Credit Ceilings Research Articles

Multinomial Logit Modeling of Financial Inclusion and Financial Literacy of Women MSMEs in Tangerang

This research will examine the determinants of financial literacy and inclusion using sociodemographic variables of women MSMEs in Tangerang. The sociodemographic variables used are education, age, length of business, turnover, source of financing, type of savings, type of credit, credit ceiling, financial literacy score (OJK) and financial inclusion score (OJK). In Indonesia, there has been a lot of research on socio-demographic factors as determinants of financial literacy with mixed and unsatisfactory results, making it less reliable as a research reference. Some of the errors in previous research were that the respondents were not precise enough, for example only students or MSMEs at random. These two things result in the results of entering sociodemographic data being less reliable and ineffective when tested with categorical equation models from the simplest, namely logit, probit and tobit as well as binary logistic to the most complex models such as multinomial logit. Logit, probit and tobit and binary logistics models generally only use two categories of dependent variables, namely 0 if there is no decision or certain condition and 1 if there is a certain decision or condition. Preliminary research data before the Covid 19 pandemic, namely 150 women MSMEs who had unique characteristics in terms of socio-demographic factors as well as levels of literacy and financial inclusion, can be tried to prove empirically that these three variables will play an important role in each other through the multinomial logit categorical equation model according to Bayar et research procedures. al. (2020). The important result to be achieved is that the researcher wants to prove the business potential of women MSME actors in Tangerang, which so far has not been exposed enough to BI UMKM as one of the common market places for all MSME actors in Indonesia. There is a stigma that the low literacy and financial inclusion (OJK) scores of MSME players are a negative effect of less exposure to the business potential of MSME players in the local area. The results of this research succeeded in describing the socio-demographic profile of female MSMEs in Tangerang with several distinctive characteristics, namely the predominance of those with a productive age of 40 - 55 years, the majority having a tertiary education; have a turnover of more than 10-25 million per month and most of them use access to bank and non-bank financial institutions, usually pawnshops, for storage purposes and credit applications. Furthermore, this research succeeded in proposing a categorical equation model with multinomial logistic regression using STATA 13.0 software referring to the research model from Bayar et.al. (2020) and managed to find that socio-demographic variables of financial institutions are always a determining factor in financial inclusion and literacy. The implication is that individual women MSME actors in Tangerang can make financial decisions more quickly considering that they are so close to access to existing financial institutions.

OPTIMALISASI ALGORITMA C4.5 TERHADAP METODE DECISION TREE DALAM MENENTUKAN PLAFON KREDIT NASABAH

The most basic banking activity is collecting money and buying money from the whole society. Then sell the collected money by directing it to the community through credit or credit. However, it is often found that customers are unable to pay their receivables based on the amount of receivables which often exceeds the specified payment period. Therefore, banking companies must know the ability to pay customers by providing credit limits to avoid losses. The purpose of this study was to analyze the data using the Decision Tree method with the C4.5 Algorithm on the report data of BPR Pijer Podi Kekelengen receivables in order to determine the customer's credit ceiling. From the data obtained from the accounts receivable report, the company produces 5 attributes, namely Payments, Receivables, Transactions, Recommendations, and Ceiling where the decision label is Ceiling. After testing the report data at BPR Pijer Podi Kekelengen using the Decision Tree method with the C4.5 Algorithm, it is concluded that if the ceiling is large, the payment is not good.

Impact of Financial Liberalisation and Deregulation on Banking Sector in Pakistan

The paper analyses the market perception about the performance of Pakistani commercial banks in the wake of financial liberalisation and deregulation measures taken by the central bank over the last two decades. For this purpose, it uses the Survey approach. Out of 35 commercial banks, 15 banks have been chosen for analysis purposes. The paper mainly finds that key banking reforms have helped in removing the flaws in the banking sector of Pakistan. In particular, privatisation of banks, the deregulation and institutional strengthening measures, switching towards market-based monetary and credit management systems were instrumental in streamling banking operations. Similarly, the removal of restrictions on entry of private banks and operational restrictions on foreign banks also significantly contributed to the provision of quality banking services. The resultant competitive environment is the key factor behind improved efficiency of banks in Pakistan. The banks devised a number of strategies to respond to the competitive market conditions in the country. However, they faced various constraints in this regard, especially lack of managerial skills, and in hiring IT professionals, etc. As a part of future strategy, banks are likely to form more strategic alliances with foreign banks and undertake the expansion of business through widening of branch network. Despite a number of successful stories on different fronts, the central bank could not succeed in narrowing down the banking spread which is one of the key measures of banking performance. High domestic inflation, large non performing loans (NPLs) of banks, high administrative expenses, larger intermediation costs, and poor debt recovery are identified as important factors behind widening of banking spread. 1. INTRODUCTION The banking sector of an economy generally performs three primary functions: the facilitation of payment system, mobilisation of savings, and allocation of funds to stakeholders like government, investors, consumers, and business community who can utilise them for generation of economic activities.1 By virtue of its pivotal role, the banking sector can exert its positive influence on various segments of an economy. This gives it a privileged position among other sectors. In view of its significant role, economic managers always endeavour to devise such policies which could help provide the sector a level-playing field, thereby enabling it to operate on sound, efficient, and competitive footings. As in other emerging market economies, banks have been playing an important role in Pakistan also. However, the financial landscape of the country changed significantly in the 1970s with the nationalisation of Pakistani commercial banks. The Government also took various regressive steps, which included, among others, the initiation of subsidised bank credit schemes, the introduction of a complex system of credit ceilings, and imposition of controls on interest rates.3 These policy measures severely affected the efficiency of the banks. By the end of the 1980s, it was felt that Pakistan’s banking sector was not able to meet adequately the financial needs of the country

Credit Analysis at the Regional Office of the Director General of State Treasury for Bangka Belitung Province

The MSME sector (Micro, Small and Medium Enterprises) is one of the backbones of the Indonesian economy. But its existence is still experiencing various obstacles. The government is present to provide support for the MSME program through the allocation of the APBN (State Revenue and Expenditure Budget) and APBD (Regional Revenue and Expenditure Budget). In the 2022 State Budget, the Province of Kep. Bangka Belitung received an allocation of IDR 13.47 billion for the Economic Recovery cluster. Meanwhile, the APBD allocation is IDR 8.19 billion, divided into two programs, namely MSME Empowerment and MSME Development worth IDR 6.5 billion and IDR 1.69 billion. The results of the 2022 credit analysis at the Regional Office of the Director General of Treasury of the Bangka Belitung Province in order to increase MSME empowerment found that the characteristics of MSMEs in the Kep Province area. Bangka Belitung is dominated by micro-scale businesses, reaching 97.96 percent or 186,101 business actors. Bangka Belitung MSMEs have not fully optimized financing facilities. The achievement of MSME financing is lower than non-MSMEs financing. MSME actors in 2022 will only access financing with a total credit of IDR 6 trillion from the total credit ceiling of commercial banks of IDR 14.3 trillion. Even the proportion of KUR/UMi debtors to Bangka Belitung MSMEs is only 21.68 percent.

Analysis of SMEs Empowerment in Bangka Belitung Islands Province in 2023

The Small and Medium-sized Enterprises (SMEs) sector is one of the backbones of the Indonesian economy, but it still faces various obstacles. The government aims to support SMEs through allocated funds. In the 2022 State Budget, Bangka Belitung Islands Province received an allocation of IDR 13.47 billion for the Economic Recovery cluster. Additionally, the Local Budget allocation of IDR 8.19 billion was divided into two programs: SMEs Empowerment (IDR 6.5 billion) and SMEs Development (IDR 1.69 billion). Among the SMEs, the largest sectors are Agriculture, Forestry, and Fisheries. However, SMEs in Bangka Belitung Islands Province have not fully optimized financing facilities, with only IDR 6 trillion accessed from the total credit ceiling of IDR 14.3 trillion offered by commercial banks. The proportion of People’s Business Credit/Ultra Micro Debtors to Bangka Belitung Islands Province SMEs is only 21.68 percent. Focused Group Discussions (FGDs) and surveys were conducted involving 42 SME actors to research the situation in Bangka Belitung Islands Province. The survey results highlighted that the availability of capital and limited access to marketing are the most significant obstacles for SMEs in the area. Furthermore, other challenges include inadequate technology/machinery, qualified human resources, training opportunities from relevant parties, and difficulties in obtaining raw materials. The survey also revealed that SME actors expect training in technical guidance and offline course classes, moving away from mere socialization methods.

The Aftermath of Credit Booms: Evidence from Credit Ceiling Removals

The Aftermath of Credit Booms: Evidence from Credit Ceiling Removals

Credit and Financial Access in Nepalese Agriculture: Prospects and Challenges

The credit and financial access are urgent needs for agricultural development. This paper has attempted to find out present status of agricultural credit and their prevalent challenges and problems. The study is fully based on the statistical data, reports and findings of MoALD, MoF, NPC, NRB, and other relevant publications. The Government has targeted to expand agricultural credit through banking and financial institutions (BFIs) by implementing several acts, policies, strategies and programs through NRB, MoALD and MoF. However, constraints like credit ceiling, high value collateral demand, limited redemption facilities, limited agriculture insurance, financial illiteracy, lack of farmer friendly technologies, and poor monitoring and regulation of BFIs are responsible for lower credit expansion. Thus to promote and motivate BFIs and farmers to invest in agriculture, government need to address these challenges. The study also suggests to segregate farmer according to demand of credit volume and expand the branchless banking.

Electrification decisions of traditional automakers under the dual-credit policy regime

The newly introduced dual-credit policy has made electrification inevitable for traditional automakers. This study considers stochastic credit prices and time-dependent electric vehicle (EV) investment costs to present a novel optimal decision model with three indicators: investment timing, research and development intensity, and product line allocation. This combinatorial optimization problem is solved by developing a genetic algorithm. The simulation result shows that the high profitability of EVs can accelerate electrification, while rapid credit price increases may instead d[1]elay it. Meanwhile, the Corporate Average Fuel Consumption (CFAC) credit rules outperform the New Energy Vehicle (NEV) credit rules in facilitating electrification and driving long-term cumulative EV productions. Interestingly, despite the pressure these rules bring, tightening them is not necessarily beneficial for boosting electrification. Overall, introducing credit ceiling and floor prices, or coordinating policy parameters by steadily tightening CAFC rules while appropriately moderating NEV rules, would effectively accelerate electrification and promote EV productions.

Pengaruh Customer Relationship Management (CRM) Terhadap Kepuasan Nasabah Pinjaman Pada PT. Bank Pembangunan Daerah Sumatera Barat Cabang Painan

Fast traslate Icon translate The purpose of this study was to analyze the influence of commitment, communication, and service quality on loan customer satisfaction at PT. Bank Pembangunan Daerah Sumatera Barat Cabang Painan. To achieve customer satisfaction PT. Bank Pembangunan Daerah Sumatera Barat Cabang Painan makes it easy for customers to make loans to personal loans which is one type of credit that is in great demand of the public. This is because the procedure is easier, namely the credit ceiling taken based on multiplying the employee's net salary with the provisions with the bank. The population in this study were all loan customers at PT. PT. Bank Pembangunan Daerah Sumatera Barat Cabang Painan totaling 4,985 people. The sampling technique used was random sampling, while the number of samples used for analysis was 100 people. Data analysis techniques used to test hypotheses are multiple linear regression. The hypothesis testing uses statistical T test. The results of the study show that the commitment variable does not have an influence on the satisfaction of loan customers at PT. Bank Pembangunan Daerah Sumatera Barat Cabang Painan. While communication and service quality variables have a significant influence on loan customer satisfaction at PT. Bank Pembangunan Daerah Sumatera Barat Cabang Painan. Keywords: Commitment, Communication, Service quality, and customer satisfaction

A Comparative Analysis of DSN-MUI Fatwas Regarding Murabahah Contract and the Real Context Application (A study at Islamic Banking in Aceh)

The National Sharia Council-Indonesian Ulama Council (DSN-MUI) has issued 11 fatwas (a formal ruling on a point of Islamic law) related to murabahah for parties in economic transactions. However, in the initial study, several indications of the dissonance between the clauses in the fatwa and the practice of Islamic banking were found. This study aims to analyze the application of murabahah contracts in Islamic banking in Aceh. Several Fatwas declared by the National Sharia Council - Indonesian Ulama Council (DSN-MUI) that are related to murabahah were used as an analytical tool to assess the shariah value of the contract in financing practice at Islamic banking in Aceh. This study used a descriptive qualitative method, particularly, a critical study approach. Data were collected using: 1) interviews with bank employees and customers, 2) participant observation in which researchers were directly involved in the process of financing application at several Islamic banks, and 3) documentation studies of resources related to the fatwas. The results showed that the practice of murabahah financing conducted by Islamic banking in Aceh was not fully in accordance with the fatwas stipulated by the DSN-MUI. The results of the analysis showed that the discrepancy lies in the following matters such as ownership of goods, 'coercion' in the use of murabahah contracts, and the inappropriate use of 'wakalah'or contract assistant. The study also revealed that the practice of murabahah in this method has both positive and negative economic implications for banking customers and the banks, especially with regards to profits, calculations of credit ceiling, and customers’ image and trust.

KEBIJAKAN MONETER DALAM EKONOMI ISLAM

The monetary management of conventional economy which revolves around bank interest uses multiplier money rather than high powered money. Consequently, its instrument of monetary policies tends to the utility of open market operation and change of discount rate. Both instruments cannot be applied in an Islamic monetary system which is free from interest whose monetary management relies on controlling high powered money by applying profit and loss sharing and financial intermediation. Therefore, Islamic monetary system can employ alternative instruments of monetary policy such as quantitative control of credit allocation and realization of socio-economic objectives. The first instrument is backed up with monetary instruments such as statutory reserve requirement, credit ceiling, government deposits, common pool, moral suasion, equity-base instrument. Whereas the second instruments include some monetary instruments such as treating the created money as fai’ and goal oriented allocation of credit.

Impact of Covid-19 on Interest Rates

The global economy is experiencing a crisis due to the Covid-19 pandemic, the stock market index has collapsed. The rupiah exchange rate against the USA dollar weakened this was due to the large number of foreign investors leaving the Indonesian financial market, the stock market plummeted. The banking sector can carry out an economic stimulus given restructuring authority for all credit or financing without requiring restrictions on the credit ceiling or type of debtor, especially debtors for MSMEs and informal workers. The economic stimulus that needs to be maximized is prundential monetary and macro policies through lowering interest rates and maintaining stability in the rupiah exchange rate. Budget relocation is also enforced to maintain the availability of basic foodstuffs for the community, which has increased due to panic buying or market panic. Also providing assistance to increase people's purchasing power.

Access to Formal Credit of Indonesian SME : Study of SMEs in Sidoarjo

The aim of this study was to get a big picture of formal credit accessibility on Small Medium Enterprise (SME) in Sidoarjo. The sampling method used a purposive sampling, while the data was collected by distributing questionnaires (online and offline) from April 2 nd - 30 th 2018 from 100 respondent, who have access to credit at a formal financial institution. The study shows that the description of formal credit access in SMEs in Sidoarjo shows that it was classified as “easy”. In general, applying for a credit at formal credit providers is quite easy for SMEs in Sidoarjo. But not all of SMEs have the same experience of accessing credit in an easy way, especially to increase the credit ceiling. There are still many SMEs were classified as a Microbusiness scale, which many SMEs still have a constraint that makes them cannot access credit easily. There is a large gap between SMEs that can access credit 1-2 times with SMEs that can access credit more than 10 times. This means that SMEs actually have access to formal credit, but not all SMEs have the same opportunity to access credit many times. The frequency of accessing credit is considered to be able to help business growth. This is in accordance with the existing facts, that at this time the availability of credit for microbusinesses has increased, such as KUR (People's Business Credit). This certainly can make it easier for SMEs to access credit.

Empirical evaluation of ‘structure-conduct-performance’ and ‘efficient-structure’ paradigms in banking sector of Pakistan

ABSTRACTHistorically, the banking sector of Pakistan has been characterized by credit ceilings, directed and subsidized credit, controlled interest rates and lacking competition. This scenario prevailed till the financial sector reforms in 1990. However, after 1990, the banking sector changed significantly and the reforms led to notable improvement in the indicators of market structure of the banking industry of the country. In literature, the changes in indicators of market structure are interpreted in the context of either structure-conduct-performance (SCP) or relative market power (RMP) paradigm, and/or in relation to the efficient structure (ES) hypothesis. This paper studies relevance of SCP, RMP and ES paradigms for banking industry of Pakistan. This study uses (balanced) panel data, spanning 1996 to 2015, of 24 commercial banks to estimate banks’ profit function by using fixed effects model. Findings suggest that: (a) there is a weak association between the indicators of market structure and banks’ performance; (b) there is no empirical evidence to support SCP or RMP paradigms; and (c) the ES paradigm is relevant in the case of banking sector of Pakistan. Thus, the focus of policymakers should be to improve the efficiency of the banking sector in Pakistan. Focus on improving indicators of market structure, like concentration ratios, to encourage competition in the banking sector may not be productive.

An Outline of Loans’ Trend in Albania

The early 2000`s epitomized very low levels of loans in Albania. The combination of imposition of stringent credit ceilings and the high and rising number of non-performing loans caused the commercial banks to have difficulties to meet the soaring demand for credit. Bank of Albania imposed low credit ceilings, artificially lowering the ability of the banks to provide loans despite having healthy deposit reserves. In 2001 the situation changed dramatically however, as a result of the administrative decision to transfer the bad loans from the Savings Bank to the Loan Handling Agency. This led to a changed financial picture overnight and a greatly improved NPL situation, by wiping out most of them as far as the banking sector was concerned. The Albanian economy had a boom in credit growth particularly after 2004, especially in foreign currency lending. It still remained less than what it should have been, due to low ratio of loans, compared to deposits level. The credit crisis of 2008 saw a decrease in lending, and 2009 saw an even greater deterioration. Nowadays supply has tightened, with banks making it more difficult to request loans, and the demand has decreased as well, with businesses reluctant to take on risky investments, indicating a lack of confidence in the Albanian economy and uncertainty about the future, especially in sectors such as construction, that are regarded as highly important to the overall performance of the economy. DOI: 10.5901/ajis.2016.v5n3s1p40

A Comparison of the Long Term Interdependence of Southeast Asian Equity Markets

(ProQuest: ... denotes formulae omitted.)I. IntroductionThe precipitous fall of stock market indexes of the major South and East Asian economies which happened in late 1997 inspired researchers to investigate the 'interdependence' and 'contagion' debacle across the region. Controversial arguments that emphasize strong market linkage between markets do so simply for the fact that there are co-movement of markets and risks are generally country-specific (Daly, 2003). The reinforcement of the notion of international diversification that defines the primary motivation for risk-averse investors, drawn by 'portfolio rebalancing', is a critical tenet of the much studied 'Efficient market hypothesis. In contrast to the investor's desire for a relatively low correlation, contagion effect causes the crisis spill over to markets with relatively little or no 'economic linkage'. The presence of the 'contagion' undermines much of the rationale of 'portfolio rebalancing' (Islam et al., 2013). To understand the state of interdependence between markets, it is crucial to understand individual behavior contributing to shock transmission. While much of the state of contagion can best be assessed with dynamic conditional mean and variance, the essential long term association may call for unique marginal reconstructions.The major Southeast Asian economies prior to the Asian crisis have attracted half of the total capital inflows in Asia. High interest rates for seekers of higher returns primarily found Asian markets to be much more attractive than European markets. The increased capital investment eventually resulted in higher-leveraged economies, creating an asset bubble. As some critics suggested, accelerated growth such as that of the Southeast Asian region would only bring prosperity if improvement of total factor productivity surpassed immediate capital expansion (Krugman, 1994). The situation was made worse in the face of capital outflows, as many Asian economies shifted from fixed to floating exchange rate regimes, and faced immense depreciative pressure.The first degree markets are the crisis markets (Indonesia, South Korea and Thailand) from which shock is believed to have spilled over to the Philippines, Malaysia and Singapore (Secondary crisis markets) and into many other Asian economies. Thailand, as the ground zero market, had to rely on Structural Adjustment Package (Khan, 2004). This compelled the Hong Kong government, which previously allowed short selling by speculators, to impose strict capital controls and direct capital market intrusion (Corbett and Vines, 1999). In contrast, Malaysia shifted from a floating to a fixed exchange regime, and profound restrictions were imposed. South Korean currency devaluation then quickly doubled. However, South Korea, with proper policy in place, tripled its per capita GDP in the eventually. China and Singapore allowed capital outflow, but successfully recovered due to their improved total factor productivity.It did not take very long before the Asian economies in crisis regained their previous form. Nonetheless, they were initially throttled by hasty liberalization, lack of corporate governance and proper financial controls (Daly, 2003). Among others, there were things such as the abrupt lifting of the credit ceiling, and restrictions on the rate of return as emphasized by Montes and Popov (1998). During the periods following this turmoil, developing economies quickly responded with foreign currency reserves, and 'Pan Asian currency swaps' were introduced as insurance against individual and country specific risks. Interestingly, nations such as Japan, China and India restricted their economies from building up extensive 'foreign exchange reserves', shifting funds to US treasury bonds, mortgage markets and securities, leading to the development of an asset bubble in the US.The most significant economic crisis in recent history, the Global Financial Crisis (GFC) of 2007-2008, warrants much investigation. …

The Credit Behavior of Households - A Behavioral Approach

The access to credit is generally seen as an important ingredient for development. However, over the last years reports on families contracting excessive debt and falling into credit traps have also increased. In this paper I develop a model of family credit behavior based on insights from behavioral economics. I particularly consider phenomena like keeping-up-with-the-Joneses, a limited time horizon, gain-loss-asymmetry and over-confidence. The model coherently reproduces the level and the distribution of debt over for all socioeconomic groups. The results suggest that the use of a reference-group dependent utility and the precise definition of the reference group are crucial elements in explaining the debt levels of the different socio-economic groups. A policy simulation shows that reducing the amount of available credit (ceiling) might have beneficial effects on consumption and consumption inequality. In this respect, the findings contradict the idea that access to credit is positive for families in all situations.

Comment on “Chiang Mai Initiative Multilateralization: Origin, Development, and Outlook”

Comment on “Chiang Mai Initiative Multilateralization: Origin, Development, and Outlook”

Impact Of Financial Reforms On The Banking System In Ghana

The pre-reform policies, coupled with an acute and prolonged economic crisis which severely damaged the financial system in Ghana, caused policymakers to address the institutional deficiencies of the financial system through the Financial Sector Adjustment Program. This paper investigated the pre- and post-reforms policies to determine whether those policies have helped to eradicate problems that have hindered the effectiveness of the financial system. The liberalization of Ghanas financial system has included the relaxation of interest rate controls, credit ceiling, partial privatization of the governments own banks, restructuring of public sector banks, capital markets developments, and deregulation of the prudential system. The performance of the financial sector has been substantial and healthy since the reforms. Overall, the financial liberalization strategy pursued in Ghana has been supportive of wider economic development.

Kingdom of the Netherlands-Aruba: 2010 Article IV Consultation Discussions-Staff Report; Informational Annex; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for the Kingdom of the Netherlands-Aruba

Aruba has an open economy with a history of stability-oriented macroeconomic policies. Adverse external shocks have led to a decline in tourism and disruption of oil refinery operations. Serious fiscal challenges need to be addressed and a fiscal adjustment program is needed to safeguard the sustainability of the public finances. Expenditure cuts and the central bank’s switch from a credit ceiling to an unremunerated reserves requirement as key policy tool is commended. The new monetary policy framework will likely increase the challenges to prudential regulation and supervision.