Bank Loans Research Articles

The Effect of Economic Uncertainty on Access to Finance: An Empirical Examination for European SMEs

This study examines the effect of economic uncertainty on the probability of access to finance for the years between 2015 and 2020. Survey on Access to Finance of Enterprises (SAFE) dataset is used for measuring the level of access to finance and The IMF World Uncertainty Index (WUI) is considered as a proxy for uncertainty. According to probit regression model results, the uncertainty negatively affects the probability of firms’ access to bank loans while positively affecting the likelihood of access to trade credit. The results also reveal that some firm-level and macroeconomic indicators significantly impact access to finance.

The Impact of SME Financing Policies on Financial Reporting: A Case Study

Considering financing crucial for the daily survival of entities, it is fundamental to understand the impact of the measures taken by companies regarding the financing obtained. Therefore, the study aims to analyse the impact of financing policies on the financial reporting of entities through an analysis of the financial statements for the year 2021 of three entities. After analysing the results, it is demonstrated that bank loans are the main source of financing used by entities to fund their investments. However, it is noted that the entities under analysis seek external sources of financing, which has significantly increased their financial dependence. Therefore, when compared to their industry sector, these entities have a much lower level of financing via Equity. Regarding the financing costs incurred by their financing policies, it is observed that these are significantly high, mainly in relation to the weight of financing costs in total EBITDA, which impacts the net result of the period. Finally, the high impact of the rise in the Euribor rate on financing costs in 2023 was demonstrated. Thus, it is evident that in relation to other sources of financing, their respective expenses will increase dramatically, potentially greatly affecting the results of the companies.

PROBLEMS AND PROSPECTS OF THE DEVELOPMENT OF BANKING REGULATION AND SUPERVISION IN UKRAINE

Effective banking regulation and supervision are key factors for ensuring the stability of the national banking system of Ukraine. The purpose of this article is to analyze the peculiarities of banking regulation and supervision in Ukraine in order to identify problems and possible ways of development, including in the context of world experience. The article examines the theoretical aspects of the essence of the concepts of banking regulation and banking supervision. The main indicators of the banking system of Ukraine for 2020-2024 and the mechanism for identifying risks in the activities of banking institutions are also considered. The global trends in banking regulation at the current stage are its centralization, the concept of risk-oriented supervision, the introduction of new financial technologies, the development of the principles of proportional banking regulation. The main positive and negative methods of supervision in the banking sector are singled out. It has been proven that the conditions of a full-scale military conflict significantly undermined the development of the banking system of Ukraine. The destruction of infrastructure, loss of customer confidence, risks to the bank's loan portfolio and capitalization have become major problems. In addition, the decrease in liquidity and the growth of inflation risks create serious challenges for the banking system. The degree of suitability of world models in terms of the priority tasks of the state regarding the regulation of the banking sector is analyzed. Directions for improving banking supervision through improvement of banking activity licensing procedures are proposed; introduction of permanent monitoring of the activities of domestic commercial banks, in particular their financial condition; implementation of constant monitoring of compliance with banking regulations and current legislation; introduction of permanent inspections of banking activities; implementation by commercial banks of ongoing internal control and external audit control; developing and sending supervisory instructions for banking institutions regarding the implementation of Basel III standards.

Spillover Effects of the SEC's Regulatory Oversight on Private Debt Contracting: Evidence from Cross‐listed Foreign Firms

ABSTRACTWe examine the effect of the Securities and Exchange Commission's (SEC) regulatory oversight on private debt contracting outcomes, using the signing of the multilateral memorandum of understanding (MMoU) as a natural experiment. The MMoU enables the SEC to take stricter punitive actions against wealth expropriation by cross‐listed firms’ insiders and enforce better compliance with applicable rules and regulations. We find that enhanced SEC oversight in the post‐MMoU regime lowers loan spreads by 36 basis points, thus saving an average cross‐listed firm approximately $9 million in direct loan costs over the life of a bank loan. Cross‐sectional analyses show that the effect is more pronounced for borrowers from countries with weaker institutions, borrowers with greater accounting discretion, and for loans arranged by top lenders or loans not secured by collateral. Conversely, the effect is less pronounced for borrowers who use IFRS or when the SEC faces greater budgetary constraints. Enhanced SEC oversight also leads to an increase in loan maturity and a decrease in financial covenants. Our evidence suggests that while the SEC's primary mandate is to protect public equity and bond investors, its supervision yields substantial borrowing cost savings and more lenient nonprice loan terms in the private debt markets as well.

Financial Planning Linen Rental Laundry with RFID Technology in PT. Think Clean Laundry

This research uses qualitative methods. Qualitative methods are scientific approaches aimed at understanding the meaning, interpretation, and context of the phenomena being studied. This approach emphasizes in-depth descriptions, understanding, and analysis that focus on qualitative rather than quantitative aspects. The capital planning of PT. Think Clean Laundry is sourced from 70% company founders, 20% from investors, and 10% from bank loans. Revenue planning for the first year is set at IDR 3,987,000,000, with the Break-Even Point achieved in the first year and the Payback Period in 2 years and 5 months. The result of NPV > 0 indicates that the investment made provides benefits to the company, allowing the project to be carried out. According to the five-year ROI calculation at PT. Think Clean Laundry, the effectiveness of the investment in generating profits relative to the costs incurred was realized in the first year. This indicates that PT. Think Clean Laundry achieved significant profits and is able to continue its investment in the following years. Financial planning to ensure the success of the Linen Rental Laundry business using RFID technology at PT. Think Clean Laundry plays a crucial role in managing the company's financial statements.

BANKING AND BANKING REFORMS IN CHINA IN A MODEL OF COSTLY STATE VERIFICATION

AbstractWe present a macro view of China's financial system where a monopolistic banking sector coexists endogenously with bonds and private loans. In equilibrium smaller firms raise finance from private lending, larger firms through bank loans, and the largest by issuing bonds. The model predicts that expanding credit supply increases bank loans but reduces bond finance and private lending, in absolute terms and relative to total credit. In addition, removing the interest rate ceiling on bank lending—a recent reform in China—induces larger loans and higher lending rates, lowering the share of bank loans in total credit. Empirical evidence is presented to support these predictions.

Adoption of green technology with financial friction

We investigate firms’ incentives to adopt green technology. To cover the adoption costs, a firm needs a bank loan. The bank cannot observe firms’ adoption costs and offers a loan contract that allows it to earn an intermediation margin. The Pigouvian tax leads to optimal abatement but inefficiently low adoption. The first-best outcome is achieved via a combination of environmental tax and loan subsidy. If the regulator is restricted to an environmental tax, it faces a trade-off between optimal adoption and optimal abatement. In this case, the second-best tax rate exceeds the Pigouvian tax rate.

Organised abandonment in Lebanon's Litani River Basin

This paper is a historical political ecology of the organised abandonment of Lebanon's rural margins. It argues that the present ecological catastrophe in the Litani River basin derives from the historical constitution of Lebanon's environmental regulatory apparatus as mediators of flows of capital that generate ecological fragility, or “capitalogenic flows.” In 2021, a massive fish kill brought the Litani River basin's spectacular ecological degradation to global attention. In response, the Litani River Authority (LRA), the Lebanese agency that manages the basin, launched a campaign against “environmental crimes” that concentrated on displacing thousands of Syrian refugees and demolishing their homes. This reflects a rebranding of the LRA, which was founded in 1955 to coordinate a World Bank loan for hydroelectric infrastructure on the Litani. Rather than commodify the water itself for irrigation or drinking—which might entail pollution controls—the Bank monopolised the basin landscape as an energy resource. Prevented from accessing the river, Litani communities have repeatedly reasserted popular sovereignty. The paper situates that history in the context of the institutional formation of Lebanon's environmental regulatory apparatus. Unlike postcolonial countries subjected to neoliberal dispossession after 1980, decades of contested institution-building from Lebanon's origins arrayed the state and its regulatory capacities around capitalogenic flows and the organised abandonment of the country's rural surplus population.

EMERGING TRENDS OF FUNDING SOURCES SMES WITH BIBLIOMETRIC ANALYSIS

The difficulty for SMEs is access to capital, which has been persistently tough; nonetheless, a solution is attainable. The paper presents an extensive bibliometric analysis of research trends and thematic development in funding sources for micro, small, and medium enterprises (SMEs), specifically concentrating on the timeframe from 2013 to 2024. It underscores the growing interest in innovative financing mechanisms such as equity crowdfunding, fintech, and digital finance, which are becoming essential for MSME funding. Traditional funding sources like bank loans and venture capital continue to be pertinent. However, there needs to be a discernible transition towards technology-enabled financing. The research highlights SMEs' difficulties in obtaining financing due to rigorous banking criteria, particularly in Indonesia. It proposes new study avenues centered on emergent subjects such as crowdfunding and the interaction between fintech and regulation. The results underscore the necessity for enhanced finance access and support systems to support SME growth and competitiveness.

Bank-firm common ownership, green credit and enterprise green technology innovation: Evidence from Chinese credit markets

Bank-firm common ownership can tackle the innovation dilemma of bank loans on firms' green development. This paper constructs indicators of common ownership and green technological innovation and then investigates the impact of bank-firm common ownership on corporates' green technological innovation using Chinese A-share listed enterprises samples from 2004 to 2021. Our conducted experiments reveal that bank-firm common ownership shareholders not only make banks and lending firms have the same goal, promote the total level, quantity, and quality of technological innovation for the green development of lending firms, and profit from the firms' short- and long-term market responses. Our findings are prominent in private enterprises, small-capitalization enterprises, and bull market cycles. In addition, we discover that shareholder reduction restrictions and policies restricting corporate shareholding in financial institutions enhance bank-firm common ownership shareholders on corporate green technological innovation development. Common ownership shareholders reduce information asymmetry between banks and lending enterprises and provide green loans to support enterprise green technology innovations. Furthermore, alleviating financing constraints and strengthening the supervisory role are important influence mechanisms. In this regard, carried PSE analysis indicates the direct effect of bank-firm common ownership shareholders to promote enterprise green development of technological innovation accounts for about 14 % of the total effect, the intermediary effect of “financing mechanism” and “supervision mechanism” account for about 82 % and 4 %, and the “financing mechanism” is more important than the “supervision mechanism.” The findings of this paper can optimize the credit market to serve the green and high-quality development of Chinese enterprises better.

Movables as Collateral and Corporate Credit: Loan-Level Evidence from Legal Reforms across Europe

Does pledging movables as collateral alter corporate borrowing? To answer this question, we study the effect of collateral law reforms on syndicated bank loans granted across nine European countries that facilitated pledging movables between 1995 and 2019, comparing them to 19 countries that did not. We differentiate firms in sectors of higher versus lower asset movability to strengthen the identification. We find that although the reforms have enabled firms in movable-intensive sectors to issue more secured loans, the average cost of the loans and the number of covenants have also increased. Channel tests suggest that banks may demand more to compensate for the potential wealth redistribution induced by newly issued secured credit, or the unique risk involved with using movables as collateral.

Environmental credit regulatory policies and bank loans of heavily polluting firms

Environmental credit regulatory policies and bank loans of heavily polluting firms

Do Green Bonds Issue Statistically Significant Effect on the Indebteness’ European Companies’ Performance?

Objectives: The objective of this paper is to analyze the impact of issuing Green Bonds on the financial performance of European energy companies. This paper analyses the indebtedness of 30 European companies in the energy sector and verifies if there is any relationship between the Green Bonds issue and companies’ value between 2015 and 2022. Theoretical Framework: Green Bonds have been increasing their visibility in the financing market, representing an innovative debt instrument, becoming a way of reducing the pressure of bank loans and the associated financial costs. Green Bonds present themselves as an important choice for economic agents, with a positive impact on the financial performance of financed projects expected. We therefore thought it would be interesting to analyze whether green bonds have a statistically significant effect on the debt performance of European energy companies. Method: For this purpose, the Bloomberg database was used, and a sample of bonds from Euronext ESG Bonds. A Pooled OLS and Random model were applied. The software chosen for analyzing the empirical model was R Studio. The Chi-Square independence test and Cramer's V were also applied. Results and Discussion: Results indicate that in the years in which energy companies issued Green Bonds they had a better performance, measured by the ROE indicator. The internal variables TTA, LTA, STA, EAF and GAF are statistically significant in the performance (ROE) of the Energy European Companies. The Chi-Square independence test and Cramer's V degree of association between the debt and DUMMY variable were also applied. The conclusion is that when Green Bonds are issued, indebtedness decreases. Issuing Green Bonds is a more sustainable alternative to traditional sources of finance. There is a lot of research in this area, and it is quite diverse. There are researchers interested in this topic on all continents. In this sense, given the difference in Green Bonds legislation and cultural aspects, it is not always straightforward to carry out a comparative analysis of the results obtained. Research Implications: Green finance has become an important subject for researchers and promotes sustainable economic development. The goal is financing green projects, contributing to mitigation and adaptation to climate changes. Represent a resent an innovative debt instrument. In other words, it is an important choice for economic agents. Originality/Value: It's the first study of the European Union's energy companies that emit Green Bonds. It should be noted that issuing Green Bonds is not only important for environmental and sustainability issues, but also means reducing bank loans, which have high financial costs. More sustainable forms of financing are important for growth and keeping up with the changes the world is going through. Companies must be aware of these new forms of financing as routine bank loans are not always the best way to meet companies' financial needs.

Application of Xgboost Model to Predict Bank Loan

Application of Xgboost Model to Predict Bank Loan

Costs of Adjustment, Portfolio Separation, and the Dynamic Behavior of Bank Loans and Deposits – Revised

AbstractWe revise the solutions of the dynamic optimization model of Elyasiani, Kopecky, and Van Hoose (1995), and show that the optimal policy function for the case of adjustment costs and no portfolio separation is a vector autoregressive model of order 1, and not of order 2. In addition, the empirical approach of Elyasiani, Kopecky, and Van Hoose (1995) is incorrect. The optimal policy functions for the no portfolio separation case have to be estimated with a panel vector autoregression model and not with a simultaneous equation approach. We also describe how the portfolio separation hypothesis can be tested empirically based on the correct policy functions.

DETERMINAN PERTUMBUHAN PENYALURAN KREDIT MODAL KERJA DI BANK KBMI 4 PADA TAHUN 2011-2021

The purpose of this study is to analyze the influence of Non-Performing Loan, third-party funds, Net Interest Margin, and Gross Domestic Product per capita on the growth of working capital loan banks in KBMI category 4 period 2011-2021. This research employs secondary data acquired from banks in the Buku Empat Category between 2011 and 2021. To analyze the data, a panel data regression model was utilized, with eviews13 serving as the research instrument. The findings of this study show that net interest margin and third-party funds have a positive and statistically significant impact on Working Capital Loan growth. Additionally, this study demonstrates that the mandatory reserve requirement (GWM) significantly and negatively impacts Working Capital Loan growth. In contrast, neither the unemployment rate nor the GDP per capita have a substantial impact on KMK growth.

Firms' gender composition, loan collateral, and sustainable finance

This study evaluates gender gaps in the collateral requirements of bank loans using a sample of firms in Latin America. We measure firm-level gender composition through ownership and workforce, both of which are directly related to women's economic empowerment. Additionally, we evaluate the differences in the impacts of firms' gender composition on collateral borrowing between banks that adopt sustainable finance codes of conduct and those that do not. Our empirical findings indicate that female-dominant firms are less likely to be required to provide collateral for their bank loans, and when collateral is required, its value is relatively lower. However, banks adopting sustainable finance codes are not less likely to grant collateral loans to female-dominant firms; in fact, these banks even require greater collateral values from these firms. The implications derived from our empirical findings concern gender inequality in accessing financial credit in developing countries and underscore the need for designing sustainable finance codes that specifically consider and rectify the challenges faced by female-owned firms, especially by firms with a majority female workforce.

The Impact of the Issuance of e-CNY on the Business Strategy of Commercial Banks

This article comprehensively analyzes the issuance background, main features, technical architecture, and the impact on commercial banking operations and regulatory systems of China's Digital Currency Electronic Payment (DCEP or e-CNY). E-CNY is a legal digital currency that has the essential functions of money and a centralized two-tier operating system, making it compatible and stable with the current financial system. The article first outlines the main characteristics of e-CNY, reviews in detail the research and development process and pilot situations since 2014, and demonstrates its application progress in various scenarios. Furthermore, the article delves into the profound impact of e-CNY on commercial banks' deposits, loans, and international operations, suggesting that e-CNY may reduce the deposit base of commercial banks while providing Chinas small and medium-sized enterprises (SMEs) with a lower-cost financing channel, thereby promoting the development of the real economy. On the international front, promoting e-CNY is expected to enhance cross-border payments' efficiency and strengthen CNY's international competitiveness. Subsequent analysis of the practice of China Construction Bank (CCB) in the field of e-CNY showcases how commercial banks adapt to the era of digital currency. It also points out the need for further clarification and improvement of the regulatory framework to ensure the sustainable development of e-CNY. Finally, particular attention is given to the regulatory challenges e-CNY poses, especially regarding anonymity management, personal information protection, and delineating regulatory responsibilities.

Bank loan maturity and corporate investment

This study analyzes bank loan maturity and corporate investment linkage by using novel firm-level data covering the universe of all incorporated firms in Türkiye over the last decade. The results of the panel regression model with multi-dimensional fixed effects reveal that loan maturity has a significant positive association with investment, indicating that longer debt maturity fosters corporate investment. The results reveal that the positive linkage between longer debt maturity and investment is more pronounced for small and medium-sized enterprises (SMEs). This is also the case for young firms and firms with high growth opportunities. Considering the evidence provided in the literature that bank lending conditions, including maturity structure, are highly cyclical and vulnerable to financial conditions and economic policy uncertainties, our findings highlight the importance of reducing the policy uncertainties as well as the importance of policies that make equity financing more attractive and deepen the capital markets.

The impact of climate change on banks loan portfolios and strategies for effective climate risk management

As extreme weather events continue to impact every continent and the world moves towards establishing a lower-carbon economy, the banking industry is expected to incorporate climate risk into their risk management practices. Climate change poses significant risks to bank loan portfolios through increased physical and transition risks. This study systematically analysed the literature to identify effective strategies for managing these risks. Our findings reveal that climate-related events can lead to substantial loan defaults and credit losses. To mitigate these impacts, banks can integrate climate risk into their risk management frameworks, adopt sustainable lending practices, and diversify their portfolios. Some banks have already implemented measures to mitigate climate risk through insurance policies, while others are incorporating sustainability criteria into their lending practices, such as financing green projects. By proactively addressing climate risks, banks can protect their portfolios, enhance financial resilience and contribute to a low-carbon economy.