajpt-10144.
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SUMMARY This study investigates whether and how the quality of external auditors hired by borrowers has an impact on loan syndicate structure. Our empirical analyses, using a sample of U.S. syndicated loans from 1996 to 2009, show the following findings: First, a larger number of banks participate in syndicated loans to borrowing firms with Big 4 (or previously Big 5 or Big 6) auditors than to those with non-Big 4 auditors. Second, the percentage of a syndicated loan retained by the lead bank(s) is smaller when the borrower is a client of a Big 4 auditor than when the borrower is a client of a non-Big 4 auditor. Third, the effect of auditor quality (Big 4 versus non-Big 4) on loan ownership structure is less pronounced when lenders are able to gather more information about the borrower prior to the loan deal. Overall, our results suggest that auditor quality plays an important role in loan syndication by alleviating information asymmetries between lead banks and non-lead participant banks. JEL Classifications: G21; G32; M42. Data Availability: Data are publicly available from sources identified in the paper.
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Kelchen, Robert, and Amy Y. Li. "Institutional Accountability: A Comparison of the Predictors of Student Loan Repayment and Default Rates." ANNALS of the American Academy of Political and Social Science 671, no. 1 (April 27, 2017): 202–23. http://dx.doi.org/10.1177/0002716217701681.
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The federal government holds colleges accountable if too many of their students default on loan repayment, but the default measure traditionally used captures only a fraction of students who are struggling to repay their loans. The 2015 College Scorecard dataset introduced a new loan repayment metric, showing that the percentage of students who have not reduced the principal balance of their loans by at least $1 over a given period of time far outstrips the traditional loan default measure. Using a sample of 3,595 colleges, we test the extent to which student demographics, institutional characteristics, and state-level economic factors are associated with repayment rates and default rates. We also examine whether factors associated with loan repayment rates change between one and seven years after students begin repayment. We find that characteristics traditionally associated with economic disadvantage, including being a first-generation college student or a member of an underrepresented minority group, tend to be associated with lower loan repayment rates, as does attendance at for-profit colleges. These factors are just as or more strongly associated with longer-term repayment rates compared to shorter-term repayment rates.
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The Dong, Phung, and Nguyen Thi Hong Nham. "The factors affecting accessibility to credit capital of small and medium enterprises in Vietnam." Statistics and Economics 15, no. 6 (January 16, 2019): 15–25. http://dx.doi.org/10.21686/2500-3925-2018-6-15-25.
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The difficulty in accessing loans is one of the major barriers to the development of small and medium enterprises (SMEs) in Vietnam. Low accessibility to capital forces SMEs to spend both official and unofficial costs in order to obtain loans, and/or to access the unofficial market at higher interest rates, thereby increasing cost of production of enterprises. Studies suggest that the determinants of bank loan processing through which small and medium enterprises can access official loans include: characteristics of enterprises; indicators, reflecting the performance of enterprises; characteristics of loans; characteristics of enterprises, enterprise owners; geographical position of enterprises; the creditworthiness of enterprises and the role of the network.Purpose of the study.The aim of this paper is the quantitative analysis of the factors, affecting accessibility to credit capital of small and medium enterprises in Vietnam.Materials and methods.This study was conducted on the basis of a survey in December 2017. The survey includes 301 enterprises in Hanoi city. Selected enterprises are also enterprises, surveyed in the annual enterprise survey by the General Statistics Office of Vietnam. This paper uses the Probit and Logit regression approach to estimate the impact of factors, affecting the disbursement probability of a loan of an enterprise. The number of SMEs accounts for 56.69% of the samples. The number of enterprises, applying for a bank loan accounts for 58.4% of the total samples, of which the percentage of disbursed loans for SMEs accounts for only 47.3%. For enterprises without a bank loan, eliminating the reasons for the lack of demand and unwish to be in debt, the main reasons not to access bank loans are high interest rates, complicated loan procedures and insufficient collateral.Results.The results obtained from the Logistic and Probit models show that the estimated coefficients are statistically significant, affecting the probability of taking a business loan, accepted by financial institutions. Although the coefficients, estimated from Logistics model are larger than those estimated from the Probit model, the estimated results show that the direction of impact of the variables in two estimation techniques gives quite similar results.Conclusion.Based on the results of this study, the Government of Vietnam should implement policies to support SMEs in the direction of improving their access to capital. The credit institutions should design products and services suitable to the characteristics of SMEs in Vietnam.
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Nadolnyak, Denis, Valentina Hartarska, and Xuan Shen. "Climate Variability and Agricultural Loan Delinquency in the US." International Journal of Economics and Finance 8, no. 12 (December 4, 2016): 238. http://dx.doi.org/10.5539/ijef.v8n12p238.
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<p>Inter-annual climate variability in the Southeastern US that affects farm productivity and cash flows is largely dependent on the predictable El Nino Southern Oscillation (ENSO) phenomenon. In this paper, we estimate the association between the ENSO anomalies and the performance of agricultural loan portfolios of the Farm Credit System (FCS) institutions - the largest agricultural lender in this region. We find that, compared to neutral years, the share of delinquent loans in the FCS portfolio decreases by 1.5 to 2 percentage points following La Nina years and increases by 1.5 to 2 percentage points following El Nino years. These delinquencies are generally resolved because the impact on loan write-offs is much smaller, although statistically significant which suggests that the FCS institutions have well-diversified portfolios. The results also suggest that agricultural insurance markets are complementary to credit markets, that land values at loan origination have a positive impact on delinquencies, and that loan write-offs decrease with the lender’s size.</p>
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Pachlevi, Fachmi, and Sopacua, Ivana Oktarina. "The Effect of Digital Unsecured Loans and DTI Ratio on Risk-Taking Behavior." Asia Proceedings of Social Sciences 5, no. 2 (December 30, 2019): 133–36. http://dx.doi.org/10.31580/apss.v5i2.1108.
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The objective of this study was to examined the effect of digital unsecured loans and DTI ratio on changes in risk-taking behavior of the household sectros. Increasing of P2P lending is clearly unstoppable in Indonesia. Digital unsecured loans success to simplify credit process, because online-based credit aplication. However, these simply process are followed by high-interest rate. Many people apply for credit without considering risk. The convenience of digital unsecured loans making people forget about high annual percentage rate. Finally, occur increase potential bad loans in the household sectros. Collection of data was carried out through experiments 2 x 2 factorial design. The results shows that digital unsecured loans increases risk-taking behavior of household sectors. DTI ratio also can be used as an internal control of household sectors to prevent increased risk-taking behavior
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Jacildo, Ryan, Niny Khor, and Ruth Tacneng. "Assessing mandated credit programs: Case study of the Magna Carta in the Philippines." Journal of Governance and Regulation 5, no. 3 (2016): 34–49. http://dx.doi.org/10.22495/jgr_v5_i3_p5.
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We examine the effects of a mandated credit program to small and medium enterprises in the Philippines (Magna Carta Law) using a panel dataset compiled from official data published by the Bangko Sentral ng Pilipinas. The final sample of 109 financial institutions represented over 90% of total finance sector assets in the Philippines. We highlight three important findings. First, although the total lending levels to micro, small, and medium enterprises (MSMEs) grew slightly, the percentage shares of loans allocated to MSMEs declined drastically from a peak of 30% of total loans in 2002 to 16.4% in 2010. Second, following the upwards revision of the loan target (from 6% to 8%) for smaller firms in 2008, there was a sharp increase in noncompliance especially amongst universal and commercial banks. On the other hand, total loans to medium enterprises were still more than threefold larger than the targeted 2%. Third, there is an increased heterogeneity in optimal loan portfolio across banks. Most surprisingly, the absolute level of MSME lending by rural and cooperative banks declined since 2008. Direct compliance amongst universal and commercial banks decreased beginning in the late 2007, while that of thrift banks increased to almost 100%. Abolishing the Magna Carta targets for medium-sized enterprise loans would most likely yield little adverse effects. Meanwhile, efforts to improve financial access to MSMEs should focus on alternative nondistortionary ways to increase financing supply, such as improving institutional framework for informational availability and development of equity and bond markets for MSMEs
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Norgaard, Julia R. "Modeling the Propensity to Default on Microloans in Mali, Africa." Journal of Mason Graduate Research 3, no. 2 (May 5, 2016): 97. http://dx.doi.org/10.13021/g8ws3r.
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Microfinance is a global phenomenon that is focused on sustainable poverty alleviation. By providing people in developing countries with the capital to sustain themselves and an educational background on which to build their futures, microfinance institutions (MFIs) have given the poor an opportunity to get out of poverty. For the purposes of this study, a specific MFI in Mali Africa was utilized to model the propensity for micro-borrowers to default on their loans. Using the MFI’s historical data on each of their loans, this study models the repayment percentage of individual loans, contingent upon qualitative and quantitative factors. Employing an Ordinary Least Squares Model I am able to analyze how each independent factor influences default rates. I also harness fuzzy analysis to group together factors that contribute to high default rates. I hypothesize that high default rates were encouraged by a longer time between payments, a large initial loan size, business development in investment heavy industries, and starting a business in a hostile market environment. By utilizing these results, the MFI can optimize its loan repayment success by targeting specific borrowers and modifying their loan structure. The purpose of this study is to provide the Mali MFI with tangible results that they can utilize to increase their loaning effectiveness. This model is important because microfinance is a relatively new field and 3it seeks to improve the Mali MFI’s poverty alleviating capacity.
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Squires, Gregory D., and Sally O'Connor. "Do Lenders who Redline Make More Money than Lenders who Don't?" Review of Black Political Economy 21, no. 4 (March 1993): 83–107. http://dx.doi.org/10.1007/bf02689964.
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While it is widely recognized that racial minorities and residents of distressed urban communities experience relatively greater difficulty in obtaining mortgage loans, there is little consensus on the causes of such lending patterns. This study examines the relationship between lender profitability and the percentage of their loans and loan dollars that are invested in Milwaukee's central city and to racial minorities throughout the metropolitan area. Findings suggest that to understand broader industry-wide patterns, it is important to focus on the characteristics of lending institutions themselves, particularly those that yield discriminatory lending patterns, and not solely on the income, credit rating, and other socioeconomic characteristics pertaining to the risk and profitability associated with various population groups and community areas. Policy and research implications that will lead to a more comprehensive understanding of, and more effective solutions for, urban credit availability or redlining problems are discussed.
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Adams, Robert M., Kenneth P. Brevoort, and John C. Driscoll. "Is Lending Distance Really Changing? Distance Dynamics and Loan Composition in Small Business Lending." Finance and Economics Discussion Series 2021, no. 009 (February 16, 2021): 1–43. http://dx.doi.org/10.17016/feds.2021.011.
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Has information technology improved small businesses' access to credit by hardening the information used in loan underwriting and reducing the importance of proximity to lenders? Previous research, pointing to increasing average lending distances, suggests that it has. But this conclusion can obscure differences across loans and lenders. Using over 20 years of Community Reinvestment Act data on small business lending, we find that while average distances have increased substantially, distances at individual banks remain unchanged. Instead, average distance has increased because a small group of lenders specializing in high-volume, small-loan lending nationwide have increased their share of small business lending by 10 percentage points. Our findings imply that small businesses continue to depend on local banks.
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Gololo, Ibrahim Aliyu. "An Evaluation of the Role of Commercial Banks in Financing Small and Medium Scale Enterprises (SMEs): Evidence from Nigeria." Indian Journal of Finance and Banking 1, no. 1 (July 20, 2017): 16–32. http://dx.doi.org/10.46281/ijfb.v1i1.82.
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In this study an attempt was made to evaluate the role of commercial banks in financing small and medium scale enterprises in Nigeria. There is absolutely no doubt that small and medium scale enterprises play a pivotal role and contributes tremendously to the economic growth and development of many developing economy including Nigeria, but survival of Small and medium scale enterprises is often hampered by access to finance which key players were making attempt to solve. The objective of this study is to evaluate the extent to which commercial banks in Nigeria play their role in solving financing needs of small and medium scale enterprises. The study employed secondary data which use the ratio of loans to Small and Medium Scale Enterprises by commercial banks as a percentage of their total credit for the period between 1991-2012.The study utilize paired sample t-test and significance of ratio of loans to Small and Medium Scale Enterprises was tested to access the performance of Small and Medium Scale Enterprises Equity Investment Scheme by banks to provide finance to Small and Medium Scale Enterprises. The result shows that commercial banks loans even with the equity scheme introduction do not make significance positive impact on loan disbursement to finance SMEs. It is recommended that Nigerian commercial banks should embrace risk-averse behavior in respect of loans to SMEs, interest rate should be review for SMEs loans by Central bank of Nigeria and increase SMEEIS contribution by commercial banks. Specialized bank should be established by government to finance SMEs; it should also provide adequate infrastructural facilities in the country and address present security challenges so as to make Nigeria conducive for SMEs to operate.
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Akram, Vaseem, and Badri Narayan Rath. "Does debt convergence hold in case of India?" Journal of Economic Studies 46, no. 4 (August 5, 2019): 858–71. http://dx.doi.org/10.1108/jes-02-2018-0064.
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Purpose The purpose of this paper is to examine the convergence analysis of public debt among Indian states using annual data from 1990‒1991 to 2014‒2015. Design/methodology/approach The paper tests this hypothesis using club convergence technique propounded by Phillips and Sul (2007). Findings The results reveal the existence of debt divergence for overall Indian states. States are formed into four clubs on the basis of their level of debt, and three clubs support the hypothesis of club convergence. Further, the total public debt decomposes into three compositions such as market loans, bank loans and loans and advances from the central government. The existence of convergence is found for market loans and bank loans; however, the presence of divergence is found in case of loans and advances for overall states. Practical implications Since public debt plays an important role for fiscal health of the Indian states, findings of this study suggest to squeeze the fiscal consolidation further for Indian states whose debts as a percentage to gross state domestic product are on the higher side. Further, the examination of debt convergence helps to manage debt level among the states because heavy dependence on public debt could retard investment and economic growth. Originality/value Whereas bulk of empirical studies emphasize on examining the linkage between public debt and economic growth, and issue on debt sustainability across Indian states, examination of convergence of debt and its compositions (markets borrowings, bank loans and loans and advances from the central government) among the Indian states is scanty.
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Azar, Samih Antoine, and Marybel Nasr. "Predicting Non-performing Loans by Financial Ratios for Small and Medium Entities in Lebanon." Business and Management Studies 1, no. 2 (July 1, 2015): 115. http://dx.doi.org/10.11114/bms.v1i2.844.
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This study examines the ability of financial ratios in predicting the financial state of small and medium entities (SME) in Lebanon. This financial state can be either one of well-performing loans or one of non-performing loans. An empirical study is conducted using a data analysis of the financial statements of 222 SMEs in Lebanon for the years 2011 and 2012, of which 187 have currently well-performing loans and 35 have currently non-performing loans. Altman Z-scores are calculated, independent samples t-tests are performed, and models are developed using the binary logistic regression. Empirical evidence shows that the Altman Z-scores are able to predict well the solvent state of SMEs having well-performing loans, but are unable to predict accurately the bankruptcy state of the SMEs having non-performing loans. The independent samples t-tests revealed that five financial ratios are statistically significantly different between SMEs having well-performing loans and those having non-performing loans. Finally, a logistic regression model is developed for each year under study with limited success. In all cases accuracy results are inferred showing the percentage of companies that are accurately classified for being solvent and bankrupt, in addition to the two standard measures of error: the Type I errors and the Type II errors. Although a high accuracy is achieved in correctly classifying non-distressed and distressed firms, the Type I errors are in general relatively large. By contrast the Type II errors are in general relatively low.
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Coffman, Lucas C., John J. Conlon, Clayton R. Featherstone, and Judd B. Kessler. "Liquidity Affects Job Choice: Evidence from Teach for America*." Quarterly Journal of Economics 134, no. 4 (June 24, 2019): 2203–36. http://dx.doi.org/10.1093/qje/qjz018.
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Abstract Can access to a few hundred dollars of liquidity affect the career choice of a recent college graduate? In a three-year field experiment with Teach For America (TFA), a prestigious teacher placement program, we randomly increase the financial packages offered to nearly 7,300 potential teachers who requested support for the transition into teaching. The first two years of the experiment reveal that although most applicants do not respond to a marginal $600 of grants or loans, those in the worst financial position respond by joining TFA at higher rates. We continue the experiment into the third year and self-replicate our results. For the highest-need applicants, an extra $600 in loans, $600 in grants, and $1,200 in grants increase the likelihood of joining TFA by 12.2, 11.4, and 17.1 percentage points (or 20.0%, 18.7%, and 28.1%), respectively. Additional grant and loan dollars are equally effective, suggesting a liquidity mechanism. A follow-up survey bolsters the liquidity story and also shows that those drawn into teaching would have otherwise worked in private-sector firms.
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M. Obiageri, Ugwu-Oju, Vincent A. Onodugo, and Mbah, Paulinus Chigozie. "Assessing the Effectiveness of Commercial Bank Loans as Sources of Funding/ Capital Formation for Small and Medium Enterprises (SMEs) in Southeast, Nigeria." Business, Management and Economics Research, no. 54 (April 24, 2019): 62–70. http://dx.doi.org/10.32861/bmer.54.62.70.
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The paper assesses the effectiveness of commercial bank loans as sources of funding Small and Medium Enterprises (SMEs) in Southeast, Nigeria. A cross-sectional survey method wherein structured questionnaire was used to collect data was adopted. A sample of 500 respondents was randomly selected from the five industrial hubs in the five states of Southeast, namely Nnewi, Aba, Enugu, Abakiliki, and Owerri. With the aid of pecking order theory (POT)/hypothesis of Lending, percentage formula, and SPSS version 20.0 tools, the data generated from the respondents were analysed. Among others, the results of the analysis reveal that SMEs and commercial banks are highly indifferent to the loans facilities; strict collateral requirements, high interest rates, and the nature of requirements for guarantors dissuade SMEs from accessing loans; and government interventions provided palliative measures but failed to address the problems associated with the loans. Therefore, this paper recommends policy reforms to reduce interest rate, collateral and guarantor requirements. Further research on how to modernise and harmonise other external sources of SME funding such as ‘daily contribution’ and ‘Isusu’ systems is required.
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Suwansin, Ravivan, John K. M. Kuwornu, Avishek Datta, Damien Jourdain, and Ganesh P. Shivakoti. "Salvaging mortgage loans and land title redemption with revolving funds in Thailand." Agricultural Finance Review 78, no. 1 (February 5, 2018): 2–24. http://dx.doi.org/10.1108/afr-12-2016-0090.
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Purpose The purpose of this paper is to investigate the performance of the revolving fund (RF) regarding the ability of smallholder debtors to retrieve land title deeds, and also to examine the factors influencing the outstanding debts and percentage of outstanding interest of the smallholders in the Central and Northeastern regions of Thailand. Design/methodology/approach Primary data were collected from 430 debtors in the Central and Northeastern regions of Thailand in order to compare the differences in livelihood assets as well as their opinions on benefits derived from the operation of the RF. Secondary data were also collected from the RF administration, in order to evaluate the effectiveness and efficiency of the fund. Heteroskedasticity-corrected ordinary least squares and Tobit regression models were employed to examine the factors influencing the outstanding debts and percentage of outstanding interest of the smallholders, respectively. Furthermore, the student’s t-test was used to examine the differences in the livelihood assets among debtors in the two regions; and one-way analysis of variance (ANOVA) was used to examine differences in livelihood indicator scores among the three types of debtors. Findings The empirical results revealed that the RF is effective as the fund could provide loan to smallholders to enable them redeem their land title deeds from their previous creditors. The t-test results reveal significant differences in the livelihood assets among debtors in the two regions. One-way ANOVA indicates differences in livelihood indicator scores among the three types of debtors. The results of the heteroskedasticity-corrected ordinary least squares regression revealed that being married, low frequency of floods and less influence of third parties significantly reduced the outstanding debts. The results of the censored Tobit regression revealed that increased frequency of meeting with the RF administration, less influence of third parties, high land potential and interaction of age and experience significantly decreased the percentage of outstanding interest. Practical implications It is imperative to intensify information and education regarding the regulations, payment terms and modalities to clients in order to facilitate repayments of the loans disbursed. The organization of the RF should pay particular attention to the role of the committees involved, information administration and loan repayment monitoring. The RF should increase the frequency of meetings with smallholders, minimize the influence of third parties and give priority to old and experienced smallholders who possess land with high potential for earning incomes to enable them repay the loans. Originality/value To the best of the authors’ knowledge, this is the first study that examined the effectiveness of the RF to enable smallholders retrieve their land title deeds.
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Kharisna, Kharisna, Monalisa Ibrahim, and Kamaruddin Sellang. "EFEKTIVITAS KINERJA KARYAWAN DALAM PELAYANAN JASA PEMBERIAN KREDIT GADAI PADA KANTOR PEGADAIAN UNIT PELAYANANAN CABANG PANGKAJENE KABUPATEN SIDENRENG RAPPANG." PRAJA: Jurnal Ilmiah Pemerintahan 7, no. 3 (October 25, 2019): 71–75. http://dx.doi.org/10.51817/prj.v7i3.371.
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This This study aims to determine the effectiveness of employee performance in the service of providing pawn loans at the Pangkajene Branch Service Unit Pangkajene Branch, Sidenreng Rappang Regency. The population and sample in this study were customers who used pawn credit services as many as 97 people and used saturated sampling. This study uses a quantitative approach. Data collection techniques by observation, interviews, questionnaires and documentation. The collected data were then analyzed using frequencyandpercentagetables. The results showed that the effectiveness of employee performance in the service of providing pawn loans at the Pangkajene Branch Service Unit of the Pangkajene Branch Office of Sidenreng Rappang Regency was good with an average percentage of 85.25%. While the factors that affect the effectiveness of services providing pawn credit services at the Pangkajene Branch Service Unit of Sidenreng Rappang are good with an average percentage of 80.08% seen from service procedures, settlement time, service fees, service products, facilities and infrastructure and officer competence.
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Stegman, Michael A. "Payday Lending." Journal of Economic Perspectives 21, no. 1 (January 1, 2007): 169–90. http://dx.doi.org/10.1257/jep.21.1.169.
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A “payday loan” is a short-term loan made for seven to 30 days for a small amount. Fees charged on payday loans generally range from $15 to $30 on each $100 advanced. A typical example would be that in exchange for a $300 advance until the next payday, the borrower writes a post-dated check for $300 and receives $255 in cash—the lender taking a $45 fee off the top. The lender then holds on to the check until the following payday, before depositing it in its own account. When the fee for a short-term payday loan is translated into an annual percentage rate, the implied annual interest rate ranges between 400 and 1000 percent. Virtually no payday loan outlets existed 15 years ago; today, there are more payday loan and check cashing stores nationwide than there are McDonald's, Burger King, Sears, J.C. Penney, and Target stores combined. For economists, several interesting issues arise in the study of payday loans: Is this just a situation in which willing customers and firms interact in the market for ready access to high-cost, short-term credit? Or does the payday loan industry encourage habitual borrowing and the snowballing of unaffordable debt in such a way that the state has a role to play in limiting consumers from their own excesses? Would a ban or overly restrictive regulations on payday lending just revive the market for loan-sharking? And what of a similar practice by mainstream banks, who regularly allow their customers to overdraw their checking accounts if they pay a fee comparable in size to a payday loan charge?
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Manoj, P. K. "Learning From Cross Country Experiences In Housing: A Micro Finance Approach For Inclusive Housing In India." Journal of Global Economy 4, no. 3 (September 30, 2008): 208–24. http://dx.doi.org/10.1956/jge.v4i3.117.
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Housing has been one of the top priorities for the various governments in India since the seventies. The need for housing has been increasing at a phenomenal pace in India and so also the need for housing finance. Since the growth in supply of housing could not keep pace with the growth in its demand, housing shortage has been on the rise over the years. Housing finance industry which was relatively dormant till the early nineties underwent sweeping changes ever since the initiation of financial sector deregulation measures. Financial deregulation measures brought about several changes in this industry, the first and foremost being the fast growth rate in the industry coupled with cutthroat competition among the industry players. This trend has been quite prominent since the entry of commercial banks into this arena. Accordingly, there has been a surge in the growth of retail (personal) loans segment, particularly in respect of housing loans. This is evident from the fact that housing loans disbursed by banks as a percentage of their total loans has increased from just 2.79% as of end-March 1997 to as high as 12.52% as of end-March 2007
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Khan, Rao Abdul Rauf. "Farm Loans Recovery Problem in Pakistan: Its Possible Solution." Pakistan Development Review 33, no. 4II (December 1, 1994): 837–43. http://dx.doi.org/10.30541/v33i4iipp.837-843.
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The emerging trend of focussing more and more attention on improving the production and productivity of farming in Pakistan has prompted bankers to evolve better schemes to improve the income generation capacity of the farming community and help them repay the borrowed funds in time. This can be called a step in the right direction. The Agriculture Development Bank of Pakistan (ADBP) the Federal Bank for Cooperatives (FBC) and the Commercial Banks are the major formal institutions, which because being Government owned have in fact become the agents for rural development purveying the most important input i.e. credit. Hence, the expansion and growth of the banking sector have become synonymous with national welfare. The main objective of banks in lending is to improve the recycling of funds capability borrowed from the public or raised from internal or external sources for the benefit of society. The recovery of loans portrays a dismal picture. Since agricultural lending expanded extensively, the recovery percentage has received a great setback due to which as per estimate more than half of the funds are not funnelled back. In fact, financial distress has always been a feature of the financial scene but most of the time it has been associated with being a sectoral problem such as those affecting agriculture and industries.
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Daniłowska, Alina. "Pożyczki od osób fizycznych jako źródło finansowania działalności w gospodarstwach indywidualnych w Polsce." Zeszyty Naukowe SGGW - Ekonomika i Organizacja Gospodarki Żywnościowej, no. 55 (March 26, 2005): 105–13. http://dx.doi.org/10.22630/eiogz.2005.55.9.
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The aim of the analysis was to evaluate the role of loans granting by individuals in the financing of the agricultural activity of private farms in Poland. The investigation showed that quite large percentage of farms used this kind of credit. The share of private credits in financing of agricultural investments was about 20%, in financing of working capital about 8%.
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Sokolovska, Alla, Larysa Rainova, and Tetiana Zatonatska. "Loan and Grant Support for Students in the Context of the Diversification of Funding Sources for Higher Education." Ekonomika 98, no. 1 (April 17, 2019): 111–23. http://dx.doi.org/10.15388/ekon.2019.1.7.
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[full article and abstract in English] This paper considers the mechanism of direct state support for students in European countries using loans and grants: their functions, forms, schemes, and conditions for provision. The peculiarities of the state preferential educational loan in Ukraine and the reasons for its curtailment since 2011 are determined. Nowadays, it is established that the main form of state support for Ukrainian students who receive higher education in public procurement comes with academic and social scholarships, whereas students who receive higher education under a contract of preferential state lending yet after the curtailment of the program are deprived of any state support. The necessity of restoring the program of preferential state lending for students and the directions of its improvement, such as the establishment of an interest rate on a loan based on the level of inflation, the establishment of a minimum amount of annual payments on a loan as a percentage of the minimum salary, the distribution of the risk of non-repayment of a loan between the state, the borrower and his parent, are all substantiated. This is done taking into account the financial capabilities of the Ukrainian state and the high levels of hidden income. We consider the establishment of conditions needed for the development of a system of commercial educational loans, by providing for the provision of a state guarantee on it and partial state subsidy of interest rates. We consider the areas of improvement of scholarship support of students and substantiate the necessity of introducing education at least for orphans, children deprived of parental care, and disabled children.
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Mishura, A. V. "Demand for housing loans and interest rates in Russian regions." Voprosy Ekonomiki, no. 4 (April 8, 2021): 135–56. http://dx.doi.org/10.32609/0042-8736-2021-4-135-156.
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This work examines the current world experience in assessing the sensitivity of household mortgage borrowing to interest rates. The data of the “bank— region—year” format are used to estimate supply and demand equations for housing loans issued by banks in the regions of the country in 2015—2018. Our estimations have revealed that the demand on the mortgage market in the regions is sensitive to the price of loans: when weighted average rate at which a bank issues mortgages in a region is lower by 1 percentage point it is associated with an increase in demand up to 20—25%, all other things being equal, that is, when taking into account the number of offices of a bank in that region, the economic situation and region’s characteristics in that year. Demand for mortgages is elastic at interest rates, which means that by lowering rates on mortgage programs, banks can expect an increase in demand, due both to an increase in overall demand for loans and to an overflow of borrowers from other banks. Consequently, it was confirmed that high interest rates on mortgages hinder the development of housing lending.
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Munawar, Munawar, Mira Maisura, and Chairan M. Nur. "PERANCANGAN APLIKASI PENGOLAHAN DATA BUKU DAN PENGUNJUNG PERPUSTAKAAN PADA TAMAN BACAAN MASYARAKAT AR-RASYID ACEH BESAR." Cyberspace: Jurnal Pendidikan Teknologi Informasi 3, no. 2 (February 13, 2019): 122. http://dx.doi.org/10.22373/cj.v3i2.6340.
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This research is motivated by several places or educational institutions that still use manual methods in processing books, members' data, visits and loans that are less effective and time consuming. TBM Ar-Rasyid in the process of filling in the guest book, and data collection on books, loans, members are still done manually. So that a lot of energy and resources will be wasted, both in terms of material and in terms of time, this research is conducted to build a data processing system that can be used by library staff in data collection of books, members, visits and loans to be easier and more effective. The research method used is R & D and for system development using the waterfall method. Then after testing the system, namely in the form of black box testing and continued with the user acceptance test (User Acceptend Test) to users, namely members, library officers, the test results obtained with an average value of 4.31 with a percentage of 86% which means it is very suitable or very easy. Users feel satisfied with the system built.
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Muhammad, Najihah, Sharifah Faigah Syed Alwi, and Nabihah Muhammad. "Credit Management in Full-Fledged Islamic Bank and Islamic Banking Window: Towards Achieving Maqasid Al-Shariah." International Journal of Financial Research 11, no. 3 (June 30, 2020): 92. http://dx.doi.org/10.5430/ijfr.v11n3p92.
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The percentage of non-performing loans (NPL) and non-performance financing (NPF) in Malaysia commercial banks is under control and does not increase in its percentage since the year 2014 to 2016. These scenarios are the result of the stringent credit management procedures in the commercial banks which if not properly followed could affect banks’ profitability and liquidity. However, there are critics by the public on how Islamic banks normally tend to punish their customers who are the real traders or businessman without fixed monthly income when they slightly late in paying their periodical payment for the bank’s facility or financing. Islamic bank is supposed to help the customer in order for it to achieve maqasid al-Shariah (objectives of Shariah). Thus, this study intends to compare the credit management’s procedure in one of the full-fledged Islamic banks and one of the conventional banks which also offer Islamic banking window. This study also aims to identify the achievement of maqasid al-Shariah through the procedures of credit management in the two banks. This study adopted the qualitative methodology where semi-structured interviews are conducted with 2 bankers from one of the full-fledged Islamic banks and one of the conventional banks which also offer Islamic banking window. Results from this study indicated that each banks has their own strategies and procedures with regard to credit management. Their credit management plans were structured to help customers to secure their loans, financing and assets as well as protecting them from bankruptcy and insolvency which basically comply with maqasid al-Shariah. From this study, it is recommended for commercial banks to apply a strict approval process for loan and financing as well as a strict credit monitoring system to avoid NPL and NPF.
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Cabrales, Antonio, Maia Güell, Rocio Madera, and Analía Viola. "Income contingent university loans: Policy design and an application to Spain." Economic Policy 34, no. 99 (July 1, 2019): 479–521. http://dx.doi.org/10.1093/epolic/eiz010.
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SUMMARY In Europe, the need for additional funding coming from either budget cuts and/or increased costs due to increased competition in university quality has reopened the debate on the financing of university systems. An attractive alternative to the current general-tax-financed subsidies is Income Contingent Loans (ICL), a flexible scheme that puts more weight on private resources while enhancing progressivity. One challenge of the viability of ICL systems is the functioning of the labor market for university graduates. This paper offers a general analysis of the economics of ICL, followed by an application to Spain. We set up a loan laboratory in which we can explore the distributional effects of different loan systems to finance tertiary education at current costs as well as to increase university funding to improve its quality. We use simulated lifetime earnings of graduates matching the dynamics of employment and earnings in the Spanish administrative social security data to calculate the burden of introducing ICL for individuals at different points of the earnings distribution and for the government. We find that (1) our proposed structure is highly progressive under all specifications, with the top quarter of the distribution paying close to the full amount of the tuition and the bottom 10% paying almost no tuition and (2) the share of total university education subsidized by the government is between 16 and 56 percentage points less than under the current system.
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Muthu, N. "Progress of Self Help Group-Bank Linkage Programme in India." Shanlax International Journal of Economics 9, no. 2 (March 1, 2021): 41–51. http://dx.doi.org/10.34293/economics.v9i2.3735.
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In this paper an attempt has been made to analyse the progress of SHG-Bank linkage programme in India during the period between 2007-2008 and 2019-2020. The progress of SHG-Bank linkage programme has been analyzed in terms growth of savings of SHGs with banks and growth of bank loans disbursed to SHGs. For this purpose the data required for the study were collected from the official publication of National Bank for Agricultural and Rural Development (NABARD), different published reports, journals and existing available literature. This study employed simple statistical tools such as percentage analysis and averages to analyze the data. The result of the study shows that there is significant raise in the amount of savings of SHGs with banking sector and amount of loans disbursed to SHGs, During this study period. However the agency-wise analyses of savings of SHGs and loans disbursed to SHGs show that the Commercial banks lead in getting savings of SHGs and loans disbursed to them followed by Regional Rural Banks and Co-operative banks. Not with standing the remarkable progress, geographically there has been skewed development of SHG-Bank linkage programme in India. There is wide regional disparity in the spread of SHGs, savings of SHGs with banks and loans disbursed to SHGs under this programme. The outreach of this programme is spectacular in Southern region while North, West and Eastern regions are lagging behind. In view of the large outreach, predominant position and the possible benefits to the poor, it is very important to see the benefits of this programme to reach across all sections of the society and regions. So far the SHG movement is India is mostly South-Centric and it is yet to take off the real sense in other regions of India.
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Thrikawala, Sujani, Stuart Locke, and Krishna Reddy. "An empirical analysis of corporate governance impact on outreach of microfinance institutions (MFIs)." Corporate Ownership and Control 13, no. 1 (2015): 8–14. http://dx.doi.org/10.22495/cocv13i1p1.
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This study examines the impact of corporate governance practices of microfinance institutions (MFIs) on outreach to the poor people in Sri Lanka by using three outreach variables: Breadth of outreach, percentage of women borrowers and depth of outreach. Data for 54 MFIs are analysed using regression analysis of unbalanced panel data from 2007 to 2012. The findings of this study revealed several significant relationships: Breadth of outreach in Sri Lankan MFIs improve when they have a female chair on the board but decreases when they have more female directors and client representation on the board, and female borrowers get more loans when the firm has women representation and international/donor directors on the board, but less loans if they have a female chair. This study provides a direction for future researchers to explore more, and recommend good corporate governance practices for MFIs to reach more poor clients.
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Tkachenko, Nataliia, and Oleksandr Momot. "Research and methodological approach to scoring the impact of banks performing operations involving transnational capital on the banking system of Ukraine." Herald of Ternopil National Economic University, no. 3(89) (October 10, 2018): 46–59. http://dx.doi.org/10.35774/visnyk2018.03.046.
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The article examines the impact of banks performing operations involving transnational banking capital on the banking system of Ukraine through the use of the principal components analysis. This approach is related to the method of multidimensional statistical analysis and is widely used to reduce the dimension of an analyzed set of attributes, and to select the most informative indicators and classification features. From the research, it is found that the principal components analysis is based on the idea according to which structural properties of relations between variables can be determined by their dependence on fewer non-measureable (concealed, latent, hypothetical) general factors. The direct estimation of the impact of banks performing operations involving transnational capital on the banking system of Ukraine is carried out by means of the application package named Statistica. For this analysis, the following relative indicators showing how Ukraine’s banks perform operations involving transnational capital are used: 1) percentage of funds raised from legal entities; 2) percentage of funds raised from individuals; 3) percentage of owned capital; 4) percentage of profit / loss after tax; 5) percentage of assets; 6) percentage of loans and debts of legal entities; 7) percentage of loans and debts of individuals. Based on the research findings, it is shown that there are three principal components which take into account more than 5% of total variance. However, there is only one component among them the value of which exceeds 1. The second component equals 0.954179, meaning that it approaches 1. The scree plot shows that the breaking point can be viewed as the eigen-value of correlation matrix which equals 23.85%. Consequently, the two principal factors have an essential impact on the processes of foreign capital penetration into Ukraine. It is claimed that the expansion of transnational banking capital into the banking system of Ukraine is controversial. On the one hand, these trends are quite obvious. On the other hand, financial, economic, military, and political instability hampers such processes. In conclusion, it should be stressed that unlike other approaches, the research and methodological approach to scoring the impact of banks performing operations involving transnational capital on the banking system of Ukraine, is based on the principal components analysis. This makes it possible to develop an aggregate index which characterizes the impact of banks performing operations involving transnational capital on the banking system of Ukraine, and to use it for monitoring of structural changes in the banking system.
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Di Biase, Pasquale. "The Impact Of Basel III On Italian Banks Loan Rates: An Accounting-Based Approach." International Business & Economics Research Journal (IBER) 11, no. 11 (November 13, 2012): 1269. http://dx.doi.org/10.19030/iber.v11i11.7407.
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This paper empirically investigates the impact of the new capital requirements imposed under Basel III on bank lending rates.A general accounting equilibrium model is developed in order to map the change in the average interest rate on bank loans which is required to preserve the economic performance and the market value of financial institutions under the new regulatory framework.The study refers to the Italian banking system. According to our estimates, the long-term impact of heightened capital requirements on bank loan rates is likely to be modest.In our baseline scenario, we find evidence that each percentage point increase in the capital ratio can be recovered by increasing interest rates with which borrowers are charged by only 5.75 basis points. We conclude that the Italian banking system should be able to adjust to the higher capital requirements imposed by Basel III through a set of operative and commercial levers with no significant effects on the cost of credit for companies and consumers.