Availability Of Loans Research Articles

International Trade and the Economies of Developing Countries

The economic significance and benefits of foreign trade also known as international trade to the economies of developing countries cannot be overemphasized. Its role and contributions to the gross domestic earnings, employment generation, economic development, and poverty reduction in these underdeveloped countries such as Nigeria, Ghana, Benin Republic, and others have been too glaring especially in agrarian economies with fertile arable land.The main aim of this paper was to examine in-depth the contributions and relationship between international trade and the economic development of developing African countries. Furthermore, this paper recommended stringent macroeconomic policies that when formulated would encourage and increase the multiplier effect of these (foreign) trades. Part of these policies is targeted towards exchange rates, tariffs, import and export duties, subsidies, and actions that promote international trade.The research further concluded that internationaltradeis a key macroeconomic driver that must be encouraged in developing African countries as its multiplier effects have the potentials of driving the needed development goals of these nations. And for this to be achieved, these nations (developing countries) must formulate workable localized macroeconomic policies that suit and drive their interest as against borrowed economic policies from the developed European and Asian nations. Some of the recommendations proffered include adoption of friendly and pro-active export promotion policies, availability of grants, aids, subsidies, and loans, mechanization of the agrarian sector, adoption of flexible exchange rate, etc.This study made use of time series secondary data obtained from the World Development Indicators (WDI) and the United Nations Conference on Trade and Development (UNCTAD) of developing African countries for a period between 2000 and 2019. A forecast of 15 years was also initiated using these data to provide a long-term insight into the benefits of these trading activities on the GDP of developing countries.

The Importance of International Trade to the Economies of Developing Countries

The economic significance and benefits of foreign trade also known as international trade to the economies of developing countries cannot be overemphasized. Its role and contributions to the gross domestic earnings, employment generation, economic development, and poverty reduction in these underdeveloped countries such as Nigeria, Ghana, Benin Republic, and others have been too glaring especially in agrarian economies with fertile arable land. The main aim of this paper was to examine in-depth the contributions and relationship between international trade and the economic development of developing African countries. Furthermore, this paper recommended stringent macroeconomic policies that when formulated would encourage and increase the multiplier effect of these (foreign) trades. Part of these policies is targeted towards exchange rates, tariffs, import and export duties, subsidies, and actions that promote international trade. The research further concluded that international trade is a key macroeconomic driver that must be encouraged in developing African countries as its multiplier effects have the potentials of driving the needed development goals of these nations. And for this to be achieved, these nations (developing countries) must formulate workable localized macroeconomic policies that suit and drive their interest as against borrowed economic policies from the developed European and Asian nations. Some of the recommendations proffered include adoption of friendly and pro-active export promotion policies, availability of grants, aids, subsidies, and loans, mechanization of the agrarian sector, adoption of flexible exchange rate, etc. This study made use of time series secondary data obtained from the World Development Indicators (WDI) and the United Nations Conference on Trade and Development (UNCTAD) of developing African countries for a period between 2000 and 2019. A forecast of 15 years was also initiated using these data to provide a long-term insight into the benefits of these trading activities on the GDP of developing countries.

Socio-economic Determinants of Temporary Labour Migration in Western Jharkhand, India

This article examines the socio-economic determinant of temporary labour migration in Jharkhand. The study uses primary data collected from 12 villages in the western region of Jharkhand. We have used logistic regression model to find out the socio-economic determinant of migration by setting, individual ( n = 4,241) and households ( n = 781). The regression results show that temporary migration is basically from poor households, and migrants are basically male, young and form Scheduled Caste community. Here, landholding and Monthly Per capita Consumption Expenditure (MPCE) have been taken as the indicator of poverty. We find that there is significant and negative relationship between land owned and migration, that is, the more the land owned, the less the household is likely to migrate. Further, we find that higher the MPCE, lesser the induvial is likely to migrate. Poverty, lack of sufficient means of subsistence, unequal distribution of landholding to meet household expenditure, availability of employment opportunities and loan are the main causes of temporary migration. Since temporary labour migration is very large, it needs to be given high priority with specific policy interventions.

Bank relationship loss: The moderating effect of information opacity

We examine the impact on a firm when it is forced to switch its bank relationship from one branch to another branch of the same bank, and how the firm’s information opacity (as proxied by the frequency with which the firm provides financial statements to the bank) moderates the consequences of relationship loss. We find the effect depends on the relative balance between the hard accounting information provided to the bank and the soft information about the firm due to its prior branch relationship. We show the loss of soft information provided to loan officers at the new branch, as a result of the forced branch switch, has a significant effect on the cost, maturity, and availability of loans from the new branch. Furthermore, we document the moderating effect of accounting information opacity on loan conditions upon relationship loss.

Linkage between Financial Inclusion and Economic Growth: An Empirical Study of the Emerging Indian Economy

Inclusive financial system is a key to sustainable development and growth of a nation wherein all segments of the society have timely access to financial services at an affordable cost. It facilitates safe custody of savings, availability of loan for multiple purposes, diversification of risk through investment in different avenue, coverage of risk through various insurance products, etc., which make the life of people easier and comfortable. Therefore, inclusive finance leads to prosperity and economic growth by eliminating or minimizing poverty, unequal distribution of income and dominance of indigenous bankers. Financial inclusion is not a single dimension that can be achieved directly; rather, it is a process which completes after different dimensions such as access to and usage of financial services and banking penetration are accomplished. The present study considers three main dimensions of financial inclusion: usage, penetration and accessibility. The purpose is to observe how financial inclusion is linked with economic growth in India. Spread over 2005 to 2017, the study uses Bayesian vector auto-regression model to explore the linkage of economic growth with financial inclusion and its different dimensions (accessibility, penetration, and usage). The findings show a considerable relationship between economic growth and the usage dimension of financial inclusion in India. As far as financial inclusion index is concerned, it does not explain economic growth significantly. This study is based on recent data extracted from IMF and World Bank databases. The study is useful for policymakers and banks to frame appropriate policies to achieve complete financial inclusion that would lead to a robust growth of an economy.

Challenges of women involved in fishing activities (a case study of Otuocha, Anambra State, Nigeria): A SWOT analysis

The study was focused on the challenges of women involved in fishing activities in Otuocha community, Anambra-East Local Government Area, Anambra state, Nigeria. The study examined the strengths, weaknesses, opportunities and threats of the stated women and analysed their roles and operations. Data collection was through the administration of 60 structured questionnaire and scheduled interview. Data were analyzed using simple percentages, tables and frequency while the SWOT analysis was employed in the deduction of the strengths, weaknesses, opportunities and threats. The study revealed their challenges to be financial, lack of basic amenities, health issues, fluctuating sales and demand, land tenure system, low literacy and training, high indebtedness, family responsibilities and gender inequality. Their strengths were: Population of the women, skills and experience, diversity of fishes in Otuocha community, location of natural water body, Omambala river and low production cost in the study area. However, their opportunities were; producers of successors, presence of fisheries organizations, large market for the fish, creation of value-added fish products, and geographical location of the community market. Their threats were: Competition from other women fisherfolks, lack of modern processing equipment, cultural/traditional forces limiting women from active fishing and seasonal flooding. Availability of loan by financial institutions is therefore recommended to enable women acquire needed facilities. Awareness should be created on gender issues affecting fishing activities of women in Otuocha. There should be periodic training and workshop for the women fisherfolks, there should be formation and strengthening of women's organizations on professionalization of both harvest and post- harvest activities. Women should be involved in decision making in all aspects of fish value chain processes.

Consolidation of Indian PSU banks and the way forward

The increasing non‐performing assets (NPAs) and to meet the higher funding needs, India witnessed the biggest consolidation in public sector banks. In India the surging NPAs is long witnessed concern and major economic reforms were initiated in Indian banking to curb the issue. The recent merger has brought in a major policy concern with this consolidation which is availability of loans to smaller businesses. The paper analyses the impact of banks consolidation on Indian economy by considering both positive as well as negative aspects of banks mergers. The paper also presents the history of Indian banking and recommending a way forward.

The Last Hurrah Effect: End-of-Period Temporal Landmarks Increase Financial Risk-Taking

Are people more likely to take financial risks at the end of a work week? Using a unique panel dataset of peer-to-peer lending loans from Prosper Marketplace, Inc, we investigate whether temporal landmarks associated with the end of a period influence financial risk-taking. We find that investors are more likely to select riskier loans at the last day of a work week (i.e., Fridays) relative to other weekdays (Monday through Thursday). Our results are robust to the inclusion of investor experience, supply-side (e.g., loan availability) and demand-side (e.g., number of investors) control variables as well as time, and geographic fixed effects. Consistent with a mental accounting framework where end-of-period landmarks trigger a last hurrah effect, we find that alternative end-of-period markers (i.e., the Wednesday or Thursday preceding a holiday weekend, the last day of the month) also lead to significant increases in risk-taking. We use a variety of robustness checks as well as a laboratory experiment to rule out several alternative explanations. Finally, we demonstrate that this end-of-period effect has financial repercussions downstream yielding significantly worse returns relative to investments made on other days. We conclude by discussing how this can affect consumers’ financial decision making and policy.

Identifying and prioritizing the critical gender gap indicators using the SHEET module

Women farmers have momentous function in carrying forward agriculture. They have abundant roles and responsibilities in the sector and can play instrumental in transforming the face of agriculture. However, at this backdrop, their quantum efficiency is often hindered by several societal rules and taboos which creates a perceptible gender gap and creates developmental blocks for the sector in specific and society in general aspect. In this study, some critical gender gaps in five fundamental pillars to holistic development viz, Social, Health, Economic, Environmental and Technological (SHEET) facets have been identified and prioritized. The prioritized gender gap in each respective segment were wage rate issue, BMI (Body Mass Index) related issue, loan availability, access and control over land and water, and knowledge level in carrying out primary and secondary agricultural practices. The correlation studies specified the consequence of substantial aspects such as gender sensitization, awareness and access to nutri-food, climate resilient farming practices, credit access and skillupgradation in narrowing the gender gap in respective aspects viz., Social, Health, Environmental, Economic and Technological, respectively. This approach of prioritizing the gender gaps could play an influential role in designing gendersensitive developmental approaches and programmes for holistic and sustainable societal development.

The Effect of the Availability of Student Credit on Tuition: Testing the Bennett Hypothesis Using Evidence from a Large-Scale Student Loan Program in Brazil

We test whether the availability of student loans increases tuition costs, the Bennet Hypothesis. Starting in 2010, there was a major ramp-up in the FIES, a student loan program funded by the Brazilian federal government. FIES’s rules for eligibility produce a marked heterogeneity in the access to funding in different higher education institutions. We take advantage of these rules and of an unique dataset with information on tuition costs at the major-college level, and document two facts. Using a difference-in-differences approach, we show that relaxing access to student loans caused an increase in tuition fees. We also estimate a structural model of demand, and show that relaxing credit constraints reduces the demand price elasticity. Thus the mechanism behind the increase in tuition costs is an increased tuition insensitivity, at least in part.

Firms’ Expectations on Access to Finance at the Early Stages of the Covid-19 Pandemic

This paper provides novel information on the propagation of the pandemic-induced real shock to firms’ financial conditions. It uses firm-level survey data from end February to early April 2020 for a large sample of euro area SMEs and large firms. Firms’ expectations on the availability of credit lines, bank loans and trade credit deteriorated significantly in the first half of March. Firms mostly expected to be affected if they had previously difficulties in securing finance, had higher indebtedness and, hence, less capacity to deal with a liquidity shock. Conditional on these factors, firm size does not seem to matter, except for trade credit, in which case SMEs had more positive conditional expectations. Together with the overall deterioration of expectations, there seems to have also been a reallocation of opportunities to access finance amidst the crisis. Small firms were more likely to have conditional expectations of improvement in their access to finance.

The Provision of Long-Term Credit and Firm Growth in Developing Countries

This study evaluates the impact of the provision of long-term credit (LTC) on the growth of small and young firms in developing countries. The growth of firms is evaluated on the basis of employment growth and total sales. Credit provisions have also been collected from the short- and LTC extended to the private sector. This study uses data on firm levels from more than 19000 firms in 52 countries between 2006–2016. In order to avoid the endogeneity issues that usually occur in such studies, this study has implemented a cross-country model to evaluate the significance of total bank credit, both long- and short-term, on the growth of sales and employment. The econometric results indicate that the availability of short-term credit (STC) is more beneficial for the growth of the firms, i.e. STC was found to have a significant impact on employment growth and sales in small and young firms. Although positive, LTC seemed to have no significance in the growth of the small and young firms. This study suggests that the prime reason behind these results is the availability of long-term loans for small and young firms.

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.

Taking it to the Limit: Effects of Increased Student Loan Availability on Attainment, Earnings, and Financial Well-Being

Growing reliance on student loans and repayment difficulties have raised concerns of a student debt crisis in the United States. However, little is known about the effects of student borrowing on human capital and long-run financial well-being. We use variation induced by recent expansions in federal loan limits, together with administrative schooling, earnings, and credit records, to identify the effects of increased student borrowing on credit-constrained students’ educational attainment, earnings, debt, and loan repayment. Increased student loan availability raises student debt and improves degree completion, later-life earnings, and student loan repayment while having no effect on homeownership or other types of debt. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Kredyty dla gospodarstw domowych strefy euro w okresie restrykcyjnej polityki kredytowej banków i niestandardowych działań Eurosystemu

<p><strong>Uzasadnienie teoretyczne:</strong> W artykule zostal opisany problem zróżnicowania krajów strefy euro pod względem kredytowania gospodarstw domowych przez banki w warunkach restrykcyjnej polityki kredytowej i podejmowania przez Eurosystem niestandardowych działań na rzecz jej liberalizacji. Ograniczona dostępność kredytów dla sektora niefinansowego oraz jej negatywne skutki gospodarcze były pokłosiem globalnego kryzysu finansowego.</p><p><strong>Cel artykułu:</strong> Analiza kształtowania się kredytów dla gospodarstw domowych w krajach strefy euro w okresie od sierpnia 2007 r. do grudnia 2018 r. Za ważną uznano ocenę ich zmienności w czasie oraz przestrzennego zróżnicowania w dwóch podokresach – kryzysu finansowego z utrzymującą się po nim destabilizacją rynku finansowego oraz niestandardowych rozwiązań EBC, mających na celu ożywienie działalności kredytowej banków.</p><p><strong>Metody badawcze:</strong> W badaniu wykorzystano dane liczbowe odnoszące się do należności sektorów instytucji kredytowych oraz zadłużenia sektorów gospodarstw domowych z tytułu kredytów w poszczególnych krajach strefy euro. Charakterystykę lokalnych uwarunkowań w zakresie badanych kredytów przeprowadzono na podstawie wybranych statystyk opisowych, a do identyfikacji ich podobieństwa zastosowano metodę taksonomiczną.</p><strong>Główne wnioski:</strong> Wyniki badania wykazały istotną heterogeniczność krajów strefy euro pod względem cech rynku kredytów dla gospodarstw domowych w obu okresach badania. Analiza zachodzących na nim zmian pozwoliła jednak stwierdzić zgodność ich kierunku w większości państw członkowskich.

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.

From Brides to Business Owners: Microfinance and Women’s Entrepreneurship


 
 
 Women’s entrepreneurship through microfinance programs has been celebrated as a model for reducing poverty and empowering women. Yet, evidence of the incidence of women’s entrepreneurship has been disappointing, leading to much critique and controversy. This article presents case narratives of women enrolled in microfinance programs in rural India who took the leap onto entrepreneurship and used microcredit loans to expand or start their small-scale livelihoods enterprises. These narratives illustrate the particular economic and social conditions that are found in cases where women have transitioned from being dependent, gender-compliant housewives to sole-earners or main breadwinners. Marital failure, functional absence or retreat of husband, economic distress, living in a nuclear household, and absence of an adult son are consistently evident in all cases of women’s entrepreneurship. This qualitative analysis helps us understand why women’s entrepreneurship is not more widespread despite the availability of microcredit loans.
 
 

Belief Updating on Bank Credit Availability and Cash Holdings

We find firms which successfully obtained a bank loan in a crisis reduced their cash holdings post-crisis, using Japanese data from the 2008 financial crisis. Firms received loans primarily from non-main banks. This substitution between borrowing and cash holdings applies to firms with an executive who had served as a CEO or financial officer in the crisis. This resulted in a substantial reduction in borrowing costs after the crisis. These findings are consistent with theories of relationship banking that managerial confidence in the availability of non-main bank loans reduces their precautionary cash holdings both to address a liquidity shortage and to mitigate a hold-up by their main bank. We also find that those who obtained bank loans in the crisis period increased equity investment in their affiliates and R&D expenses in the post- crisis period.

The Impact of Regulatory Measures on the Development of Household Indebtedness

The purpose of this contribution is to evaluate the regulatory measures of the Czech central bank within the context of financial consumer protection aimed at slowing down the growth of the mortgage market by introducing new recommendations to restrict LTV limits and other indicators. Households are taking advantage of the availability of mortgage loans in an environment of economic growth and low unemployment. However, the growth in real estate prices raises fears of an increase in systemic risk caused by the developing gap between the growth of household indebtedness and the growth in real estate prices. The paper recapitulates the main factors of the growth rate of household indebtedness and the extent to which the adopted recommendations are effective.