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Journal articles on the topic 'Small borrowers'
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Abdi, Abdikarin Ahmed, Ismail Ahmed Mohamud, and Fatima Mohamed Hussein. "BORROWER'S CHARACTERISTICS AND LOAN REPAYMENT PERFORMANCE AMONG SMALL AND MEDIUM ENTERPRISES IN MOGADISHU, SOMALIA." Journal of Asian and African Social Science and Humanities 9, no. 2 (June 29, 2023): 87–95. http://dx.doi.org/10.55327/jaash.v9i2.306.
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Loan repayment among small and medium enterprises in Mogadishu has remained a challenge as demonstrated by the low recovery rates recorded by the available financial institutions like commercial banks and microfinance institutions in Somalia. This situation has contributed towards a reduction on profitability margins reported by these financial institutions. This study was set out to establish the effect of borrower's characteristics on loan repayment performance among small and medium enterprises in Mogadishu, Somalia. The information asymmetry theory provided anchorage to the study. It was observed that borrowers’ characteristics significantly explain 70.8% variation in loan repayment performance among small and medium firms in Mogadishu, Somalia (R2=0.708, p<0.05). The study concludes that borrowers’ characteristics are significant predictors of loan repayment performance among small and medium firms in Mogadishu, Somalia. The study recommends that credit officers working among financial institutions should critically and analytically appraise the borrower’s characteristics like gender, age and level of income to qualify for loans. The borrowers among the financial institutions in Somalia should adhere to the principal of utmost good faith without concealing any specific characteristic that they have knowledge of.
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Chaulagain, Ramesh Prasad. "Relationship between Financial Literacy and Behavior of Small Borrowers." NRB Economic Review 29, no. 1 (May 15, 2017): 33–53. http://dx.doi.org/10.3126/nrber.v29i1.52529.
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Financial literacy is an emerging and common concept both of education and finance. In general, the concept is important for every ones who has to manage the money; the concept plays vital role for low income people and small borrowers in particular. The small borrowers are those who borrow a limited amount of money from the licensed financial institutions. The borrowers are small on the basis of their credit limits determined by Nepal Rastra Bank. In this study, financial literacy, as one of the significant factors to determine the financial behavior of small borrowers, was measured to establish the relationship to each other. In this paper, the level of financial literacy of small borrowers was compared with their financial attitude and behavior, for which data were collected from survey of small borrowers of two cooperatives licensed by Nepal Rastra Bank. Chi-square test was applied to test the hypothesis that showed the relationship between these selected variables. The analysis showed that the relationship of financial literacy of small borrowers was significant with their financial attitude and behavior. Hence, we argue that that there is a need of a systematic enhancement of financial literacy of the small borrowers to change their attitude and thereby the financial behavior.
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Comeig, Irene, Esther B. Del Brio, and Matilde O. Fernandez-Blanco. "Financing successful small business projects." Management Decision 52, no. 2 (March 11, 2014): 365–77. http://dx.doi.org/10.1108/md-01-2012-0051.
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Purpose – The current credit rationing strongly influences the viability of SMEs innovation projects. In this context, the practice of screening borrowers by project success probability has become a paramount consideration for both lenders and firms. The aim of this paper is to test the screening role of loan contracts that consider collateral-interest margins simultaneously. Design/methodology/approach – This paper presents an empirical analysis that uses a unique data set composed of 323 bank loans granted by 28 banks to SMEs backed by a Spanish Mutual Guarantee Institution. Findings – The results show that appropriate combinations of collateral and interest rates can distinguish between borrowers with different project success probability: low success probability borrowers finance its projects without collateral and with high interest rates, whereas high success probability borrowers accept loans with real estate collateral and low interest rates. Practical implications – This screening mechanism reduces credit rationing, thus increasing good projects' access to credit. Originality/value – This study provides the first empirical evidence on the effectiveness of collateral-interest pairs as a self-selection mechanism.
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Vinh Vo, Xuan, Tuan Quoc Le, Thi Lam Anh Nguyen, and Hiep Ngoc Luu. "Who Could We Blame? The Impact of Strategic Orientations on the Failure of Financial Institutions." Review of Pacific Basin Financial Markets and Policies 24, no. 02 (June 2021): 2150011. http://dx.doi.org/10.1142/s0219091521500119.
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We evaluate the impact of strategic orientation on the failure probability of financial institutions. Using the US credit union industry as the empirical setting, we find that credit unions which exhibit preferential treatment to borrowers are more likely to fail, whereas those who set operational strategies towards balancing the benefits between savers and borrowers experience a lower failure probability. The impacts appear to be more pronounced in small credit unions and in credit unions which have a lower operating experience. We also find that borrower-oriented credit unions generate lower interest margins while neutral behavior credit unions generate higher margins.
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Setiadi, Tedy, Rina Ratih, Nanik Arkiyah, and Gretha Prestisia. "Detection of Book and Borrower Communities Based on Book Borrowing Records in the Library Using Complex Network Analysis." International Conference on Information Science and Technology Innovation (ICoSTEC) 2, no. 1 (March 5, 2023): 171–76. http://dx.doi.org/10.35842/icostec.v2i1.57.
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To improve user services, libraries need to have deep insight into users and the books they manage. This study aims toidentify the community of users and borrowed books based on book borrowing records using complex network analysis. It starts with collecting book-borrowing data, then converting it into a bipartite book-borrowing network using python programming and visualizing it with Gephi. Network analysis is performed to investigate network properties, and to use the BIMLPA method to find communities. The results of the investigation show that the structure of the book borrowing network is divided into two separate components. One main component of the network represents the optimal process of borrowing books, and the rest consists of many small components representing suboptimal borrowing. Community detection on the main component found 217 borrowing communities and 141 book communities. Most of the communities are small, where the book community is 2-4 members, while the borrowing community is in the form of individual borrowers. This research also produces the top 5 book communities, and borrower communities, the most popular books, and the most active borrowers. The characteristics of the users and the books found can be used as a library reference for a more effective and efficient book development policy strategy, as well as book recommendations for more targeted users.
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DeYoung, Robert, Dennis Glennon, and Peter Nigro. "Borrower–lender distance, credit scoring, and loan performance: Evidence from informational-opaque small business borrowers." Journal of Financial Intermediation 17, no. 1 (January 2008): 113–43. http://dx.doi.org/10.1016/j.jfi.2007.07.002.
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Ma, Zhengwei, Wenjia Hou, and Dan Zhang. "A credit risk assessment model of borrowers in P2P lending based on BP neural network." PLOS ONE 16, no. 8 (August 3, 2021): e0255216. http://dx.doi.org/10.1371/journal.pone.0255216.
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Peer-to-Peer (P2P) lending provides convenient and efficient financing channels for small and medium-sized enterprises and individuals, and therefore it has developed rapidly since entering the market. However, due to the imperfection of the credit system and the influence of cyberspace restrictions, P2P network lending faces frequent borrower credit risk crises during the transaction process, with a high proportion of borrowers default. This paper first analyzes the basic development of China’s P2P online lending and the credit risks of borrowers in the industry. Then according to the characteristics of P2P network lending and previous studies, a credit risk assessment indicators system for borrowers in P2P lending is formulated with 29 indicators. Finally, on the basis of the credit risk assessment indicators system constructed in this paper, BP neural network is built based on the BP algorithm, which is trained by the LM algorithm (Levenberg-Marquardt), Scaled Conjugate Gradient, and Bayesian Regularization respectively, to complete the credit risk assessment model. By comparing the results of three mentioned training methodologies, the BP neural network trained by the LM algorithm is finally adopted to construct the credit risk assessment model of borrowers in P2P lending, in which the input layer node is 9, the hidden layer node is 11 and output layer node is 1. The model can provide practical guidance for China and other countries’ P2P lending platforms, and therefore to establish and improve an accurate and effective borrower credit risk management system.
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Opalo, Vanessa Watters. "Credible risk: private credit bureaus and the work of loan officers in West Africa." Africa 92, no. 4 (August 2022): 625–43. http://dx.doi.org/10.1017/s0001972022000353.
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AbstractIn 2015, the Central Bank of West African States selected a private credit bureau to build a digital platform to collect and analyse financial data across the eight-country West African Economic and Monetary Union, including the activities of credit cooperatives and microfinance agencies that serve many West African borrowers. The credit-reporting platform promises to produce new and valuable knowledge about borrowers’ creditworthiness and risk. But valuable in what ways and for whom? Private credit bureaus rely on vast arrays of personal and financial data in order to produce credit reports and consumer credit scores that claim to represent the creditworthiness of individual borrowers. Cooperative loan officers, instead, understand creditworthiness to be highly variable and rely on relational metrics in order to determine risk as well as carefully overseeing existing loans to ensure their timely repayment. Based on ethnographic fieldwork with loan officers at a small-scale credit cooperative in Lomé, Togo, this article examines how the impending arrival of a private credit bureau and new credit-reporting technologies highlights the distinction between the ways in which credit bureaus and loan officers understand the nature of financial risk, as well as the centrality of loan officers and their management of borrower debt in sustaining the field of small-scale lending in Togo.
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RAHMAN, Ashiqur, Jaroslav BELAS, Tomas KLIESTIK, and Ladislav TYLL. "COLLATERAL REQUIREMENTS FOR SME LOANS: EMPIRICAL EVIDENCE FROM THE VISEGRAD COUNTRIES." Journal of Business Economics and Management 18, no. 4 (August 27, 2017): 650–75. http://dx.doi.org/10.3846/16111699.2017.1357050.
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The purpose of this paper is to examine the determinants of collateral for small and medium enterprises (smes) in the context of Visegrad countries: Czech Republic, Slovak Republic, Hungary and Poland. The data set for this paper was obtained from the Business Environment and Enterprise Performance Survey (BEEPS), which was conducted by the World Bank and the European Bank for Reconstruction and Development (EBRD) from 2012–2014. A binary logistic regression model with different specifications was employed to examine the effect of independent variables on the incidence of collateral. The results show that risky borrowers need to pledge collateral and the reduction of asymmetric information can lower the incidence of collateral for smes. Moreover, we find that female borrowers are more likely to pledge collateral than male borrowers are. The results also suggest that loans with a longer maturity are more likely to be collateralized than short-term loans. We find evidence that bank-borrower proximity can alleviate the incidence of collateral whereas bank concentration may increase collateral requirements. Policy makers may consider these results to implement policies that can promote bank competition and can lower collateral requirements for female borrowers. The paper contributes to the ongoing debate on the determinants of collateral.
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Husain, Shaiara, Kazi Tanvir Mahmud, Md Taufiqul Islam, and Md Abdullah Shihab. "Small Credit for Big Opportunities: A Case of BRAC’s Agribusiness Program in Bangladesh." International Journal of Economics and Finance 8, no. 1 (December 24, 2015): 7. http://dx.doi.org/10.5539/ijef.v8n1p7.
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BRAC provides microcredit to the landless and marginal borrowers to accelerate agribusiness activities in the rural areas. The prime objective of the study was to evaluate the impact of microcredit program on household income of the female borrowers of BRAC. Survey was conducted in the Gazipur district of Bangladesh. Primary data were collected from 417 borrowers who were engaged in agribusiness. Ordinary Least Square (OLS) technique was used to assess the impact of credit on household income. The study shows that the amount of microcredit received by the borrowers made a significant contribution in enhancing their household income. Besides credit, value of agricultural assets, compulsory saving, number of agribusiness pursued by household and training appeared as the key factors in determining income. The study also shows that non-institutional loan and operating cost of agribusiness adversely influenced the household income.
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Yan, Gu Jun. "A Study on Personalized Financial Service and the Development of Community Banks in China." Advanced Materials Research 219-220 (March 2011): 1593–96. http://dx.doi.org/10.4028/www.scientific.net/amr.219-220.1593.
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Community banks maintain advantages in providing personalized financial services. This mainly comes from these banks’ credit managers close communications with borrowers, which make them possible to effectively use the borrower’s information to customize corresponding financial products. The high interest rates and the huge financing gap related to small businesses show that the demand for the development of community banks in China is intense. To achieve “being integrated into the community”, China’s community banks should be set up independently from the grassroots by small businesses and households within communities.
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Agarwal, Sumit, Souphala Chomsisengphet, Neale Mahoney, and Johannes Stroebel. "Do Banks Pass through Credit Expansions to Consumers Who want to Borrow?*." Quarterly Journal of Economics 133, no. 1 (July 10, 2017): 129–90. http://dx.doi.org/10.1093/qje/qjx027.
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Abstract We propose a new approach to studying the pass-through of credit expansion policies that focuses on frictions, such as asymmetric information, that arise in the interaction between banks and borrowers. We decompose the effect of changes in banks’ cost of funds on aggregate borrowing into the product of banks’ marginal propensity to lend (MPL) to borrowers and those borrowers’ marginal propensity to borrow (MPB), aggregated over all borrowers in the economy. We apply our framework by estimating heterogeneous MPBs and MPLs in the U.S. credit card market. Using panel data on 8.5 million credit cards and 743 credit limit regression discontinuities, we find that the MPB is declining in credit score, falling from 59% for consumers with FICO scores below 660 to essentially zero for consumers with FICO scores above 740. We use a simple model of optimal credit limits to show that a bank’s MPL depends on a small number of parameters that can be estimated using our credit limit discontinuities. For the lowest FICO score consumers, higher credit limits sharply reduce profits from lending, limiting banks’ optimal MPL to these consumers. The negative correlation between MPB and MPL reduces the impact of changes in banks’ cost of funds on aggregate household borrowing, and highlights the importance of frictions in bank-borrower interactions for understanding the pass-through of credit expansions.
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Ho Han, Joong. "Does Lending by banks and non-banks differ? Evidence from small business financing." Banks and Bank Systems 12, no. 4 (November 27, 2017): 98–104. http://dx.doi.org/10.21511/bbs.12(4).2017.09.
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Non-bank loans to corporate businesses have shown a dramatic increase compared to bank loans. Despite the increasing importance of non-bank lending, the differences between loans made by different types of lenders are mostly unknown. To uncover the distinctions, the author investigates whether bank and non-bank financial institutions deal differently with information scarcity of small firms by introducing lender-borrower distance as a proxy for information availability. Using the National Survey of Small Business Finances (NSSBF) provided by the Federal Reserve Board, estimate the loan approval probability models after controlling for various borrower characteristics. The NSSBF data is collected by using stratified sampling to ensure sufficient numbers of observations for minority-owned firms. To circumvent potential bias due to the sampling method, the author follows the approach suggested by Wooldridge (1999) and estimates a weighted maximum likelihood estimation to adjust for sampling design. This paper establishes novel evidence supporting the notion that banks and non-bank financial institutions are different in their ability to deal with information scarcity. Bank loan approval probability decreases as distance to their borrowers increases, while its effect on non-bank loan approval probability is statistically insignificant, supporting the notion that non-bank lending is different from bank lending in dealing with information asymmetry.
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Iyer, Rajkamal, Asim Ijaz Khwaja, Erzo F. P. Luttmer, and Kelly Shue. "Screening Peers Softly: Inferring the Quality of Small Borrowers." Management Science 62, no. 6 (June 2016): 1554–77. http://dx.doi.org/10.1287/mnsc.2015.2181.
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Haynes, George, and Myles Watts. "Finance Companies and Small Business Borrowers: An Empirical Investigation." Journal of Entrepreneurial Finance 5, no. 1 (December 1, 1996): 17–42. http://dx.doi.org/10.57229/2373-1761.1179.
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T. Yussuph, Toyyibat. "Leveraging Machine Learning Algorithm to Enable Access to Credit for Small Businesses in the United States of America." International Journal on Cybernetics & Informatics 13, no. 1 (February 28, 2024): 53–65. http://dx.doi.org/10.5121/ijci.2024.130105.
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The research centers on the essential function of loans in driving economic expansion and the intrinsic danger of loan defaults. Small businesses play a crucial role in generating employment and fostering economic growth, highlighting the significance of precise loan eligibility evaluations. The Small Business Administration's (SBA) 7(a) loan program seeks to assist small businesses by providing loan guarantees to mitigate risks for financial institutions (Mini et al., 2018). The study utilizes sophisticated machine learning methods, particularly the Random Forest and XGBoost algorithms, to forecast loan defaults and ascertain ideal loan amounts for small businesses. A dataset comprising 27 variables is analyzed, encompassing loan attributes, borrower details, and loan outcomes. The results highlight the effectiveness of both Random Forest and XGBoost in generating loan default predictions, with a slight edge for XGBoost. Additionally, Linear Regression is used to estimate loan amounts for qualified borrowers. The analysis identifies key factors contributing to loan defaults, with variables such as Term, Disbursement Gross, SBA Approval, and Gross Approval playing a significant role in Random Forest predictions. The study reveals intriguing patterns in loan defaults across various industrial sectors, emphasizing the complex nature of assessing loan performance within these industries (Zhou et al., 2023). This research aims to improve lending practices, benefiting both lenders and borrowers while enhancing our understanding of risk management in the context of small businesses.
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Дмитриева and Olga Dmitrieva. "Short credits and micro-loans for individuals: advantages, disadvantages, the main options." Vestnik of Kazan State Agrarian University 9, no. 3 (December 14, 2014): 11–15. http://dx.doi.org/10.12737/6505.
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In everyday life, unforeseen or unplanned purchases lead to a desire to borrow a small amount on the short term. This problem is known to many people. Currently, the only viable option is short-term loans from commercial banks or micro-loans provided by microfinance institutions. They have their own advantages and disadvantages, and it is designed for a specific audience of potential borrowers. Short-term bank credit is available at any bank that deals with consumer credit borrowers. There are four main types of loans in the short term: a term loan; line of credit; overdraft on a personal map; quick loans. The potential borrower has the ability to get a loan only if certain conditions of the credit institution. Microfinance institutions are engaged in issuing microloans. There are two main types of micro-loans to individuals: consumer loans for a period of one year; term loans to payday. In this type of lending the solvency of the borrower is not evaluated, not studied his income, credit history is not analyzed. The creditworthiness of the borrower is assessed through informal criteria. Despite some limitations and high cost, short-term loans and micro-loans is a great opportunity to purchase desired and necessary goods or solve other consumer problems.
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Abdul Rahim, Syarizal, Mahathir Muhamad, Nur Izzati Mohamad Anuar, Nik Malini Nik Mahdi, and Abd Aziz Mat Hassan. "Determinant Factors Influencing the Microfinance Repayment Performance among Borrowers of Amanah Ikhtiar Malaysia (AIM) in Jerantut, Pahang." Journal of Entrepreneurship and Business 7, no. 2 (July 4, 2021): 21–29. http://dx.doi.org/10.17687/jeb.v7i2.458.
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Microfinance is one of the initiative sources of financial service for poor entrepreneurs that only have small businesses and lack access to banking and other services. Microfinance always focuses on poor people with no steady employment who cannot meet most of the qualifications to get financial services from normal banking. Thus, the abilities of borrowers to pay back their microfinance are one of the arguments that need concentration. The finding revealed that there were only two independent variables which were business experience and loan tenure which had a significant positive relationship with the dependent variable namely microfinance repayment performance among borrowers of Amanah Ikhtiar Malaysia (AIM) in Jerantut, Pahang. The knowledge of borrower was not significantly related to the microfinance repayment performance. The result provided the understanding and insight on AIM’s institution, financial institutions, and academic significance about how loan giving out and avoiding microfinance repayment defaults.
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Bah, Abdul Salami, Chernor Alpha U. Bah, Mohamed Francis Musa, Abdul Fataio Tandason, and Daniel Rince George. "The Effects of Microcredit on Agricultural Production among Small-Scale Farmers in Kori Chiefdom, Moyamba District, Southern Province, Sierra Leone." International Research Journal of Innovations in Engineering and Technology 06, no. 08 (2022): 103–17. http://dx.doi.org/10.47001/irjiet/2022.608013.
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- Lack of capital has been identified as one of the constraints faced by small-scale farmers. The aim of the research was to assess the impact of credit on agricultural production with specific objectives to determine its effect on farm size, labour employment and quantity of inputs as well as output among small-scale farmers in Kori Chiefdom Moyamba District and to determine any significant difference, if any between borrowers and nonborrowers. Structured questionnaires were administered to respondents. Seven respondents were targeted from each of the fifteen (15) villages, which give a sample size of one hundred and five (105) respondents from the chiefdom. The sample consisted of age (youth and elderly), sex (male and female) and rice farmers using the stratified random sampling technique, and the data obtained were summarized into tables, pie and bar charts with percentages and frequency. Secondary data were obtained from both published and unpublished literatures. Results showed a significant difference between borrowers and non-borrowers in farm size, farm output, income status and quantity of all inputs used (except family labour, fertilizer, hoes/cutlasses and animal traction). According to the research, farmers in rural areas had difficult access to agricultural credit and loans. In the research area, only 38 out of 105 farmers (36%) received microcredit for farming, compared to the majority (64%) who did not. Based on the analysis' results, borrowers had farms that were significantly larger than those of non-borrowers; the majority of them (86.6%) had between 6 and 10 acres, while just 13.40% had between 1 and 5 acres. Neither borrowers nor non-borrowers had farms with a size between 11 and 16 acres and above (0%), while the majority of non-borrowers (91.40%) had farms with a size between 1 and 5 acres, 5.60% had farms with a size between 6 and 10. This suggests that the rise in farm size that borrowers experience is more significant when financing to small-scale farmers. The study shows therefore that, access to microcredit over a long period of time impacts positively on agricultural production. Government and the organized private sector should provide credit regularly and timely to farmers.
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Mallik, Rajlakshmi. "Being Credit Rationed: Delay and Transaction Cost." International Game Theory Review 17, no. 02 (April 15, 2015): 1540020. http://dx.doi.org/10.1142/s0219198915400204.
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This paper develops alternative models explaining why households with credit need to finance their projects (enterprises) avoid formal credit. More importantly it argues that the problem of avoidance of formal credit and ensuring credit access is not necessarily restricted to the small borrower or borrowers with inefficient projects. Delay cost and personal loan transaction cost may also cause highly productive projects or larger projects shying away from formal credit in spite of low interest rates. Some of the policy implications of the above findings are also discussed.
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Bidder, Rhys, Nicolas Crouzet, Margaret M. Jacobson, and Michael Siemer. "Debt Flexibility." Finance and Economics Discussion Series, no. 2023-076 (November 2023): 1–64. http://dx.doi.org/10.17016/feds.2023.076.
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This paper documents new facts on the modification of bank loans using FR Y-14Q regulatory data on C and I loans. We find that loan-level modifications of key contractual terms, such as interest and maturity, occur at least once for 41% of loans. Cross sectional differences in modifications are substantial and amplified by borrower distress. Relative to single-lender loans, syndicated loans are 1.5 times more likely to be modified and interest rate changes are twice as likely. Our findings call into question whether 1) creditor dispersion makes loan modifications more challenging and 2) relationship lending between banks and small borrowers creates more scope for flexibility when borrower-level conditions change.
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Morvinski, Coby, and Yaniv Shani. "Misaligned mindsets between borrowers and lenders of small interpersonal loans." Organizational Behavior and Human Decision Processes 169 (March 2022): 104117. http://dx.doi.org/10.1016/j.obhdp.2022.104117.
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Tsuruta, Daisuke. "Can banks monitor small business borrowers effectively using hard information?" Accounting & Finance 60, no. 4 (September 30, 2019): 4291–330. http://dx.doi.org/10.1111/acfi.12544.
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Ushanov, Aleksandr Evgenievich. "Analysis of corporate borrower’s solvency: complex approach." Vestnik of Astrakhan State Technical University. Series: Economics 2022, no. 1 (March 31, 2022): 103–12. http://dx.doi.org/10.24143/2073-5537-2022-1-103-112.
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The cancellation of regulatory relief due to the Covid-19 pandemic, which allowed banks to save on reserves for restructured loans, did not significantly affect the stability of the system in 2021. At the same time, there remains the probability of certain types of systemic risks, including credit risks. During the pandemic the Russian business debts increased by 14% and reached 62.6% of the countryʼs GDP, which significantly increased credit risks for banks. There is a high concentration of corporate liabilities in Russia - a great part of the debt falls on a small number of large borrowers who are serviced by large banks. It is found that reducing the credit risks and increasing the credit activity of market participants can be achieved both by methods of macroeconomic regulation and by improving the mechanism for analyzing the creditworthiness of corporate borrowers at the level of credit institutions. Measures to minimize credit risks are listed. The formula for the final calculation of the level of credit risk is given. The indicators are analyzed on the basis of the Russian Accounting Standards (RAS) and on the basis of the International Financial Reporting Standards (IFRS), the values of debt burden indicators are considered. There is offered a model of such an analysis based on a mixed complex-individual model including an assessment of industry and structural indicators based on expert opinion, existing threats from competitors or the market, transparency of the borrower's activities, as well as the expertise of leading international rating agencies. The model allows predicting the future position of the borrower in the market, as well as taking into account the specifics of lending conditions.
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Kaminskyi, Andrii, Maryna Nehrey, Vitalina Babenko, and Grzegorz Zimon. "Model of Optimizing Correspondence Risk-Return Marketing for Short-Term Lending." Journal of Risk and Financial Management 15, no. 12 (December 6, 2022): 583. http://dx.doi.org/10.3390/jrfm15120583.
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The modern credit market is actively changing under the influence of digitalization processes. Some of the drivers of these changes are financial companies that carry out, among other things, online lending. Online lending is objectively focused on short-term small loans, both payday loans (PDL) and short-term loans for SMEs. In our research, we applied a special segmentation of borrowers based on the whale-curve approach. Such segmentation leads to four segments of borrowers (A, B, C, and D) which are characterized by the specific features of profitability, risk, recurrent loan granting, and others. The model of optimal correspondence between “risk–return-marketing efforts” is elaborated in the mentioned segments. Marketing efforts are considered in the context of the optimization of the marketing-budget allocation. Our approach was essentially grounded in special scoring-tools that allow multi-layer assessment. A scheme of assessment of profitability, risk, and marketing-resources allocation for borrower’s inflow is constructed. The results can be applied to the customer relationship management (CRM) of online non-banking lenders.
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Protas, N. G., I. V. Mikhailyuk, and M. S. Khoroshilov. "The variety of modeling methods in the analysis of financial reporting of the borrower." Vestnik NSUEM, no. 3 (October 2, 2023): 83–96. http://dx.doi.org/10.34020/2073-6495-2023-3-083-096.
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Currently, the development of the efficiency of bank lending is directly related to ensuring sustainable economic growth. A significant increase in the efficiency of the credit process is achieved through the mechanism of preliminary credit analysis – a set of control and settlement measures aimed at identifying and assessing the risks of increasing the volume of loans provided by a credit institution to borrowers. The key disadvantage of classical methods of assessing the financial condition of an enterprise is the static nature of models, which leads to a decrease in their predictive power due to the action of regional, industry, and market specifics. The article presents the results of a study of the most common modeling methods in the analysis of the borrower’s financial statements for the algorithm of their compilation and accuracy in relation to small and medium-sized businesses in the Novosibirsk region. The research methodology includes formal logical methods – analysis, synthesis, induction, as well as methods of mathematical statistics - correlation analysis, attributive distribution, classification. The object of the study is models for assessing the financial condition of the borrower. The subject of the study is assessment tools and methods for assessing the financial condition of an enterprise. The purpose of the study is to develop a universal system of indicators included in the borrower’s preliminary assessment model.
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Aslam, Mohammad, Senthil Kumar, and Shahryar Sorooshian. "Predicting Likelihood for Loan Default Among Bank Borrowers." International Journal of Financial Research 11, no. 1 (October 10, 2019): 318. http://dx.doi.org/10.5430/ijfr.v11n1p318.
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Poverty is a threat to the world. In its extreme form at any part of the world, it will make endanger rest of the world. In fact, it is the source of crime and the worst form of violence. The poor people do not commit any crime but they get punishment out of being born as a poor that is not controllable in their hand. Microfinance has been designed to eliminate poverty and help marginal and poor people through small income generating activities. The borrowers need capital to materialize their dream, may be in a small amount and microfinance can play important role in this scenario. Through microfinance, small entrepreneurs may acquire necessary inputs to start their business. Both local governments and international agencies are trying to eliminate poverty through microfinance programs, services and guidelines. With this concept, Microfinance has been hosted primarily in Bangladesh. Grameen Bank (GB) has been serving large number of people below poverty level in Bangladesh. However, impact of microfinance is still questionable in several studies. Microfinance used properly and returned back to the lender with stipulated amount and time shows its working effectively for poverty alleviation. Otherwise, there must be loan default and the whole system may be in question. We survey with questionnaire to find out factors contributing to loan default among GB borrowers using binomial logistic regression. The results showed that some factors were crucial for loan default and should be treated properly at the start of lending.
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Shu-Teng, L., M. A. Zariyawati, M. Suraya-Hanim, and M. N. Annuar. "Determinants of Microfinance Repayment Performance: Evidence from Small Medium Enterprises in Malaysia." International Journal of Economics and Finance 7, no. 11 (October 27, 2015): 110. http://dx.doi.org/10.5539/ijef.v7n11p110.
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<p>Microfinance was introduced in Malaysia to provide financing services to the poor and Small Medium Enterprises (SME) to start up business. The borrower may use the facility to finance business activities such as to purchase assets and additional capital to expand their business. Microfinance helps SME that have limited access to get loan from financial institutions. Financial institutions specifically commercial bank refuse to provide microfinance facilities to SME due to the high default rate among the majority of borrowers who obtain loan without collateral. In addition, the percentage of non-performing loan (NPL) of microfinance in Malaysia has been increasing. Therefore, the objective of this research is to analyze the determinants of SMEs loan repayment performance in Malaysia. Results showed that there are four variables with significant relationship towards loan repayment namely educational level, business experience, amount of loan and loan tenure.</p>
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Wang, Xiao-Yong, Wei Zhang, Xiong Xiong, Hong-Li Che, and Dehua Shen. "Information and Bargaining Power: Evidence from SME Lending in China." International Journal of Information Technology & Decision Making 14, no. 04 (July 2015): 901–13. http://dx.doi.org/10.1142/s0219622015500133.
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The bank has the access to hard and soft information about small and medium-sized enterprises (SMEs) in order to manage the informational opacity. We carry out the study about the information and bargaining power between lenders and borrowers. Bargaining power is depicted based on more favorable loan rate. The proxy is regressed on hard information, soft information and other variables. We find out that more favorable hard information (Registered Capital and Proceeds of Sale) increases borrowers' bargaining power in China. We also obtain evidence suggesting that the length of borrowers' business affect the bargaining power.
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Anresnani, Deririnda Setyo, Erwin Widodo, and Bambang Syairuddin. "Modelling Integration of System Dinamics and Game Theory for of Financial Technology Peer to Peer Lending Industry." MATEC Web of Conferences 204 (2018): 07006. http://dx.doi.org/10.1051/matecconf/201820407006.
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In Indonesia, internet users from 2013 to 2018 have increased about 52%. This growth indicates that people behaviour change in many aspects of life including in economy. One example is (Fintech P2P Lending). P2P lending is a service that offers online borrowing, lenders can loan to small business or individuals. This is in line with the Indonesia Financial Services Sector Master Plan 2015-2019. Indonesia support the rapid growth of the financial technology ecosystem, but there is need good understanding between related parties such as P2P Lending companies, lenders and borrowers. A system dynamics act as calculators to takes value to fill payoff table in game theory. Integration of system dynamics and game theory can produce the best strategy for Fintech P2P Lending in running its business while considering profit for lenders and borrowers. The best strategy is known by use non-cooperative and cooperative game theory. The result shown the best strategy for each player with non-cooperative game is when the company chooses a high level of profit margin, borrower chooses low level of debt time, and lender chooses high level of ROI. In cooperative game, the best strategy is when the company chooses a high level of profit margin, borrower chooses low level of debt time, and lender chooses low level of ROI.
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Zaidi, Hassan Hamza. "Impact of Microfinance on Socio-Economic Conditions of the Borrowers: A Case Study of Akhuwat Foundation (Lahore)." European Journal of Multidisciplinary Studies 6, no. 2 (June 10, 2017): 239. http://dx.doi.org/10.26417/ejms.v6i2.p239-248.
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Akhuwat Foundation is the leading microfinance institution in Pakistan which provides interest free loans for small businesses to the poorest people of society. Since its launch in 2001, it has disbursed a sum of $110 million to 1.9 million families without any collateral and with a recovery rate of 99.93 %. Such a remarkable achievements by a nonprofit organization makes it a leading interest free (Qarze e Hasna) institution in the world. This study attempts to find the impact of Akhuwat Foundation’s microfinance on socio-economic conditions of the borrowers. Based on primary data collected from old and new borrowers, the study analyzes the impact of microfinance on wellbeing of the borrowers’ households in terms of their housing conditions, food security, children’s education, poverty status, monthly income and expenditures of the borrowers before and after the loan with the help “with or without approach”. Moreover, a non-parametric approach is used to test the difference between old and new borrowers in terms of their consumption expenditure, income, poverty status, housing improvement, access to education, and access to medical facilities. Our results show that Akhuwat’s loans have significantly improved the conditions of the borrowers in terms of their monthly income, expenditures, access to education/ health, and household assets. The impact was much larger for old borrowers than new borrowers. In the end we concluded that Akhuwat’s non-traditional approach of lending to the poor and its model of mutual brotherhood between lenders and borrowers presents great lessons to bring positive change in the society.
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Namayengo, Faith, Johan A. C. Van Ophem, and Gerrit Antonides. "Women and microcredit in rural agrarian households of Uganda: Match or mismatch between lender and borrower?" Applied Studies in Agribusiness and Commerce 10, no. 2-3 (August 1, 2016): 77–88. http://dx.doi.org/10.19041/apstract/2016/2-3/9.
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The alignment of microfinance programs with the context and expectations of the recipients is critical for ensuring clients’ satisfaction and desired program outcomes. This study sought to investigate the extent to which the objectives and design of the BRAC microfinance program match the expectations, context and characteristics of female borrowers in a rural agrarian setting in Uganda. Quantitative and qualitative methods were used to obtain socio-demographic, personality and microenterprise (ME) characteristics of existing borrowers, incoming borrowers and non-borrowers and to obtain information about the microcredit program. We found that BRAC uses a modified Grameen group-lending model to provide small, high-interest rate production loans and follows a rigorous loan processing and recovery procedure. BRAC clients are mainly poor subsistence farmers who derive income from diverse farming and non-farm activities. The major objective to borrow is to meet lump-sum monetary needs usually for school fees and for investment in informal small non-farm businesses. Many borrowers use diverse sources of funds to meet repayment obligations. Defaulting on loans is quite low. The stress caused by weekly loan repayment and resolution of lump-sum cash needs were identified as reasons for women to stop borrowing. The limited loan amounts, the diversions of loans to non-production activities, the stages of the businesses and the weekly recovery program without a grace period may limit the contribution of these loans to ME expansion and increase in income.
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Gnegy, Alan M., Alan J. Wilson, Albert Sementa, Aman McWilliams, Caitlin Helmer, Jacob Kidwell, Kelsey L. Swaim, and Presha E. Neidermeyer. "Education & Entrepreneurship: Implications For Contemporary Microfinance." American Journal of Business Education (AJBE) 4, no. 11 (October 27, 2011): 1–10. http://dx.doi.org/10.19030/ajbe.v4i11.6487.
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In world regions receiving direct foreign aid, beneficiaries of aid often lack the education required to remove themselves from poverty. Micro-lending refers to the initiation of small loans to the neediest of borrowers who are unable to secure traditional financing from financial intermediaries. In order for micro-lending to thrive as a viable alternative to traditional government aid, borrowers must not only receive a loan, but also an education in business to fully equip borrowers with necessary resources to establish and operate a prosperous business entity. The authors will argue for the provision of increased educational resources and discuss the disparities between the US model of education and that of third-world nations. Furthermore, the authors will prescribe steps to develop educational materials and train micro-credit borrowers to better guarantee the viability of microfinance.
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Li, Xin, and Xiujuan Tian. "Research on SMEs’ Reputation Mechanism and Default Risk Based on Investors’ Financial Participation." Sustainability 14, no. 21 (November 2, 2022): 14329. http://dx.doi.org/10.3390/su142114329.
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Small and micro enterprises (SMEs) play a significant role in the market economy. While online lending has brought financial inclusion for SMEs’ borrowers, it has also increased the default risk, which restricts the normative development of online lending. To explore the impact of the reputation mechanism on borrowers’ default behavior, this paper provides a theoretical model of asymmetric information dynamic games under the online lending mechanism and an empirical study, which takes the number of bidders that reflects the investors’ participation as a proxy variable for the reputation effect factor. The theoretical model showed the borrowers’ default behavior is effectively restrained by the increase in the reputation effect factor in the reputation mechanism, and the empirical study found that an increase in the number of bidders can significantly reduce the risk of borrowers’ default, which verifies the conclusion of the theoretical model.
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Berlinger, Edina, Zsolt Bihary, Katalin Dobránszky-Bartus, and György Molnár. "Modern pillories: Overdue debts of the poor." Acta Oeconomica 73, S1 (November 3, 2023): 129–42. http://dx.doi.org/10.1556/032.2023.00038.
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AbstractWe model the consequences of the soft budget constraint in the context of retail borrowers. While János Kornai formulated the term of “soft budget constraint” mainly for organizations (firms, banks, municipalities, NGOs, etc.), we show that it can be applied to individual borrowers as well. We derive the feasibility conditions for private and public debt relief programs in a utilitarian framework and find that lenders have no interest in offering payment reductions if non-performing borrowers are few, have small debts, and are difficult to reach – precisely the characteristics of the poor. In this situation, poor debtors serve better as deterrents, similarly if we put them into a pillory. We calibrate the model parameters to survey data on poor households struggling with overdue debts in small villages in a disadvantaged rural region in Hungary. We find that in normal economic circumstances, private debt relief programs are not feasible. State intervention can be justified by positive externalities and moral considerations.
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Johnston, Timothy C., Alice Ann Yeargin, Teresa Brundige, and Tom Payne. "Reaching Underserved Borrower Prospects: A Case Of A Small Rural Bank." Journal of Business Case Studies (JBCS) 2, no. 4 (July 6, 2011): 29. http://dx.doi.org/10.19030/jbcs.v2i4.4905.
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Banks want to serve all members of their market, to meet government regulations as well as to follow company policy. This paper describes a case study of the efforts of a small rural bank to develop a marketing plan to target potential borrowers in underserved groups. First, market demographic data were used to determine the current population size, income, and race composition of the market. Second, publicly available competitor data were used to assess peer banks in surrounding market areas. The third task was to identify underserved socio-economic groups and develop prospect lists. Fourth, the bank developed outreach efforts to promote bank financial services to target groups. Fifth, the bank delivered educational programs for target individuals and families. Sixth, the outreach efforts were evaluated. Finally, the bank considered options for promoting bank services to underserved residents in the future. This paper illustrates the difficulty for a small, rural bank to diversify its borrower base, and presents some efforts that a bank can take to pursue its goal of serving all members of its community.
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TERENCE ZINGER, J. "THE SMALL ENTERPRISE-BANK LENDER RELATIONSHIP: FURTHER EMPIRICAL EVIDENCE." Journal of Enterprising Culture 10, no. 03 (September 2002): 189–207. http://dx.doi.org/10.1142/s0218495802000086.
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This paper explores selected aspects of the small enterprise-bank lender relationship. Using a sample of small businesses based in Northern Ontario, Canada, it is found that loan approval rates are high and very few borrowers can be classified as being disappointed with their present bank financing arrangements, The results suggest that business size, as measured by the number of full time employees, is positively associated with the level of satisfaction with bank financing arrangements, thus providing partial support for previous studies that have reported that problems between small business borrowers and their banks are more evident for the smallest ventures. In addition, this level of satisfaction is also related to the incidence of visits by the lender to the small firm's place of business. Further, it is found that the sample firms are not accessing non-bank financial institutions to the same degree as their counterparts in other regions of the country. The general implications of these results are discussed and opportunities for further research are identified.
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Burov, Pavel Dmitrievich. "Modern methods of assessing creditworthiness of borrowers – small and medium business entities." Финансы и управление, no. 1 (January 2020): 91–102. http://dx.doi.org/10.25136/2409-7802.2020.1.31737.
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The subject of this research is the methods of assessing creditworthiness of borrowers of small and medium business, which allow assessing the level of risk for the bank. The author examines the dynamics of lending to small and medium businesses over the last decade in the Russian Federation, and analyzes the level of bad debt in the small and medium business loans credit portfolio. Critical analysis is conducted on the modern Russian and foreign methods of assessing creditworthiness of borrowers belonging to small and medium business, as well as highlights their merits and flaws. The author concludes on the fact of absence of a universal efficient method of assessing creditworthiness of small and medium business in Russian practice, overlapping of most of the indicators in the examined approaches, accent on qualitative indexes of the assessment of creditworthiness, and presence of subjective factor in the methodologies. The scientific novelty consists in substantiation of the list of absolute and relative indicators with consideration of existing research on this topic, in order to form express assessment of the creditworthiness of small and medium business, the integral indicator of which can be gained on the bases of taxonomic analysis. Improvements to the methodology of assessing creditworthiness of small and medium business can jump start development of lending to entities of small and medium entrepreneurship.
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Petrović, Jadranka. "The Effects of State Development Banks on the Performance of Small and Medium Enterprises." Economic Themes 56, no. 3 (September 1, 2018): 389–411. http://dx.doi.org/10.2478/ethemes-2018-0023.
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Abstract The views regarding the role and the need for state development banks have evolved in the 20th century, from considering their role as very important in the 1950s, through the stance of their inadequacy and ineffectiveness, to a renewed interest for public development banks at the beginning of 21st century. In this study we will concentrate on the state development banks as an important instrument of state financial support to small and medium sized enterprises (SMEs). The Republic of Srpska Investment-Development Bank (RSIDB) provided the empirical context for our research. By applying the Mann-Whitney U Test and the correlation analysis the authors examined the effect of RSIDB loans on certain business performance indicators of SMEs. From the results of Mann-Whitney U Test it can be concluded that the average sales, number of employees and net profit in the five-year period after using the RSIDB loan is statistically significantly higher for the RSIDB borrowers compared to non-borrowers. The results of correlation analysis show that there is statistically significant positive correlation of medium strength between the use of RSIDB loans and the total sales, net profit and number of employees in the 5-year period after using the RSIDB loan. The study showed the positive impact of RSIDB loans on the growth of sales, net profit and employment of SME borrowers.
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Калачёва, Ирина, Irina Kalacheva, Дмитрий Гавриленко, and Dmitry Gavrilenko. "Bank Lending to Small and Medium Businesses in the Russian Federation: Problems and Solutions." Bulletin of Kemerovo State University. Series: Political, Sociological and Economic sciences 2019, no. 1 (April 18, 2019): 77–82. http://dx.doi.org/10.21603/2500-3372-2019-4-1-77-82.
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Small business is a key segment for the economy of any country. It can be considered an indicator of the economic climate. A well-developed segment of small and medium-sized business helps the state to solve a number of economic and socially significant problems. The present paper describes the role of small and medium businesses in the country's economy, determines its impact on GDP, studies the possibility of SMEs to access money resources, in particular, the possibility of bank lending to this category of borrowers. The research analyses the dynamics of lending to small and medium businesses by commercial banks. The authors determined the level of overdue loans in the total amount of loans granted, as well as the level of the proposed loan products. The study reveals the main problems that prevent the development of bank lending to small and medium businesses, according to both borrowers and creditors. The authors suggest some possible ways to solve the problem.
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Wu, Fengpei, Xiang Su, Young Seok Ock, and Zhiying Wang. "Personal Credit Risk Evaluation Model of P2P Online Lending Based on AHP." Symmetry 13, no. 1 (January 5, 2021): 83. http://dx.doi.org/10.3390/sym13010083.
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With the rapid development of the P2P (peer-to-peer) online lending industry, which is facing significant credit risk, personal credit evaluation is an important method to reduce credit risk. Based on the various indexes of personal credit risk evaluation of domestic and foreign commercial banks, and according to the characteristics of P2P online lending, this paper analyzes the factors that affect the credit risk of P2P online borrowers, introduces the unique risk factors in the field of Internet information, and constructs an index system of personal credit risk evaluation of P2P online lending, which combines qualitative and quantitative indexes, including six major indexes and 21 small indexes. It then quantifies each index and defines the judgment standard of the evaluation results. Using analytic hierarchy process (AHP), expert scoring method, and fuzzy comprehensive evaluation method, this paper establishes a personal credit risk evaluation model of P2P online lending based on AHP method. The public information of two borrowers on the “PaiPai Lending” platform are selected for experimental verification. The results show that the improved personal credit risk evaluation model has better applicability and can evaluate the borrower’s credit status more scientifically, accurately, and comprehensively; thus, it is an effective method of personal credit risk evaluation of P2P online lending.
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Amara, Edmund Benedict. "A Review of The Unethical Business Practices That Causes Loan Default in Small Scale Enterprises in Port Loko Municipality in Sierra Leone." TEXILA INTERNATIONAL JOURNAL OF MANAGEMENT 7, no. 2 (August 30, 2021): 183–94. http://dx.doi.org/10.21522/tijmg.2015.07.02.art016.
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Small scale enterprises are an income stream for the unemployed and under-employed in Sierra Leone. The financing of such a venture is from the loan capital of Micro Finance Institutions and other credit agencies in the country. Default in the repayment of loan capital within prescribed conditions has been an issue because of the unethical practices of lenders and borrowers and hence concern for studies. The primary objective of the study is to do a review on the unethical business practices that causes loan default in small-scale enterprises in Port Loko municipality in Sierra Leone. Such studies will avail recommendations that shall be instruments to minimize the rate of unethical practices of borrowers and lenders within the Pot Loko Municipality. The Specific objectives of the study are to know the attitudes of Lenders and borrowers that influence loan default. Questionnaires were administered to respond to Researched Questions which were framed from the research objectives. Also, Reviews of others writers were done with regard ethical issues. The researcher Used the Likert Scale in preparing and administering the questionnaire. Opinions of Respondents were analyzed using the Structured Package for Social Sciences. The following analyses were done: i) Percentage Analysis, ii) Analysis of correlation by use of the Pearson Correlation. iii). Analysis of coefficient iv) Analysis of Model summary v) Analysis of Anova. From the study, the Researcher discovered that Unethical business practices like bribe-taking and other dishonest games are predominant between lenders and borrowers, and these practices have greatly influenced loan default in small-scale enterprises in Port |Loko Municipality in Sierra Leone and have a significant relationship on loan default.
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Klyuev, Vladimir. "Show Me the Money: Access to Finance for Small Borrowers in Canada." IMF Working Papers 08, no. 22 (2008): 1. http://dx.doi.org/10.5089/9781451868845.001.
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Beveridge, Andrew A. "Local Lending Practice: Borrowers in a Small Northeastern Industrial City, 1832–1915." Journal of Economic History 45, no. 2 (June 1985): 393–403. http://dx.doi.org/10.1017/s0022050700034100.
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An analysis of over 10,000 loans made by a major credit source in Keene, New Hampshire, from 1832 to 1897 is presented. The data sources are unique and include information on property ownership and wealth, occupation, involvement in businesses, age, and connections with the credit source. As time passed more funds were lent to borrowers out of the city and county, lending was used to support many new industrial and other enterprises, as well as for infrastructural and social capital investments. Many loans were made to individuals and businesses with close ties to the source of credit.
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Kim, You Suk, Donghoom Lee, Tess Scharlemann, and James Vickery. "Intermediation Frictions in Debt Relief: Evidence from CARES Act Forbearance." Finance and Economics Discussion Series 2021, no. 055r1 (March 31, 2022): 1–65. http://dx.doi.org/10.17016/feds.2022.017.
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We study the role of mortgage servicers in implementing the CARES Act mortgage forbearance program during the COVID-19 pandemic. Despite universal eligibility, around one-third of the nonperforming federally-backed loans in our sample fail to enter into forbearance. The relative frequency of these "missing" forbearances varies significantly across servicers for observably similar loans, with small servicers and nonbanks, and especially nonbanks with small liquidity buffers, having a lower propensity to provide forbearance. The incidence of forbearance-related complaints by borrowers is also higher for these servicers. We also use servicer-level variation to estimate the causal effect of forbearance on borrower outcomes. Assignment to a "high-forbearance" servicer translates to a significant increase in the probability of nonpayment, which moves essentially 1:1 with the forbearance probability. Part of this additional household liquidity is used to pay down high-cost credit card debt.
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Chaulagain, Ramesh. "Relationship Among Financial Literacy, Attitude and Behaviour." Social Inquiry: Journal of Social Science Research 3, no. 1 (April 30, 2021): 10–29. http://dx.doi.org/10.3126/sijssr.v3i1.46017.
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This study measures relationship among financial literacy, attitude and behaviour. Financial literacy has two attributes, i.e. financial knowledge and skill. Financial attitude is a way of thinking, belief and perception of individuals on personal finance. Financial behaviour is an act of using financial resources for financial independence and well-being. Therefore, measuring the relationship among financial literacy, attitude and behaviour is an important research priority. The study explores the relationship and some factors that contribute to financial behaviours. Using the framework of the theory of planned behaviour, this study interprets its findings. The theory asserts that human behaviours are affected by knowledge and attitude. In this study, a survey was conducted among 393 small borrowers to collect data on financial literacy, attitude and behaviours from four districts of Nepal. Kruskal-Wallis and Chi-Square tests were used to measure the relationships among the variables. The study finds that financial literacy and attitude have significant relationships with the financial behaviours of small borrowers. However, several other factors also affect the behaviours. The study concludes that proper financial education is necessary to change financial literacy and attitude to contribute to small borrowers' financial behaviours. Similarly, the study implies that the government, central bank, and financial service providers are responsible for providing proper and basic financial education to improve financial literacy and thereby change financial behaviours.
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Chaulagain, Ramesh Prasad. "Contribution of Financial Literacy on Behaviour: A Nepali Perspective." Journal of Education and Research 8, no. 2 (December 31, 2018): 75–92. http://dx.doi.org/10.3126/jer.v8i2.27380.
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Financial literacy and behaviour are emerging personal financial agendas both in education and finance. However, financial literacy has behavioural implication and effect on the financial well-being of individuals. Therefore, assessing financial behaviour by measuring financial literacy of individuals is important research attention. In this paper, the contribution of financial literacy on the financial behaviour of small borrowers is measured and analysed. The study follows a quantitative research methodology under the post-positivistic research paradigm. A simple scoring method is used to measure financial literacy and the logistic regression model is used to measure the probabilistic contribution of financial literacy on behaviour. By using a sample survey, the study collects 393 sets of responses from small borrowers selected randomly from four districts of Nepal. Theory of planned behaviour is used to interpret the finding. The theory of planned behaviour states that the literacy i.e. knowledge and skill in financial matters will develop an attitude, and if the attitude is positive, the persons will behave accordingly. The finding explores that improved level of financial literacy contributes financial behaviour of the small borrowers positively. The study concludes that for enhancing financial behaviour, contemporary and contextual financial literacy programs are necessary to educate the individuals. The study also connects financial well-beings with enhanced financial behaviour. Findings of this study are useful for policymakers, financial service users, academicians and financial service providers in Nepal.
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Krasilnikov, Oleg Yu, and Andrey A. Turkin. "Crowdlending platforms development prospects in modern Russian economy." Izvestiya of Saratov University. Economics. Management. Law 24, no. 1 (February 20, 2024): 4–10. http://dx.doi.org/10.18500/1994-2540-2024-24-1-4-10.
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Introduction. The changes in the economic situation, which happened after certain events of February 2022, required significant investment in the development of small and medium-sized businesses. Parallel imports, new market niches to be fulfilled after foreign producers had left, the desire to preserve and increase capital while experiencing ruble devaluation– these and other reasons formed the basis of crowdlending studying in this paper. Theoretical analysis. The growth rates of the crowdlending market in Russia are analyzed and the dynamics of crowdlending and bank loans to small and medium-sized businesses are compared. Empirical analysis. Based on the example of the company “JetLend” LLC, an analysis of the requirements for borrowers and investors, the stages of potential borrowers’ business checking were carried out. A comparative characteristic of the JetLend, IFX Cbond, Cbonds-CBI RU High Yield indices is presented, which suggests that during 3 years, an average investor of the JetLend platform had a higher yield than if he owned a portfolio of high-yield bonds or bonds of the most liquid companies in Russia. Results. Positive and negative aspects of using crowdlending for both investors and borrowers are summed up. It is concluded that crowdlending is a promising tool for small and medium-sized businesses, especially for those economic entities which do not have collateral, credit history or other factors necessary for a bank loan.
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Brady, Samantha, Julie Miller, Alexa Balmuth, Lisa D'Ambrosio, and Joseph Coughlin. "RETIRING AND CAREGIVING IN THE AGE OF STUDENT LOANS: THE IMPACT OF STUDENT DEBT ON RETIREMENT AND LONGEVITY PLANNING." Innovation in Aging 3, Supplement_1 (November 2019): S42. http://dx.doi.org/10.1093/geroni/igz038.163.
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Abstract Saving for retirement and the ability to provide care for a loved one can be dramatically affected by student loan debt. Currently, approximately 44 million people of all ages in the United States carry the weight of over 1.4 trillion dollars of student loan debt. Student loan borrowers of all ages may experience lower financial preparedness for retirement as well as decreased ability to provide care for family members, including aging parents. While older adults hold a relatively small proportion of student loans, they are the fastest growing subset of student loan borrowers and have disproportionately high rates of student loan defaults. As a result of their defaults, the Social Security retirement benefits of Americans ages 65 and older experienced a 500% increase in offsets over the last decade. This presentation will spotlight an MIT AgeLab mixed methods study about how student loan borrowers between the ages of 51 and 75 experience student loans within family systems and perceive and prioritize longevity planning in light of their student loans. Data collected for this study include focus groups and a large national survey. Preliminary findings suggest that for older borrowers, student loans are generally one of several financial constraints that can inform spending and saving decisions. For most, student loan payments are regarded as stunting overall retirement savings while the minority regard the two separately. Older borrowers also tend to have increased financial and familial responsibilities, including caring for aging parents, that compete for borrowers’ limited financial and temporal resources.
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Saavedra, Daniel. "Syndicate Size and the Choice of Covenants in Debt Contracts." Accounting Review 93, no. 6 (January 1, 2018): 301–29. http://dx.doi.org/10.2308/accr-52023.
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ABSTRACT I investigate whether and how syndicate size influences the type of covenants used in debt contracts. Prior theory and evidence suggest renegotiation considerations from coordination difficulties in large syndicates and intertemporal transfers due to relationship lending in small syndicates are factors in the design of covenants. I find that for large syndicates, borrowers and lenders avoid the use of flexibility-reducing covenants that are more likely to impact negatively on value-enhancing corporate policies in good states of the world. This effect becomes stronger when the borrower has fewer outside financing options. Additionally, I find contracts with large syndicates are more likely to have more covenant slack, include performance pricing provisions, have tailored capital expenditure covenants, and principally rely on covenants that are directly linked to the current performance of the borrower. Collectively, these results imply that syndicate size and related renegotiation considerations affect how accounting information is used in debt contracts. JEL Classifications: G32; G21; C78; L14.