Availability Of Bank Loans Research Articles

Effect of Economic Risk Sources on the Quality of the Business Environment in the SME Segment: A Case Study from the Slovak Republic

The aim of the article is to define and quantify the impact of specific economic risk sources on the quality of the business environment (QBE). The subject of the analysis was the evaluation of the impact of selected economic risk sources, including the macroeconomic environment, monetary policy and interest rates, and corporate financing on the QBE. Data was collected between 2018 and 2022 using an online survey method. A total of 480 SMEs from the Slovak Republic’s business environment completed the questionnaire. Advanced statistical techniques, including descriptive statistics, correlation analysis, and linear regression analysis, were employed to evaluate the statistical hypotheses. The empirical results yielded several significant findings. All examined sources of the macroeconomic environment, such as the level of basic macroeconomic indicators, the state of the macroeconomic environment in the context of starting a business, and innovation activities of SMEs, determine the QBE. Other key factors that positively influence the quality of the business environment include: stabilization of the business environment by the central bank's monetary policy; the level of bank interest rates on the innovation activities of companies and availability of bank loans. The findings are significant not only for the SME segment itself and their owners and top managers but also for national-level institutions along with non-profit organizations assisting in improving the entire SME segment in the business environment.

Unraveling the Loan Growth Threshold Effect on Non-Performing Loans During Total Dollarization in Zimbabwe

The availability of bank loans is a vital component in determining the investment and spending patterns that influence economic growth. This article examines the threshold effect of loan growth on non-performing loans (NPLs) in the Zimbabwean banking industry during dollarization. The study employed panel threshold regression models developed by Seo et al. (2019) and Kremer et al. (2013) on a panel of thirteen banks from 2009 to 2017. The study revealed that locally owned banks held a higher percentage of NPLs (12.7%) than foreign-owned banks (6.1%) during the period under study. The study also documents a loan growth threshold level of 38%. On average, the industry lends excessively, as demonstrated by the 48% loan growth rate. Primarily, local banks dominate this rate by lending above the threshold compared to foreign banks. The study observed that, below and above the threshold, loan growth exerts a negative and significant effect on NPLs. Based on the results, it can be recommended that banks should devise strategies to maintain a steady loan growth rate, enhance profitability, and effectively monitor liquidity risk exposure. The findings provide insights into reviewing bank credit policies and prudential guidelines.

Distance and Financial Connection: Dynamics in Private Firms’ Bank Loan Availability

ABSTRACT This study investigates the impact of borrower-lender distance on credit availability for private firms. Utilizing an extensive loan record history, we categorize loans into initial and subsequent borrowings. Our analysis reveals a consistent trend: loan size diminishes with increasing distance, even after accounting for Fintech effects. A noteworthy finding is the divergent role of financial connections. During initial borrowings, they mitigate the adverse effects of distance, while in subsequent borrowings, they become a positive signal to lenders, particularly post-soft information insights. These insights highlight intricate dynamics in credit availability, emphasizing the evolving roles of technology and financial connections in shaping lending relationships for private firms.

Availability of bank loans for economic entities in Kazakhstan: assessment of the interrelation of influencing factors

Currently, the credit opportunities of the financial and credit sector are strategically important in ensuring the full development of economic entities, modernization and diversification of production, financing of investment projects. In Kazakhstan, in order to implement state programs, strategies for the development of the financial and credit sector are being developed, modern mechanisms for regulating and stimulating the lending activities of second-tier banks are being used. At the same time, it is noted that the target indicator for expanding the participation of banks in financing the economy has not been reached due to the negative impact of macroeconomic and geopolitical factors, including a decrease in business activity, the dependence of large enterprises of Kazakhstan on external borrowings and others. The article substantiates that the limited access to credit resources is a serious obstacle for economic entities, including small and medium-sized enterprises. A comprehensive solution to the problems in this area is needed to improve the process of interaction between credit institutions and economic entities. Increasing the availability of loans for the real sector of the economy can be achieved through the use of digital technologies, including big data analytics and artificial intelligence in decision-making and the formation of credit conditions.

Bank Loan Availability and the Performance of Small and Medium Enterprise in Osogbo Metropolis Osun State, Nigeria

Existing researches have proved that bank loan availability for small scale businesses is one of the defining factors for survival and development of entrepreneurship. This study therefore examined the impact of bank loan availability on the performance of selected small and medium enterprises (SMEs) in Osun State, Nigeria. Descriptive survey research design was adopted and data were collected using a well structured questionnaire. Stratified and systematic random sampling techniques were employed in selecting the sample size. A total of 120 copies of the questionnaire were administered on the selected small scale business owners out of which only one hundred and two were adequately filled and returned. The Multiple regression and correlation analyses were used to test the hypotheses generated for the study. Findings revealed that there is a significant correlation between access to loan and performance of SMEs in Osun State (bank loan availability was statistically significant at 95% confident limit and sig 0.000); the R2 value = (0.842), implied that firm’s characteristics also have positive impact on performance in the selected SMEs in Osogbo, Osun State and the R2 value = (0.736), also implied that entrepreneur’s characteristics have significant relationship with performance of the SMEs in Osogbo, Osun State. The study concluded that bank loan availability has significant impact on the performance of SMEs in Osogbo, Osun State. The study recommended that banks should put various and active measures in place to determine entrepreneurs’ access to loan instead of loan base on personal contact’s concept.

Entrepreneurial Competencies and Performance of Women-Owned Micro and Small Agribusiness Enterprises in Bomet County, Kenya

Entrepreneurship is becoming more widely recognized as a key driver of economic development, efficiency, innovation, and employment, as well as a key component of economic dynamism. Entrepreneurial competencies have contributed to the growth and expansion of most women-owned micro and agribusiness enterprises in. The women-owned Agribusiness has field is developing rapidly and widely to include entrepreneurs who are committed to solving societal problems. However, despite numerous government policies aimed at boosting women-owned micro and agribusiness enterprises in Kenya, the growth rate of such businesses has remained low. This has over time been attributed to various challenges women encounter in the course of their economic empowerment. The research aimed achieve the following specific research objectives; to analyze the effect of savings mobilization on the success of women-owned micro and small agribusinesses; to evaluate the effectiveness of entrepreneurship training on the success of women-owned micro and small agribusinesses; to analyze the impact of market research on the success of women-owned micro and small agribusinesses; and to analyze the effect of financial accessibility on the success of women-owned micro and small agribusinesses. The study targeted 381 women operating their agri-businesses enterprises in Bomet County, Kenya. From a total of 381, the researcher randomly selected 79 women-owned enterprises in Bomet County. Quantitative data were gathered mostly using a questionnaire with no open-ended questions. The results were analyzed with both descriptive and inferential statistics. Frequency and percentage breakdowns, as well as inferential statistics such as regression analysis, were employed. The outcome was showed in tables and charts. The study outcome revealed an existing positive and significant correlation between financial accessibility, entrepreneurship training, market research and savings mobilization and performance of women-owned enterprises. These results suggest that greater availability of bank loans has facilitated the growth of many small and micro-sized agricultural enterprises owned by women in Bomet County. The study found that having easy access to capital was crucial to the success of both new and existing enterprises. The study concluded that women micro and small agribusiness enterprises conduct market research to assess customer needs. The study concluded that the women micro and small agribusiness enterprises has diversified revenue sources to enhance savings. It is possible to provide a recommendation based on the results that, Bomet County Women micro-entrepreneurs should register their establishments and observe regulatory necessities to reduce turbulences of their business processes. For this will boost the chances of obtaining financing from financial organizations and women groups. The women of Bomet County should also dedicate significant time and effort to developing a clear purpose and goal for their micro-businesses.

Does the Adoption of Digital Payment Improve the Financial Availability of Farmer Households? Evidence from China

Digital finance carries the expectation of achieving inclusiveness. The purpose of this paper is to explore how digital finance can improve the financial availability and the extent to which digital finance can improve the financial availability of farmer households. Based on micro-rural survey data in China from 2017 to 2019, employing the Cov-AHP weighting method, this study measured the index of financial availability (IFA) of farmer households in terms of three dimensions: investment, bank loans, and private finance. We analyzed the mechanism of how digital payment adoption affects the IFA of farmer households based on the Long Tail Effect theory of Anderson. Ordinary least squares method and ordered probit model was constructed to empirically test the impact of payment adoption on the IFA of farmer households. The research results show that (1) the IFA of Chinese rural households is still at a low level; (2) while the availability of investment is very low, the availability of bank loans is relatively high; and (3) the adoption of digital payment has a positive impact on improving the IFA of farmer households, including the availability of investments, bank loans, and private finance. The results are robust to model misspecification and reverse causality. The evidence also suggests that the adoption of digital payment mainly affects the financial availability of farmer households through information effects. Therefore, attention should be paid to broadening information channels and promoting the adoption of digital payments to improve financial access for farmer households. This study contributes to the comprehensive understanding of the financial situation of households by constructing a financial availability indicator system from three dimensions. By analyzing the impact of digital payment adoption on farmers’ financial availability, this study helps to understand how digital finance can play a positive role in farmer households’ financial conditions.

CHANGE IN THE LEVEL OF CORPORATE LENDING IN POLAND DURING THE COVID-19 PANDEMIC

The main theme undertaken in this paper is the assessment of the impact of the COVID-19 pandemic on corporate lending. The main objective of the article is to analyze the qualitative and quantitative changes in the level of corporate lending in Poland. The author focuses, on the one hand, on the ability of firms to incur liabilities and, on the other hand, on the changes in bank lending rules over the course of a changing economic reality burdened by the crisis caused by the pandemic. The individual analyses also show a broader comparative context by referring to statistical data before the onset of the virus crisis. In the case under review, uncertainty about the health of the MSP sector during the crisis weighed on the tightening of credit policy. An increase in demand for bank financing in the pandemic period was reported by both large companies and micro enterprises. However, only in the case of the former did the availability of loans increase. As a result, the gap between the availability of bank loans to large firms and the MSP sector widened.

Current Trends in Bank Financing of Small and Medium-Sized Businesses in Russia

The development of small and medium-sized businesses in Russia is associated with a number of problems, including low availability of bank loans as the main source of financing activity. During the pandemic, measures provided at the state level to support entrepreneurs helped to mitigate the negative consequences, however, the reduction in the number of small and medium-sized businesses continued. The purpose of the study is to analyze current trends in the development of bank financing of small and medium-sized businesses, the impact of the pandemic on its main indicators. The article examines the dynamics of the main indicators of bank financing of small and medium-sized businesses in 2019–2021: loan debts, including overdue loans, the volume of loans issued. With the help of Spearman's rank correlation coefficient, the relationship between the indicator of the debt burden of small and medium-sized businesses and the level of overdue debt on loans granted to small and medium-sized businesses in the context of federal districts is determined. The study showed that the relationship between these factors is weak, therefore, at present, the level of the debt burden of entrepreneurs does not significantly affect the formation of overdue loans, which puts forward the task of further searching for the causes of its occurrence and ways to reduce it.

Bank lending to agricultural enterprises in Kazakhstan: current state and problems

The goal is to determine the role of bank lending to agriculture, to analyze the sectoral structure of loan investments in real sector of economy, the volume of loans to agricultural sector, to clarify the reasons for the reluctance of banks to lend to AIC and to study the factors hindering the development of lending relations. In this regard, the objective was set to consider the state and identify problems of lending to agricultural entities by second-tier banks. The main problems of the availability of bank loans for agro-industrial enterprises are identified. Results – the current state of lending to agricultural production by commercial banks was analyzed, the main problems of the availability of bank loans were considered, and proposals on the effective financing of enterprises in agricultural sector of economy of Kazakhstan in modern economic conditions were developed. It is shown that the provision of agricultural enterprises with credit resources is determined by a number of features inherent in agriculture. Thus, the risky nature of agricultural activities is noted due to specific features and the lack of liquid collateral. The paper notes that banks are attracted to large businesses that are able to provide collateral and, accordingly, qualify for a large amount of lending funds. These factors, along with the financial condition, are decisive for creditor banks. Based on the analysis of bank lending to agricultural enterprises, it was concluded that the current system of lending to agricultural enterprises is not effective enough. The authors state that in order to ensure the availability of financial resources for agricultural producers, an optimal mechanism for the interaction between agricultural producers and commercial banks in lending procedure is necessary.

Determinants of Entrepreneurial Intentions of Youth: The Role of Access to Finance

This study aims to highlight the role of access to finance as one of the determinants on the decision to enter into entrepreneurship of students regarded as potential entrepreneurs. For achieving our main objective, we created a questionnaire. As a method of analysis, we run the least square logistic regression, with entrepreneurial intentions as a dependent variable and knowledge, education and availability of financial resources as predictors. We also included gender, university and locality as control variables. The sample is formed of 181 students from two universities from the North-Eastern region of Romania. The results reveal that access to finance is a significant determinant of the decision to enter into entreprenenruship for young people. Moreover, we show that the relation between access to finance and entrepreneurial intentions changes according to gender, university and locality of origin. Female students’ entrepreneurial intentions are influenced by the availability of bank loans and personal savings, while in case of male students - only by the availability of funds coming from family and friends. The funds coming from family and friends also determine students' entrepreneurial intentions coming from rural or urban areas. Entrepreneurial intentions are negatively related to education for male students and those coming from an economic profile university, and positively related to business knowledge only for students from rural areas. The results obtained could be important for financial resources providers (because they offer insight into how easy access to finance stimulates the entrepreneurial intentions of youth), for education providers (who can adapt their training programs and extracurricular activities to strengthen entrepreneurial intentions), and for decision makers (which may adopt appropriate policies to stimulate the economic development of an area).

MODERN PROBLEMS OF BANK LENDING OF ENTERPRISES OF THE AGRICULTURAL COMPLEX OF UKRAINE

Abstract. The purpose of the article is to identify the main factors that constrain lending to enterprises of the agro-industrial complex of Ukraine, to suggest ways to improve their lending system. A systematic approach was chosen as the methodological basis of the study, which provides for a comprehensive study of the bank lending system of the agro-industrial complex. Historical and structural-functional approaches were also used in its analysis. Methods of comparative analysis were used to consider some problems of bank lending to the agro-industrial complex. Of the general scientific methods in this study, methods of analysis and synthesis, induction and deduction were used. The article examines the dynamics and structure of loans to the agro-industrial complex in Ukraine for 2015—2020; the dynamics of interest rates on loans to the agro-industrial complex and the dynamics of agricultural production by UAH 1. credit provision of the agro-industrial complex in Ukraine for 2015—2020. During the analyzed period, these indicators increase or decrease proportionally, as evidenced by the importance of the efficiency of credit support of the agar sector. In 2020, the efficiency of credit provision of the agricultural sector amounted to UAH 11.64, which is UAH 0.4 more than in 2015. The analysis revealed that the agro-industrial complex today has a high need for financial resources. The characteristic of the main problems of the mechanism of crediting of an agro-industrial complex is given. The need to ensure the availability of bank loans has been identified. Stimulating investment lending to agricultural enterprises will have a positive impact on the development of the industry, as well as improve the existing economic situation of rural residents. High demand for credit resources from agricultural producers, the current state and dynamics of lending to the agro-industrial complex in Ukraine allow us to conclude that it is necessary to improve the mechanism of bank loans, develop effective credit products for the agro-industrial complex and strengthen state support for agricultural lending. Keywords: credit, banks, enterprises of the agro-industrial complex, credit programs for the agro-industrial complex. JEL Classification G21, Q14 Formulas: 0; fig.: 3; tabl.: 1; bibl.: 15.

Assessing the Impact of COVID-19 on Corporate Investment Behavior

The current wave of COVID-19 outbreak has created new strategical challenges for policy officials of the industrial sector across the world. The effect of COVID-19 is more in developing economies where industrial sector is already struggling for its stability. This study introduces the impact of COVID-19 on the corporate investment behavior of non-financial publicly listed firms of Pakistan. To achieve the objective, we employ the panel data ranging from 2010 to 2020 and apply the difference-in-differences (DID) model to quantifies the empirical relationship. The outcomes of DID model suggest that the pandemic period and treatment have a significant and negative impact on corporate capital investment behavior. During pandemic spread period, the enterprises have limited their investment into fixed assets due to less productive use of such assets. Similarly, industries that exist in high-impact areas face a negative investment growth rate due to quarantine policy, fewer social movements, and high installing cost of new machinery. However, this negative effect diminishes across those firms that have a quick cash inflow rate and more availability of bank loans. These two factors serve as a financial setback against the adversities of pandemic. By drawing upon the empirical reasoning on the effect of COVID-19, this study also presents possible solutions to alienate unfavorable impacts of this pandemic. Current analysis can be considered as an early attempt towards investigating the consequences of COVID-19 on investment decisions of industrial sector.JEL Classification: G32: G31: G40: C33 Doi: 10.28991/esj-2021-SPER-11 Full Text: PDF

Trade Credit as a Determinant of Firm’s Financial Performance: Moderating Role of Bank Financing

The objective of study is to find out the impact of trade credit on a firm’s financial performance and how this effect diversifies when enterprises acquire bank loans to finance the trade credit channel. To achieve the objective, we employ the data of 6,654 non-financial-sector firms from 12 Asian economies and apply fixed-effects model to estimate the regression. The statistical output of the model provides consistent evidence that the firms that adjust their trade credit activities through bank financing perform better financially. Acquisition of bank loans to expand the trade credit activities is a healthy financial activity because it provides financial setbacks in case of any fluctuation in trade credit. However, acquiring bank loans when firms have no operational need for such types of funds can disturb their financial health. Briefly, the analysis provides novel evidence that efficient usage of bank loans into physical business activities can intensify financial efficiency of corporate firms. The analysis provides financial guidance to corporate managers that before entering into any trade credit terms, they should ensure the availability of bank loans because it provides a strong financial pace against any financial shock.

THE IMPORTANCE OF FINANCIAL LEVER IN THE MANAGEMENT OF ALTERNATIVE ENERGY DEVELOPMENT

The use of renewable energy in Ukraine is steadily increasing year by year. This is facilitated by the annual doubling of financial investment in energy production using alternative sources. There are many tools to manage the development of alternative energy. But the most influential are financial and credit instruments. The improvement of technology reduces the cost of capital and operating costs. But the issue of tariffs, benefits, availability of bank loans and their rates is in the hands of state regulators. The paper also analyzed the prospects for market development. The projection results for the period 2020—2035 presented in the article indicate significant changes in the consumption of fuel and energy resources by their types. The analysis of the forecast data proved that the predicted results can only be achieved by doubling the use of renewable energy during this period. This result can be achieved if alternative energy development management is applied. The need to manage the development of alternative energy in its different forms requires the use of appropriate methods and tools of public administration. Therefore, the classification of ways, tools and methods of development management has become extremely important. This classification proposed in this paper allows us to apply a systematic approach to the selection of effective tools, ways and methods of managing the development and modernization of efficient production and use of energy using renewable energy sources. It is established that the average profitability of alternative energy projects is ~ 20% and the payback period is 5-6 years. To compensate for the technological and economic shortcomings of certain types of energy production, it is proposed to optimize costs by investing in their integrated use. To encourage investment in alternative energy projects, it is proposed to introduce competitive energy purchases in the market. According to the calculations, it is possible to reduce the «green» tariff by 10% and then reduce it by 2.5% annually for three years. The combined «green» tariff for solar and wind energy installations of households should be 0.1228 EUR / kWh.

The problem of lending to agricultural enterprises in the context of the COVID-19 pandemic

The main obstacle to the implementation of lending to agricultural enterprises is the high cost of credit. In our opinion, an adequate state agricultural policy should increase the interest of commercial banks in providing loans. In our opinion, it should be aimed at increasing the availability of bank loans for agricultural enterprises. For this purpose, it is advisable to partially compensate the payment of bank interest by agricultural enterprises. In the world practice in the banking sector, negative rates of return on deposits have found application. Commercial banks are able to borrow money at a discount rate. At the moment, there is a practice according to which the Central Bank has only one discount rate. In our opinion, there could be several discount rates at the same time. We hold the view that depending on the purposes to which the commercial bank directs the funds received from the Central Bank, the size of the Central Bank’s discount rate may be different and even have a negative value. We believe that the negative discount rate applied by the central bank for lending to commercial banks to continue providing loans for the purchase of agricultural machinery could encourage them to issue loans to agricultural enterprises. In our opinion, the use of a negative discount rate of the Central Bank in some cases may contribute to the realization of the bank’s credit potential and enhance its lending activities.

Credit Availability and Voluntary Disclosures: Evidence from Interstate Bank Branching Deregulation

This study examines whether the increased availability of bank loans affects borrowers’ voluntary disclosures. Exploiting the staggered deregulation of interstate bank branching across states in the U.S., I find that bank-dependent firms decrease their voluntary disclosures following bank branching deregulation. This overall effect is muted for firms with higher information asymmetry in the public capital markets and higher litigation risk. Furthermore, the decline in voluntary disclosures is more pronounced among borrowers with higher proprietary information costs and stronger lending relationships with their lenders. Further analysis reveals that bank-dependent firms that stop issuing earnings guidance after branching deregulation experience decreased liquidity in the equity market. Overall, this paper sheds light on how regulatory changes in the banking sector have externalities on borrowers’ disclosure decisions.

Источники финансирования малого бизнеса на финансовом рынке

The spread of the COVID-19 pandemic has caused a sharp decline in household and business incomes. At the same time, it should be noted that the financial markets suffered the most. The article considers the factors that determine the level of financial activity of small and medium-sized businesses in the Russian financial market. Measures were proposed to increase the availability of bank loans, and an alternative source of financing was recommended.

Finansiranje sektora MSP u Srbiji putem bankarskih kredita - krizni i postkrizni trendovi

The SME sector in Serbia is extremely important for the economy of Serbia as it makes a large part of the non-financial sector, employs the most people in Serbia and participates largely in the GVA of Serbia. However, SME sector it is still insufficiently profitable and non-efficient. Bank loans are the dominant external way of financing SME sector in Serbia. The financial crisis, which has started in 2008, has affected the movement of interest rates, the availability of bank loans, bank loan security requests and the level of non-performing loans. First signs of the recovery of SME sector in Serbia have been seen in 2013.

The Financing of Small and Medium-Sized Enterprises: an analysis of the financing Gap in Brazil

While small and medium-sized enterprises (SMEs) are important for economic growth and employment, they face numerous obstacles in accessing external finance. In this article, we review recent developments in the availability of financing for SMEs in Brazil, focusing on the greater use of equity and debt for SMEs. In assessing the barriers to external financing, we focus on the role of bank characteristics, market structure and variations of interest rate spreads across banks and time. Moreover, as banks retreat from SME financing, we examine the potential for SMEs to seek new sources of financing from private equity and venture capital funds. We examine the changes in the availability of bank loans between 2014 and 2016. By considering demand, we estimate the SME loan gap based on Central Bank and publicly available data. Our results show that the loan gap in Brazil is substantial. Finally, we show that the gap grew from 54.29% in 2014 to 87.5% in 2016.