Credit Contracts Research Articles

ANALISIS CUSTOMER PROFITABILITY PADA KOPERASI SIMPAN PINJAM “DIASPORA”

The purpose of this study was to analyze Customer Profitability in the Diaspora Savings and Loans Cooperative (Credit Union). This research is a comparative quantitative research. The consumers studied were limited to debtor customers only. There are 4 consumer groups studied, where each group consists of 30 customers. Data were collected by using a documentary study technique by examining credit contracts and financial statements of each customer. The data were analyzed by means of a mean difference test with an independent sample t-test technique. The results showed that the groups of consumers who gave the highest profitability were the cheap and passive groups. Meanwhile, the consumer group that tends to harm the cooperative is the aggressive group. Thus, it is suggested to the cooperative manager to increase the number of consumers in the cheap and passive groups and reduce the number of consumers in the aggressive group.

중국의 금융사이클과 실물사이클 간 관계 분석

The data used in this research are from the first quarter of 2001 to the third quarter of 2020 to analyze the relationship between the financial cycle and the business cycle in China. The research results are as follows: First, the cycling period of housing price cycles and equity price cycles are relatively short in comparison with the ratios of total credit to the private credit to GDP. Second, the research shows that the selected indicators faithfully manifest the medium-term cycle. Third, in terms of the financial cycle, because of the peak, there is concern that this could lead to a financial crisis. Fourth, the financial cycle and business cycle were synchronized before the global financial crisis of 2008. However recently they are at odds. The monetary policy and financial stability have always been the main research questions of researchers. Because of the several financial crises, their importance has become more prominent. In addition, since the Great Moderation, leading researchers at the Bank for International Settlements (BIS) have studied the relationship between the stability of the real economy and financial stability with the concepts of financial cycle and business cycle. They pay attention to the expansion and contraction of the real economy caused by the financial sector. For the real economy, it not only needs to deal with the impact of the financial sector, but to distinguish the internal factors of the business cycle and the financial cycle. The point is that the two cycles are not always in sync. In the contraction period of the business cycle, the financial cycle can be in the expansion period, and vice versa. Thus, monetary policy aimed at price stability is often at odds with macroprudential policy aimed at financial security. It is an important task to properly integrate monetary policy and macroprudential policy according to different conditions. According to the research results, the enlightenment is obtained as follows: First, the financial cycle is inevitable, and it refers to the expansion and contraction of credit according to the certain period of the economic cycle. If the financial cycle is excessively amplified, the credit and asset prices will have boom-bust. Therefore, in order to mitigate the fluctuation of the financial cycle, it is necessary to create a sound macroeconomic environment by shaking off excessively low interest rates and implementing targeted policies. Second, in the financial cycle, it is very important to monitor the asset price development so as to avoid excessive asset prices bubble. Third, as the information and financial technology developing rapidly, although the changes of financial structure are inevitable, the procyclicality of the financial system has greatly increased, and the duration and intensity of the financial cycle have also greatly increased. Therefore, the country should begin to find measures to decrease the procyclicality of financial cycle.

A Law and Behavioural Economics Analysis of High-Cost Lending in New Zealand

The most interesting recent developments in economics have come from behavioural economics, which attempts to model how people will behave in real life situations. The insights offered by behavioural economics can also be applied to law. This article discusses law and behavioural economics generally, and then applies it to the New Zealand high-cost loan industry. The high-cost loan industry is responsible for a great deal of harm in New Zealand, and in 2019 Parliament passed sweeping amendments to the Credit Contracts and Consumer Finance Act 2003 to insulate consumers from that harm. Law and behavioural economics suggest alternative strategies to those amendments that can address the harms while retaining the benefits that high-cost loans can provide. This article designed an experimental survey to test one such strategy, and the results and implications for policy are discussed.

Small Claim Court as the Alternative of Bad Credit Settlement for Legal Certainty of the Economic Actors

This article aimed to analyze the problem of legal cases accumulation, especially default on credit contracts in court. It also analyzes the effectiveness of implementing a small claim court in contract default and the independence of a single judge in handling cases through the small claim court mechanism. Small claim court also to offer a breakthrough in the settlement of bad loans related to contract defaults to reduce the burden on courts in Indonesia and provide legal certainty to business actors. The sole judge also examine, resolve and decide on inheritance cases in a fast and efficient process to issue a fair decision for all parties. This normative study was carried out using statutory, case, comparative law, and analysis content approaches. The research results showed that the filing of small claim court increased 10 times from 2015 to 2020, with the plaintiffs dominated by banks in bad credit cases. A small claim court provides benefits the bank and the customer because it speeds up the settlement of the plaintiff's money in a bad credit case with a case value of not more than 500 million, especially for microloans in a maximum period of 25 days. Furthermore, the latest regulation of 2019 concerning small claim court gives judges the authority to confiscate guarantees and conduct auctions to carry out forced executions through the Court Execution Auction process.

Settlement Of Bad Loans Through Debt Payment Obligation Submitting Institutions (PKPU)

In order to enter the era of globalization and face the growth of the national economy, the banking sector is one sector that must be developed and utilized optimally. Especially through the provision of facilities provided by the banking sector for the community. The problem formulated in writing this thesis is how to handle bad loans in the banking environment, then discussed again What is the legal relationship between the Suspension of Debt Payment Obligations (PKPU) and bad loans, then discussed about How to settle bad loans through the Debt Payment Obligation Suspension Agency. (PKPU).The research that will be conducted is normative legal research. Normative research based on primary and secondary legal materials, namely the intarization of regulations relating to the writing of the author's thesis. The data collection technique was carried out by means of library research (library research). From the data that has been collected, both primary data and secondary data, then processed and analyzed using qualitative descriptive analysis techniques. Bad credit (Non Performing Loan / NPL) is where the credit cannot run as agreed in the credit contract agreement. Bad credit or credit failure can occur for many reasons. To avoid the occurrence of bad credit, it is necessary to control. Every loan disbursement of course has complied with banking regulations and is in accordance with sound credit principles. If indeed in the future, the credit develops into bad credit, then PKPU will be an alternative for the debtor and creditor in repaying the credit. As long as PKPU lasts, debtors cannot be forced to pay their debts. All execution actions that have been assessed to obtain debt repayment, must be suspended.

Large banks and small firm lending

We examine the long-lasting effects of the 2007 real estate price collapse on small business credit supply. Banks affected by the decline in real estate prices systematically contracted their credit to small firms. At the same time, regional and local banks, many of which were unaffected by the initial shock, increased small business lending to nearby borrowers and opportunistically expanded their branch networks, making gains in market share that persisted for the following decade. Although the net effect of the contraction in credit was negative, we show that opportunistic expansion tied to permanent market changes is an important offsetting force that dampened the negative effect on small firms during the GFC and its aftermath.

Anti-Mafia Law Enforcement and Lending in Mafia Lands. Evidence from Judicial Administration in Italy

Abstract The paper analyses the impact of a preventive measure aimed at fighting the criminal organizations’ activities on the bank-firm relationship in the four Italian regions with the highest density of mafia over the period 2004–2016. Taking advantage of the staggered firm-level anti-mafia enforcement actions, we implement a difference-in-differences approach and find that after entering judicial administration mafia-infiltrated firms experience a 19 per cent contraction of bank credit and have a higher probability of being credit rationed than a matched sample of legal companies. We also find that firms confiscated from the mafia experience a negative change in some demand-driven (value of production) and supply-driven (profitability) determinants of loans. Finally, we study whether confiscation of infiltrated firms produces externalities on non-infiltrated companies, and show that banks do not reassess the overall credit risk in local markets.

Optimal two‐level trade credit with credit‐dependent demand in a newsvendor model

AbstractA two‐level trade‐credit mode, in which both supplier and retailer provide trade credit to their buyers, is prevalent in several types of markets. This paper investigates the optimal trade credits provided by the supplier and retailer, and the optimal order quantity, assuming credit‐dependent demand in a newsvendor model. The strategic interaction between the supplier and retailer is modeled as a Stackelberg game with the supplier as the leader. We provide conditions under which the optimal decisions on trade credits and order quantity can be uniquely determined, which enable us to examine the relationship between the optimal trade credits and describe conditions providing them. We also compare the credit contract and price contract in profit, consumer surplus, social welfare, double marginalization, and supply chain coordination, and our analysis shows that the trade‐credit contract amounts to an alternative for the price contract. Finally, we use several numerical examples to illustrate the theoretical results and provide managerial insights.

TỶ LỆ LÃI SUẤT TRONG HỢP ĐỒNG VAY TIỀN THEO QUY ĐỊNH CỦA PHÁP LUẬT DÂN SỰ VIỆT NAM QUA CÁC THỜI KỲ TRONG MỐI LIÊN HỆ VỚI PHÁP LUẬT TÍN DỤNG

Lãi suất là một công cụ tài chính nhằm đảm bảo quyền lợi của bên cho vay trong các hợp đồng vay tiền; theo đó, bên vay có nghĩa vụ trả lãi nếu có thỏa thuận hoặc pháp luật có quy định. Qua các lần sửa đổi Bộ luật Dân sự, lãi suất là một nội dung có nhiều sự thay đổi so với các quy định khác trong chế định hợp đồng vay tài sản. Tuy nhiên, tỷ lệ lãi suất được quy định trong Bộ luật Dân sự hiện hành vẫn còn gây ra nhiều cách hiểu khác nhau, đặc biệt là trong mối liên hệ với pháp luật tín dụng. Điều này dẫn đến việc áp dụng pháp luật không thống nhất, đặc biệt là khi giải quyết các tranh chấp về hợp đồng tín dụng. Vì vậy, trong phạm vi bài viết, trên cơ sở nghiên cứu các quy định về tỷ lệ lãi suấttrong hợp đồng vay tiền theo quy định của pháp luật Việt Nam qua các thời kỳ, chúng tôi phân tích một số vướng mắc về tỷ lệ lãi suất theo quy định của Bộ luật Dân sự Việt Nam hiện hành trong mối liên hệ với pháp luật tín dụng và đưa ra một số kiến nghị cụ thể giải quyết vấn đề này.

COVID-19 and Small- and Medium-Sized Enterprises: A 2021 “Time Bomb”?

This paper assesses the prospects of a 2021 "time bomb" in small-and medium-sized enterprise (SME) failures triggered by the generous support policies enacted during the 2020 COVID-19 crisis. Policies implemented in 2020 do not on their own create a 2021 time bomb for SMEs. Rather, business failures and policy costs remain modest. By contrast, credit contraction poses significant risk. Such a contraction would disproportionately impact firms that could survive COVID-19 in 2020 without any fiscal support. Even in that scenario, most business failures would arise not from excessively generous 2020 policies but rather from the contraction of credit to the corporate sector.

Independensi Penentuan Jumlah Nilai Agunan dalam Perjanjian Kredit yang Dilakukan oleh Appraisal Bank

A bank always requires collateral to its customers in providing credit facility as a form of a guarantee or responsibility for their contract with the bank. A bank also employs an Appraisal Bank or Public Appraisal Service Office (KJPP). KJPP is expected to prevent wrong collateral valuation and value engineering. Therefore, the research problems are how the independence of an Appraisal Bank is, in performing collateral valuation in a credit contract, how the binding force of the valuation results gained by an Appraisal Bank to the collateral in a credit contract, and how the liability of the Appraisal Bank for the valuation performed by an Appraisal Bank to the collateral in a credit contract. This is a normative juridical and descriptive research. This research employs statutory method using primary, secondary, and tertiary legal materials. The data are collected from library study and field observation. They are analyzed by reducing data, presenting data, and drawing conclusions/making verification to obtain descriptive data. The results of the research conclude that the independence an. appraisal is assessed when he performs valuation without intervention from anyone. In legal view, an appraisal is considered valid and affecting the collateral object; the results of his valuation becomes his responsibility. The responsibility of an appraisal for his valuation results can be seen from the conformity of his report and the prevailing regulations. It is suggested that one be required and obliged to have specific skills, integrity, honesty and objectivity to become an appraisal. An appraisal also has to be guided by ethical codes and prevailing laws and regulations.

Ordering Policies of a Deteriorating Item in an EOQ Model under Upstream Partial Order-Quantity-Dependent Trade Credit and Downstream Full Trade Credit

In the classical inventory systems, the retailer had to settle the accounts of the purchased items at the time they were received. But in practice, the supplier applies some strategic tools, such as trade credit contract, to enhance his sales channel and offers delay period to his customers to settle the account. Any member of the supply chain may offer full or partial trade credit contract to his downstream level. Full trade credit is the case that the latter is allowed to defer the whole payment to the end of the credit period. In partial trade credit, however, the downstream supply chain member must pay for a proportion of the purchased goods at first and can delay paying for the rest until the end of the credit period. This paper considers a two-level trade credit, where the supplier offers order-quantity-dependent partial trade credit to a retailer, who suggests full trade credit to his customers. An economic order quantity (EOQ) inventory model of a deteriorating item is formulated here, and the Branch and Reduce Optimization Navigator is applied to find the optimal replenishment policy. The sensitivity of the variables on different parameters has been analyzed by applying some numerical examples. The data reveal that increasing the credit periods of the retailer and the customers can decrease and increase the retailer’s total cost, respectively.

Housing bust, bank lending & employment: Evidence from multimarket banks

Abstract Using geographic variation in bank lending, I study how bank real estate losses affected the supply of credit and employment during the Great Recession. Banks exposed to distressed housing markets cut mortgage and small business lending relative to other banks in the same county. This lending contraction had real effects, as counties whose banks were exposed to adverse shocks in other markets suffered employment declines, especially in young firms and bank dependent industries. This credit contraction also caused wages to fall and consumer delinquencies to rise, contributing to subsequent declines in nontradable employment.

Income Share Agreements and the FTC’s Holder Rule

The results of an investigation by the Student Borrower Protection Center offer new evidence that for-profit coding bootcamps and ISA companies may be systemically violating federal law by omitting a legally mandated term from the contracts underlying students’ ISAs—language required under the Federal Trade Commission’s (FTC) “Holder Rule.” The Holder Rule is a federal regulation intended to help consumers when a defective or fraudulent product or service is purchased with credit extended directly by the seller or arranged by the seller. The rule allows the consumer to assert the seller’s fraud (or the product’s defect) as a defense to repayment of their credit obligation, even where a new entity owns their credit contract—or even to sue for reimbursement of money already paid for the fraudulent or defective products or services. In addition to being against the law, the omission of this required contract language could leave tens of thousands of students holding the bag when lofty promises from coding schools disappointingly manifest in low-quality educational products.

Availability of Compliance Status in the Documentary Credit Opening Contract: A Study on the Jordanian Legislations

The letter of credit (L/C) contract is one of a range of banking operations through which banks can finance foreign trade. The contract provides security and stability to the trade because of the trust and credit it gives, since the buyer may be in one country and the seller in another, so as to assure each other that the other party fulfills its obligation. However, is this contract can be considered as a compliance contract so the relations between parties is a submissive weak-strong relationship? This necessarily entails examining the availability of legal protection to prevent the abuse of a strong party. Hence, this paper aims to examine the availability of compliance status in the documentary credit opening contract and focuses on the Jordanian legislations as a case study. The comparative analytical approach is executed in this study. The findings reveal that the L/C contract is influenced by the concept of compliance, however the L/C contract can be adjusted by the client, in accordance with the rules and provisions of this credit.
 
 Received: 31 January 2021 / Accepted: 27 February 2021 / Published: 7 March 2021

New Clause in Bank Credit Agreement in Relation to Consumer Protection Act (Study on PT. Bank Negara Indonesia, Tbk. Denpasar Branch)

Credit agreement in standard form which is being made unilaterally by the bank until present is still becoming a special legal issue in agreement field of civil law. In addition, viewed from the side of the agreement it is also against consumer protection law as set in Consumer Protection Act. Problem formulation of is divided into namely regarding the existence of standard clause in bank agreement if associated with Article 18 of Consumer Protection Act and legal consequence of standard clause in credit agreement associated with consumer protection. This study aims to identify the presence of standard clause in banking agreement if related with Article 18 of Consumer Protection Act and legal consequence to the standard clause in credit contract is associated with consumer protection. The research is a juridical empirical. The location is on PT. Bank Negara Indonesia in Denpasar city. The author is guided by laws and regulations related with public fact, that is first problem formulation is analyzed from balancing principle and next the second problem formulation is from consumer protection theory. The result shows that the implementation of the provision tends to protect the bank as businesses. Moreover, the legal consequence of Bank BNI’s credit contract which does not meet the provision will result in null and void.

New Clause in Bank Credit Agreement in Relation to Consumer Protection Act (Study on PT. Bank Negara Indonesia, Tbk. Denpasar Branch)

Credit agreement in standard form which is being made unilaterally by the bank until present is still becoming a special legal issue in agreement field of civil law. In addition, viewed from the side of the agreement it is also against consumer protection law as set in Consumer Protection Act. Problem formulation of is divided into namely regarding the existence of standard clause in bank agreement if associated with Article 18 of Consumer Protection Act and legal consequence of standard clause in credit agreement associated with consumer protection. This study aims to identify the presence of standard clause in banking agreement if related with Article 18 of Consumer Protection Act and legal consequence to the standard clause in credit contract is associated with consumer protection. The research is a juridical empirical. The location is on PT. Bank Negara Indonesia in Denpasar city. The author is guided by laws and regulations related with public fact, that is first problem formulation is analyzed from balancing principle and next the second problem formulation is from consumer protection theory. The result shows that the implementation of the provision tends to protect the bank as businesses. Moreover, the legal consequence of Bank BNI’s credit contract which does not meet the provision will result in null and void.

The Coordinator Role of Trade Credit Contract for Coordinating Integrated Pricing and Periodic Review Inventory Decisions With Stochastic Demand

The purpose of this study is to analytically coordinate joint pricing and periodic review ordering choices for a supply chain (SC) facing stochastic price-dependent demand. In this paper, first, the optimal inventory and pricing strategies made by SC members are obtained under decentralized and centralized models. Thereafter, employing a trade credit contract, it proposes to provide a win–win coordination for the investigated SC. Sensitivity analyses are provided both analytically and numerically which indicate the significance of trade credit contracts in improving both customer service level and customer satisfaction. The results indicate that using trade credit contracts, the coordination of joint pricing and periodic review ordering choices is achievable. Moreover, the proposed trade credit contract has a unique feature in achieving more economic benefit compared to the centralized model under some circumstances. In addition, sensitivity analyses reveal that the coordination of integrated periodic review ordering and pricing choices is beneficial, especially for items with high price sensitivity and high demand uncertainty. Our findings also show the applicability of the trade credit contract for an SC facing highly uncertain demand.

Foreign bank entry and poverty in Africa: Misaligned incentives?

This study investigates the link between industry reliance on external finance, real activity, and foreign bank entry to poverty reduction. Results show that foreign bank entry widens Africa's poverty gap, notably when financing to high value-added industry sectors remains low. Results are consistent with the cream-skimming intermediation hypothesis, occasioning a contraction of credit. By tendering credit to a broader set of firms in industries disproportionately reliant on external finance to grow, foreign banks may partially offset the welfare-reducing effect. However, foreign banks' role in driving down poverty rates is conditional to the host country's institutional quality – an institutional threshold beyond which foreign banks' entry may induce poverty-reducing effects, necessitating a minimum level enabling institutional environment in the host country.

The Missing Home Buyers: Regional Heterogeneity and Credit Contractions

This paper demonstrates that the protracted decrease in young homeownership since the Great Recession was driven by high-house price regions, despite credit standards changing mostly nationally. Using a panel of U.S. metro areas, I calibrate an equilibrium spatial macro-finance model with overlapping generations of mobile households. Aggregate and regional housing dynamics are explained more by the heterogeneous impacts of an aggregate credit tightening than by local shocks. Lower Millennial income and wealth amplify this effect. The impact of subsidies to first-time buyers is dampened, because they fail to stimulate regions that suffer larger busts. Place-based subsidies achieve larger gains.