Loan Collateral Research Articles

ТЕОРЕТИЧНІ АСПЕКТИ ОЦІНКИ В СИСТЕМІ БУХГАЛТЕРСЬКОГО ОБЛІКУ

Enterprises often request the services of valuation expertise and value consulting, and in some cases, conduct it themselves. The purpose of the article is to determine the theoretical aspects of assessment in the accounting system. The task was to determine what the reality of the assessment in accounting is. To determine the value of the actual cost, costing is used a method of calculating the cost, a means of binding the object according to one or another price of a certain assessment. It was concluded that it is very difficult to objectively assess profitability, which leads to a variety of financial assessments, including tax, investment and credit assessments. It has been established that tax assessment is related to the fact that each type of tax or fee usually requires special methods of property assessment for taxation purposes. It was concluded that investment estimates can be used in predictive studies when calculating the efficiency of future capital investments. It is emphasized that credit evaluations are designed to measure the value of collateral for loans. So, valuation as an accounting method, is a way of monetary expression of the objects of this accounting (property, liabilities, business transactions) by means of summarizing costs in order to reflect them in accounting. The reality of the assessment consists in the calculation and display of the true size of certain types of funds, including the sources of their formation (the monetary expression of the accounting objects must correspond to their actual value).

The Political Economy of Chinese Debt and International Monetary Fund Conditionality

Abstract Developing and emerging market economies have increased their debt exposure to China in recent years. Despite its initial promise, many borrowers of Chinese loans face difficulties in meeting these loan obligations. Under what circumstances do Chinese borrowers in debt distress turn to the International Monetary Fund (IMF)? Our starting point is that Chinese loans are tied into projects that promise to generate sufficient revenue to repay these loans. We expect that governments turn to the IMF for bailout funding when a severe shock erodes the value of the underlying loan collateral, requiring mobilizing revenues and implementing austerity measures. Without alternative financing options, the IMF becomes the most viable option to weather financial distress. We expect governments to accept a ‘whatever-it-takes’ number of loan conditions. Using cross-country time-series analysis for up to 162 countries between 2000 and 2018, we show that defaults on Chinese debt trigger IMF programs only when a country experiences a severe adverse shock. Countries tapping the IMF also accept a greater number of loan conditions. From a policy perspective, current financial distress in borrowing countries underscores the urgency to design and deploy targeted governance reform measures beyond program safeguards and loan conditions to mitigate the built-up of macro-financial vulnerabilities, independent of where the money is coming from.

Review of “Grasping for the American Dream: Racial Segregation, Social Mobility, and Homeownership”

In the post-pandemic housing market, the American Dream of homeownership eludes the grasp of many. Although the American homeownership rate soared to 66.6% between 2019 and 2020, the historic peak of 69% in 2004 was never regained. The 2009 foreclosure crisis reminds us that buying a home entails risks. American homeowners hold most of their assets in their primary residence, but the Survey of Consumer Finances shows, this is especially true for Black (74%) and Hispanic (80%) households compared with non-Hispanic Whites (57%). At the end of 2020, the Census reports, 44.1% of Black Americans owned their homes, compared with 74.5% of White Americans. Melvin Oliver, William Darity, Dorothy A. Brown, and others point to the ways credit, real estate, tax, and other discriminatory practices contributed to the racial wealth gap, depriving African Americans of an asset that provides an inheritance, collateral for college and other loans, or security for one’s family during crises in America’s underdeveloped welfare state. Freddie Mac estimates that 14.2 percent of all Black renter households could afford a median-priced home in April 2021, but just 6.9 percent could do so one year later.

Tenure security and property rights: the case of land titling for ‘slum’ dwellers in Odisha, India

ABSTRACT India continues to urbanise rapidly tinged with sub-standard living conditions of a growing ‘slum’ population. Improving the living conditions of slum-dwellers remains a gargantuan and intractable challenge requiring solutions at scale grounded on households’ real experience of the process. The State of Odisha, in Eastern India, is currently implementing a state-wide land-titling initiative to improve the tenure security of a million slum-dwellers through legal, institutional, and technical innovations based on the Odisha Land Rights to Slum-dwellersAct 2017 (OLRSD). Given the known negative consequences of titling that grants ‘full property rights’, such as the speculative sale of the titles, the facilitation of elite capture,and disruption of community life and social networks, the OLRSD has fashioned the title as a ‘limited instrument’ that still assures the possibility to inherit and aims at facilitating mortgage for housing-backed lending. The paper discusses early learnings from Odisha’s ‘intermediate’ aspects of its titling policy in nine settlements researched across three districts. As per people’s accounts of their experienced reality, the titling, complemented by slum upgrading, has already facilitated improvements in the housing conditions of households subject to extreme poverty. However, concomitant challenges are surfacing for instance, although the OLRSD formally permits the titles to be used as collateral for housing loans, the non-acceptance of the title by mainstream banks forces the recipients to borrow from spurious private lenders, thus increasing their vulnerability. Understanding such and related challenges is relevant for better addressing the dimension of de jure land tenure security in slums at scale across India.

Die Zukunft der Markenrechte als Sicherheit im Kreditgeschäft

Legal framework conditions in German-speaking countries make it possible for trademark rights to be taken into account as loan collateral or used as security for a pledge. Despite the generally growing and proven importance of intangible assets as entrepreneurial success factors and their often high value shares in corporate acquisitions (purchase price allocations), intangible assets are rarely used as loan collateral. This article discusses strategic options for capitalizing the brand and presents examples of the instrument of brand pledging. Finally, a theory-based evaluation of how the brand can be assessed as a possible collateral instrument in the credit industry, especially in the credit risk process, follows.

КРЕДИТИ БАНКІВСЬКОЇ УСТАНОВИ ТА ЛОМБАРДУ: ПОРІВНЯЛЬНА ОЦІНКА МЕХАНІЗМІВ

The article establishes that loans from banking institutions and pawnshops have the same economic meaning, represented by a two-way form of movement of loan capital based on the principles of payment and reciprocity, which is based on trust in the borrower, confirmed by additional sources of securing loan repayment. It is shown that the institutional status of a banking institution and a pawnshop differs. They belong to financial institutions, but a bank is a financial intermediary, while a pawnshop is not. A comparative characterization of loans from banks and pawnshops was conducted, their common and distinctive features were revealed. Common features include the performance of creditor functions in accordance with concluded contracts, the structure of assets, represented by income items. Differential differences are summarized, which boil down to the following: banking institutions issue loans at the expense of attracted deposits, therefore the specific weight of equity capital in the liabilities of their balance sheet is low, and the main share of it falls on customers' funds. Interest rates on loans issued by pawn shops are higher compared to banking institutions, and the process of setting the rate on bank loans is much more complicated. Banking institutions serve a wider range of clients, represented by legal entities and individuals, while pawnshops serve mainly individuals. If banking institutions issue loans of different durations, then pawnshops concentrate on issuing short-term property-secured loans. A pawnshop, unlike a banking institution, does not form reserves for credit risks. Banks, unlike pawn shops, have a higher level of credit risk and a more complex system of credit control. The subject-matter condition of collateral for banking institutions is not limited, the collateral for pawnshop loans is mainly products made of precious metals and precious stones. The maximum amount of the loan of the pawnshop is limited by the value of the subject of the institution, and for the banking institution - by the amount of credit risks and the requirements for compliance with mandatory economic standards. Recommendations for improving the credit activity of banking institutions and pawnshops have been developed.

Assessment of Credit Risk in the Second-Tier Banks of the Republic of Kazakhstan

Credit risk is the possibility of potential losses due to the inability of borrowers to timely fulfill their obligations to the bank to pay the principal amount of the debt and accrued interest. Credit risk assessment is an integral step in the risk management of a banking institution, since the main source of income for banks is the provision of loans. That is why the determination of the maximum possible losses in case of default by the borrower, as well as the timely assessment of collateral for loans, allow banks to minimize possible credit losses.

Establishment and Operation of Private Land Credit Institutions in Penza Province in the Late 1860s – mid 1880s

Introduction. The abolition of public credit institutions in the first half of the 19th century meant that following after the peasant reform, private landowners were forced to rely entirely on their ability to conduct economic activities, they desperately needed the money demanded for the capitalist modernization of their estates. It was important under such circumstances the appearance in the mid-1860s of private land banks that have granted land collateral loans. Materials and Methods. The study of the claimed problem required the involvement of a number of historical and economic methods: historical, statistical and quantitative. At the same time, the question of the amount of debt owed to private land banks was examined on the basis of a comprehensive analysis of statistical data on land credit published by a committee of congresses of representatives of Russian land credit institutions. Results. The article analyzes the main indicators of the activity of the joint-stock land banks in the first two decades of their operation, considers the characteristics of the establishment and development of the private land credit system, the volume of loans issued, the size of the mortgaged land, the amount of the loans are shown by their regional characteristics. Discussion and Conclusions. Set up in mid-nineteenth century the system of equity land credit, which focuses on the granting of land mortgages by private landowners, has played an important role in the processes of land ownership mobilization and the development of capitalism in the agricultural sector. Private credit institutions were one of the most important components of the land credit system, and the activities of these institutions in the territory of the governorate in question resulted in: that almost a quarter of all privately owned land had been deposited in them.

Linkages between share pledging, stock price risk and profitability: Evidence from the P.R. China.

Share pledging has become popular as a method of loan collateral among Chinese shareholders. Our research used a sample of Chinese listed firms between 2008–2018 and produced two main findings. Firstly, we found a negative association between stock price risk and firm profitability. Our second finding was that the interaction effect of share pledging and stock price risk is greater on firm profitability than the effect of stock price risk itself. We examined the role of share pledging by modeling pooled OLS and fixed effects using share pledging behavior, controlling shareholders’ share pledging and the share pledging ratio to reinforce the robustness of our results. Furthermore, we investigated the Davis Double Play effect of share pledging to analyze how share pledging affects stock price risk. We found that higher EPS and investor expectations cannot mitigate the positive impact of share pledging on stock price risk. That is, the reduction of EPS and the deterioration of investor expectations caused by share pledging risk will not further aggravate the stock price risk, as shareholders may have taken some managerial actions to affect the transmission mechanism.

Art as Collateral

High market values and the recognition of its investment potential have made art a source of collateral for loans. Firms specializing in art lending have emerged to serve this market. This study explores the effect of regional variations in economic and financial conditions on art-backed lending activities. The authors show that demand for art loans increases when the economy experiences a downturn and liquidity needs are high. They compare the demand for art-secured loans with home equity loans and test a pecking order theory for the borrowing of high-net-worth individuals. The findings suggest that art as substitute collateral is increasingly used when home equity loans are difficult to obtain. <b>Key Findings</b> ▪ With the expansion of the high-end market for art and increased attention to its economic value in recent years, art has become an asset that can serve as loan collateral. The Uniform Commercial Code, under which debtors retain possession while creditors can register their security interest in the collateral, may also facilitate some of the art-backed lending in the United States. ▪ Using various regional economic performance measures, this study shows that some collectors borrow when the economy does not perform well. This supports the hypothesis that art may serve, in certain circumstances, as emergency collateral to smooth adverse economic shocks. ▪ Art is used as collateral when home equity loans are difficult to obtain and when housing prices decline. This is also consistent with the hypothesis that collectors borrow from nonbank creditors in times of financial distress to meet liquidity needs.

Does the value‐added tax Reform increase a firm’s collateral bank loans? Evidence from China

AbstractBy leveraging the value‐added tax (VAT) Reform as an exogenous event in China, we examine the impact of the tax cut on bank collateral loan on firms. Our findings suggest that (1) The Reform allows firms to deduct the tax of purchasing fixed assets that leads to a significant increase in the firm's collateral loan amounts. (2) The transmission mechanism is due to the increased level of corporate transparency and a lowered financial risk after the Reform. (3) The impact of the Reform on collateral bank loans is more pronounced for state‐owned firms, large firms, firms far away from lenders and firms located in low financial development regions.

Pengaruh tata kelola perusahaan, kualitas audit, dan konservatisme terhadap persyaratan agunan pinjaman

Debtors and creditors have equal access to information about default risks in competitive credit markets. Loan collateral is less important in credit decision-making in these circumstances. However, in emerging credit markets such as Indonesia, where debtors and creditors do not have equal information about a firm's prospects, the use of collateral to mitigate default risk has become common practice. Despite the strong theoretical framework for the use of collateral to secure creditors from credit risk, some Indonesian firms are exempt from providing collateral for bank debts. This study looks at how the independence of the Board of Commissioners, governance committees, audit quality, and conservatism affect the likelihood of using debt collateral. Around 785 firms listed on the Indonesia Stock Exchange were collected using Slovin's formula, during the sample period of 2017-2020. According to logistic regression analysis, firms with a more independent Board of Commissioners, a separate governance committee, Big 4 auditors, and conservative accounting policies are less likely to provide loan collateral

Kedudukan Asset Yayasan Yang Dijadikan Jaminan Dalam Permohonan Kredit Bank

The Foundation is a nonprofit organization incorporated under Article 1 paragraph 1 of Law No. 28 of 2004 on the amendment of Law 16 of 2001 on the Foundation. To be able to support in order to achieve his aim, the Foundation permitted to establish a legal entity and or participate in a business entity. This research is a descriptive analytical, research that provides data or description of the object of the research issues that are not intended to test the theory, but in the limit to explain the variable research on lending by banks to the foundation. In this research will be described regarding the granting of credit by banks to the foundation principles associated with healthy credit. The researches will provides answer that i t can be seen that the intended use of foundation assets as collateral for the loan is membngun, expand, improve infrastructure facilities aimed at social, religious and humanitarian such as education and hospitals. If the foundations are in default or injury promises in the implementation of the payment and repayment of debt, the bank will carry out the execution of the foundation's assets used as loan collateral. The process of execution of loan guarantees its implementation in accordance with applicable laws similar position with the firm, CV, limited liability company and Cooperatives. In the execution of the foundation assets in case of default of payment execution carried out such a sum of money to the court decision binding. Execution starts with ends with auction rebukes and mortgage-burdened. After the auction the collateral objects and auction proceeds handed over to the lender, then the burden of mortgage objects will be handed over to the buyer diroya and auctions are clean and free of all expenses.

Firm age and loan financing with patents as collateral of Chinese startups: the roles of innovations and experience

ABSTRACT This article examines how startups obtain loan financing through pledged patents as the startup’s age increases. By using a panel dataset containing 31,083 Chinese startups and 88,264 patents of invention from 2006 to 2015, we test and verify an inverted U-shaped relationship between the age of startups and their patent pledges, and there is an optimal age for patent collateral financing. Younger startups do not find it easy to obtain patent pledge financing, while older startups do not rely on this financing channel. We further verify that firm innovation capabilities and pledge experience can optimize the inverted U-shaped relationship between firm age and their likelihood of obtaining patent pledge financing by accelerating startups’ success in obtaining financing and steepening the curve. However, the optimization mechanism behind them is different. Specifically, the patent scale or innovative competitiveness of startups exhibits enterprise quality information to the lenders, while pledge experience is mainly beneficial to the transmission of soft information between the borrowers and lenders. Thus, we advance the research on startups’ using patents as loan collateral by emphasizing the temporal dimension of pledges and their interplay with innovation and experience at the firm level in emerging economics.

Leakages from Macroprudential Regulations: The Case of Household-Specific Tools and Corporate Credit

Sector-specific macroprudential regulations increase the riskiness of credit to other sectors. Using firm-level data, this paper computed the measures of the riskiness of corporate credit allocation for 29 advanced and emerging economies. Consistently across these measures, the paper finds that during credit expansions, an unexpected tightening of household-specific macroprudential tools is followed by a rise in riskier corporate lending. Quantitatively, such unexpected tightening during a period of rapid credit growth increases the riskiness of corporate credit by around 10 percent of the historical standard deviation. This result supports early policy interventions when credit vulnerabilities are still low, since sectoral leakages will be less important at this stage. Further evidence from bank lending standards surveys suggests that the leakage effects are stronger for larger firms compared to SMEs, consistent with recent evidence on the use of personal real estate as loan collateral by small firms.

Customer Information Disclosure and Collateral Loan: Evidence from Chinese Listed Companies

ABSTRACT How supply chain information can help a company is given considerable attention by academic and practical circles. As boosting in the Chinese capital market, there is a higher demand for loans. Our study uses 2007–2017 Chinese listed company data to study whether information about major customers affecting the company’s reliance on collateral loan, which reflects the incremental value for banks assessing credit risks. The results found that the detailed customer information disclosed by the company can send positive signals to the bank of a high-quality information environment and reduce its dependence on collateral loans. While customer concentration is one of the credit risk factors for banks, which increases the company’s dependence on collateral loans instead. Further research found that a benign customer relationship can alleviate the risk effect brought by customer concentration.

A decision tree classifier for credit assessment problems in big data environments

Financial institutions have long sought to reduce the risk of consumer loans by improving their credit assessment methods. As new information and network technologies enable massive data collections from many different sources, credit assessment has become a challenge in the big data environment. Complicated processing is required to deal with vast, messy data sources and ever-changing loan regulations. This study proposes a decision tree credit assessment approach (DTCAA) to solve the credit assessment problem in a big data environment. Decision tree models offer good interpretability and easily understood rules, with competitive performance capabilities. In addition, DTCAA features various data consolidation methods to eliminate some of the noise in raw data and facilitate the construction of decision tree. By using a large volume data set from one of the biggest car collateral loan companies in Taiwan, this study verifies the efficiency and validity of DTCAA. The results indicate that DTCAA is competitive in various situations and across multiple factors, in support of the applicability of DTCAA to credit assessment practices.

ОПТИМІЗАЦІЯ КРЕДИТНОГО РИЗИКУ З ПОЗИЦІЇ ЗАХИСТУ БАНКІВСЬКОЇ УСТАНОВИ: ТЕОРЕТИЧНІ ТА ПРИКЛАДНІ ЗАСАДИ

The implementation of effective banking activities helps to maximize the profits of the banking institution, because it is due to credit operations that the main part of the profits coming to the reserve funds is formed, as well as directed to the payment of dividends to the bank's shareholders. Therefore, minimizing credit risk and solving the problem of non-performing loans are one of the key priorities in developing a banking business strategy. Credit risk is the risk that a borrower will default on its principal debt and interest on its use. Credit risk management (its minimization) is carried out by means of the following measures: credit limitation; diversification of the bank's loan portfolio; control over the use of credit and efficiency in debt collection; credit insurance; sufficient and high-quality collateral for loans; analysis of the borrower's creditworthiness. The share of non-performing loans (NPLs) in Ukraine was 48.4% at the beginning of 2020. It has remained extremely high in recent years, although it has been gradually declining since 2018. The high share of NPLs is the result of credit expansion in previous years, when borrowers 'solvency standards were low and creditors' rights were insufficiently protected. Another important reason is the practice of lending to related parties who stopped servicing loans during the crisis. Today, all non-performing loans are recognized by banks, the level of coverage of their reserves is constantly growing and is approximately 95%. Strategy formation regulation and minimization of credit risk in scale government (at the macro level) is necessary to achieve financial stability of the banking sector. The purpose of the strategy is to regulate and minimize credit risk at the bank level (at the micro level) should be in the location optimal ratio between profitability, risk and liquidity of the bank's credit operations. This article analyses the state of bank lending in Ukraine and develops a method of optimizing credit risk in terms of protecting a banking institution. The distribution of credit risk of Oschadbank JSC and the level of non-performing loans of the bank are analysed. Recommendations for the protection of a banking institution in terms of optimizing the existing credit risk are given.

РОССИЙСКИЙ РЫНОК ИПОТЕЧНОГО КРЕДИТОВАНИЯ И РЕЕСТРЫ ИПОТЕЧНОГО ПОКРЫТИЯ ОБЛИГАЦИЙ С ПОРУЧИТЕЛЬСТВОМ ИПОТЕЧНОГО АГЕНТСТВА ДОМ.РФ

The article examines the main trends in the development of the Russian mortgage market and the market of mortgage-backed securities (MBS) associated with government incentive measures. We consider the importance of the registers of mortgage collateral of MBS for the assessment of various risks arising when working with these securities. We analyze the quantitative aspect of mortgage loans in collateral pools for issues covered by the guarantee of the mortgage agency DOM.RF. The analysis of pools includes the aspects of time to maturity, yield, difficultness of the collateral loans and the changes in the Loan/Value ratio. We propose the directions for the development of models for predicting the prepayment levels for mortgage collateral pools.

Influence of Land Collateral Loans on the Polarization of Farmers in the First Half of the Meiji Era

Influence of Land Collateral Loans on the Polarization of Farmers in the First Half of the Meiji Era