Bank Credit Research Articles

The role of bank credit in alleviating the housing problem in Iraq for the period (2004-2021)

It is no secret that bank credit plays an effective role in the economic and social life of all societies, especially in terms of stability and prosperity through the necessary financing for investors and individuals seeking their needs for housing units. The research was based on the financing provided by the relevant authorities in Iraq, such as the Real Estate Bank and the Housing Fund, with the support of the Central Bank through its well-known initiatives. The importance of the research lies in the ability of banks and relevant authorities to provide an appropriate climate for those concerned with the housing problem and meet their need to reduce this problem as much as possible if the required capital is available.As for the aim of the research, it revolves around the extent to which bank credit has an impact on reducing and effectively influencing the housing problem in Iraq. The research concluded that credit is linked to the housing problem through the existence of an inverse relationship between the housing problem as a dependent variable and bank credit directed to the housing sector, whether cash or pledged, as independent variables.The researcher reached important recommendations for a solution, the most prominent of which is the necessity for the state to adopt a new strategy to eliminate the housing crisis, which includes a specific and well-studied timetable to come up with unconventional solutions and not be satisfied with patchwork solutions and policies. The role of the private sector must also be activated in investing in the housing sector and providing all types of support and incentives to it, in addition to working to increase investment financial allocations directed to the housing sector. From the federal budget in order to meet as much as possible the need for housing units to alleviate the housing crisis, not to mention reviewing the laws and legislation related to the housing sector in a way that leads to making the housing sector an attractive sector for investment to attract the necessary capital for it.

The Role of Equity Crowdfunding in the Brazilian Entrepreneurial Ecosystem: An Empirical Analysis

This research provides the first deep and empirical look into Brazil’s increasing equity crowdfunding, or crowdinvest, market, and examines its peculiarities. It is a pioneering work dedicated to understanding which characteristics most impact the success of offers in the country, and whether there is any representative movement pointing to the inclusion of gender, firm age, and location or participation of small investors. We employ descriptive and quantitative research techniques and analyses all the offerings derived through this mechanism from 1 January 2017 to 31 December 2020—totaling 234 operations, considering successful offers (the ones that received investment) and unsuccessful offers (those that failed in raising funds), registered by 24 platforms in the country according to CVM (Comissão de Valores Mobiliários), the Brazilian SEC, under regulation Instruction 588. Furthermore, we use empirical and publicly available data from several sources. The findings reveal that mutual offers are more attractive to investors than those of equity, impacting the dependent variable of success. Besides this, firm location is the only inclusion aspect with representativeness among the independent variables tested. The main contributions of the research lie in providing the first empirical study that (1) consolidates a consistent database of the equity crowdfunding industry in Brazil, (2) reveals the role of crowdinvest in Brazil, related to bank credit to SMEs, and (3) provides recommendations to the main stakeholders that can improve the whole ecosystem.

Factors affecting the adoption of air pollution control measures across firms in India

Air pollution control has emerged as one of the key concerns of recent times and business firms are one of the significant stakeholders in deteriorating the quality of the natural environment. The purpose of this paper is to analyse the factors affecting the adoption of air pollution control measures across firms and contribute to the existing knowledge on pollution control among firms in the context of an emerging market. The analysis shows a significant association between enterprise characteristics and the adoption of air pollution control measures and about 44.3 percent firms have reported the adoption of air pollution control measures. Further, the marginal effect analysis indicates that firms older in age, larger in size and having shareholders’ equity are more likely to adopt air pollution control measures. Similarly, firms practising lean operations, investing in research & development, availing bank credit, having quality certification and having better capacity utilisation are more likely to adopt air pollution control measures. Finally, firms perceiving obstacles related to business licensing & permits, tax administration, political instability, and business closure due to COVID-19 outbreak are more likely to adopt air pollution control measures. Our study provides useful implications for managers, policymakers and researchers for encouraging air pollution control technologies across business firms. The study also motivates undertaking future research on pollution control measures across various sectors of the economy.

Energy Consumption, Bank Credit and Manufacturing Industry Performance: A Panel ARDL Analysis in Western Indonesia

The energy growth nexus is still being debated due to mixed empirical findings. This study seeks to establish a relationship between energy consumption, bank credit, and the performance of the manufacturing industry. This study also aims to determine the pattern of the dynamic causal relationship between energy use, bank credit, and the performance of the manufacturing industry in 17 provinces in western Indonesia. This study used secondary data from the Central Bureau of Statistics and the Financial Services Authority. Panel data are from 17 provinces in western Indonesia, spanning from Q1 2010 to Q4 2022 (2010Q1–2022Q4). We employed the panel ARDL and causality test to explore the connection between the variables of interest. The panel ARDL confirms that energy consumption and bank credit play a crucial role in boosting the performance of the manufacturing industry in the long term. This study found strong evidence to support the long-term feedback hypothesis of the energy-output growth nexus. However, in the short term, bank credit was statistically insignificant at all confidence levels. We recommended several policies to local governments and stakeholders, prioritizing the provision of more adequate energy infrastructure and greater access for industrial businesses to utilize banking services. Advancing infrastructure and developing the utilization of new renewable energy are proposed to support sustainable economic development.

Stopgap or sustainable strategy? The impact of China’s green credit guidelines policy on corporate ESG performance

Purpose This paper aims to investigate the impact of China’s Green Credit Guidelines (GCG) policy on the environmental, social and governance (ESG) scores of restricted enterprises and examine firm’s speculative behavior in response to the policy. Design/methodology/approach This paper views the GCG policy proposed in 2012 as a quasinatural experiment and uses difference-in-differences (DID) model to evaluate its influence on the ESG scores of Chinese nonfinancial A-share listed enterprises from 2007 to 2019. Robustness tests include the propensity score matching (PSM)–DID method and permutation tests. Findings The GCG policy significantly increases the ESG scores of restricted enterprises, particularly enhancing environmental (E) performance. However, it only improves the social (S) and governance (G) performance of firms heavily reliant on bank credit, indicating speculative behavior by enterprises. Increased Government attention, a higher proportion of female executives and more developed local green finance reduce speculative behavior, while executives with financial backgrounds promote it. Practical implications Governments should mandate standardized ESG reporting and monitor restricted enterprises, banks should monitor speculative behavior and firms should integrate ESG into their long-term strategies to support sustainable development. Social implications The results provide evidence of the effectiveness of implementing the GCG policy in China and offer guidance for better promoting green credit policy in developing countries, contributing to the transition toward a more sustainable future. Originality/value To the best of the authors’ knowledge, this paper is the first to explore if the GCG policy’s asymmetric effects on ESG components are due to enterprise speculative behavior and examines the factors influencing this behavior, providing insights for regulators to better implement the GCG policy to promote sustainable development.

Analisis Risiko Modal Ventura Syariah di Indonesia

Venture capital as an alternative financing outside credit banking. Investments made in the form of shares or convertible bonds in the long term, and aimed at business partner companies (PPU), venture capital is a collection of capital originating from investors to be managed professionally by a management company and investment in PPU. Funds invested in venture capital are investment funds that have high risk. This research uses a library or literary study approach. Data collection techniques are carried out through reading and taking notes, as well as managing previous research materials. The aim of this research is to determine the potential risks that will occur and the impact of risks on venture capital. Research results show that venture capital often contributes to helping entrepreneurs develop. So it cannot be denied that venture capital is very prone to losses for both parties.

PENGARUH PERTUMBUHAN EKONOMI, INFLASI, KREDIT, DAN UANG ELEKTRONIK TERHADAP STABILITAS SISTEM KEUANGAN

Unstable economic growth such as during the economic crisis and inequality in the financial inclusion system will have significant implications for financial system stability. Financial instability is characterized by a decline in public welfare, social instability, and broad economic losses. This study aims to examine the effect of economic growth, inflation, and financial inclusion on financial system stability. The analysis technique used is ECM. The dependent variable of financial system stability is measured by the Financial System Stability Index (ISSK) while the independent variables are economic growth, inflation, and the ratio of general banking credit to GDP and the volume of electronic money transactions to measure financial inclusion. The research data is secondary data with a quarterly period of 2012-2022. The empirical results of this study found that in the short term an increase in bank credit to GDP will increase stability. Meanwhile, an increase in economic growth, inflation, and the volume of electronic money transactions will reduce financial system stability.

Analysis of Intellectual Property Rights as an Object of Fiduciary Guarantee on Banking Credit

This writing aims to analyze Intellectual Property Rights as an object of fiduciary guarantee, which until now cannot be said to be maximal, because banks and guarantee institutions have not been able to accept copyright patent rights as fiduciary collateral. There are no clear methods and regulations regarding the basis of Intellectual Property Rights themselves, one of which is regarding the value of the rights attached to intellectual property. This paper discusses the issue of intellectual property rights as an object of fiduciary collateral for credit in banking and how in the future patents and copyrights can be used as objects of fiduciary collateral in banking properly. The theories used in analyzing the problem are legal system theory, ownership theory and fiduciary guarantee theory. The method used in this research is normative legal research which was carried out as an effort to obtain the data needed for the problem. The data used is secondary data and tertiary legal materials. The primary data is used as supporting secondary legal material. And data analysis was carried out using qualitative juridical analysis methods. From the results of this research, it can be seen how the position of patents and copyrights as intangible assets should be used as objects of fiduciary guarantees in banking, by adding the words Intellectual Property Rights regarding guarantees to the Bank Indonesia Regulations (PBI). And what is the concept of examination and assessment of the economic value of intellectual property rights, especially patents and copyrights, which will be used as a reference in calculating financial and legal risks for collateral recipients in future implementation.

The impact of the ECB’s non-regular operations on bank credit: cross-country evidence

The impact of the ECB’s non-regular operations on bank credit: cross-country evidence

The impact of banking credit and agricultural investments on the performance efficiency of the agricultural sector in Egypt

The impact of banking credit and agricultural investments on the performance efficiency of the agricultural sector in Egypt

Government R&D subsidies, bank credit and the innovation efficiency of high-tech enterprises

This study focuses on Chinese high-tech listed enterprises spanning from 2010 to 2022, aiming to explore the primary impact of government R&D subsidies on their innovation efficiency. Our findings indicate that these subsidies effectively enhance the innovation efficiency of high-tech enterprises. Furthermore, bank credit serves as a positive intermediary between government subsidies and improved innovation. Notably, R&D subsidies tend to have a greater impact on enhancing innovation efficiency in private enterprises compared to state-owned enterprises.

DO THIRD-PARTY FUNDS AND BANK RISKS AFFECT THE PROFITABILITY OF DIGITAL BANKS ?: INDONESIAN EVIDENCE

This study was conducted on five digital banks in Indonesia, examining the effects of third-party funds (TPF) and bank risks, including credit, market, and operational risks, on profitability. This research employs a quantitative-explanatory approach and uses 96 observational data from five Indonesian digital banks' websites using quarterly financial data from 2019-2023. This study presents novel empirical evidence that the CAR has a positive effect on digital banks' profitability (ROA), and operational risk (OCOI) has a negative effect on profitability (ROA). Using panel data regression, this study finds that TPF and market risks do not significantly affect profitability. The study underscores the crucial role of digital banks' operational and credit risks in profitability while also revealing that TPF and market risk are not among the main drivers of digital banks' profitability.

A Review of Research on the Impact of Equity Investment on the Debt Financing of Invested Enterprises

To promote the theoretical and empirical research on the linkage of “stock loan debt insurance”, this paper summarizes the current situation of English and Chinese literatures research on the impact of VC/PE on the debt financing of invested enterprises. At present, the relevant research on the impact of VC/PE on the debt financing of invested enterprises in English literatures mainly focuses on the role and mechanism of third-party VC/PE, the role and mechanism of bank-affiliated VC/PE. The relevant research on the impact of VC/PE on the debt financing of invested enterprises in Chinese literatures mainly focuses on the direct role of third-party VC/PE and the mechanism of third-party VC/PE. From the relevant research results of English literatures and Chinese literatures, scholars generally believe that VC/PE has a positive impact on the debt financing of invested enterprises. The certification effect, corporate governance effect and ownership effect of VC/PE are the main mechanisms. In general, scholars’ research on ESG equity investment decisions of equity investment institutions for technology-based SMEs is relatively weak; in addition, scholars have rarely studied the impact of ESG equity investment intervention on the credit behavior of banks and technology-based SMEs. Under the concept of ESG, the academic research on the theoretical quantification and empirical estimation of the influence mechanism of ESG equity investment on the bank credit decision-making of technology-based SMEs needs to be carried out urgently.

Corporate Greenwashing Unexpectedly Caused by the Green Credit Policy: A Comparison between Environmental Sustainability Information Disclosure and Actual Environmental Protection Investment from China’s Listed Companies

This paper employs a continuous difference-in-differences model to compare environmental sustainability information disclosure with the real environmental investment amount of listed companies in China before and after the implementation of the Green Credit Guidelines, and it investigates the influence of Green Credit Policy on corporate environmental sustainability information greenwashing. The results show that the Green Credit Policy unexpectedly leads to the greenwashing of environmental sustainability information of listed companies. After the implementation of the Green Credit Policy, the amount of positive environmental information disclosed by listed companies has increased faster than that of corporate environmental investment. Further research on the intermediary effect shows that the reason why the Green Credit Policy leads to greenwashing is that the Green Credit Policy greatly reduces the availability of bank credit for enterprises on the restricted list, and these enterprises will relax the financing constraints caused by the policy in the future and thus adopt the greenwashing behavior. Heterogeneity analysis shows that these effects become smaller in state-owned enterprises and enterprises with large commercial financing scales, as they are less affected by financing constraints of the Green Credit Policy. The policy goal of the Green Credit Policy is to limit the financing of polluting projects and promote the sustainable development of enterprises. However, by comparing the corporate environmental sustainability information disclosure and the actual amount of environmental investment, this paper finds that the Green Credit Policy has unexpectedly led to corporate greenwashing. This result goes against the policy goal of sustainable development. Commercial banks should be more cautious about the environmental sustainability information voluntarily provided by enterprises to correct these distorted results.

Are bond markets and bank credits complementary or substitutable? Evidence based on the rule of law and countries’ legal origins

Bond and bank financing coexist despite their similarities as debt financing. I hypothesize that strengthening the rule of law in each country impacts corporate monitoring and firms’ financing preferences. I use panel data from 50 countries to analyze how the strength of the rule of law differs depending on countries’ legal origins. By using a regression model with an interaction term, I estimate marginal effects to determine if a stricter rule of law promotes bank or bond financing. The findings show that countries with common-law legal origins tend to have a stronger rule of law than civil law countries. A stronger rule of law increases bank lending but has a negative impact on bond issuance. This effect has a more significant impact in countries with Scandinavian legal origins and only a minor effect in countries with French legal origins. These differences can be attributed to how each country addresses agency problems, concerns regarding bank influence, and the availability of additional banking services.

Theoretical Review of the Impact of Covid-19 on Loans Performance- A Generic Approach to Reforms, Obstacles, and Future Opportunities-perspective from Zambia

It is not a disputed fact that the COVID-19 pandemic has heavily disrupted economic activities in the whole world, thereby posing unprecedented obstacles to financial institutions, including our home-developed financial system and particularly in the Zambian banking sector. This journal examined the effect of COVID-19 on credit facilities in Zambian banks, enlisting the obstacles faced, and transformation achieved by commercial banks, as well as looking at the future opportunities for the bank's credit business operations and knowledge from industry practitioners. Further, the study sheds more insight into the numerous effects of the pandemic on banks' credit facilities' performance and appropriate recommendations for steering the emerging insights from industry experts, this study sheds light on the multifaceted effects of the pandemic on credit facilities and offers recommendations for navigating the evolving environment.

Analisis Profitabilitas dengan Penyaluran Kredit Sebagai Variabel Intervening pada Perusahaan Perbankan di Bursa Efek Indonesia

This research aims to determine the profitability of banks which is influenced by several factors. While this research uses purposive sampling with the analysis technique of Statistical Package for the Social Sciens and Path Analysis. The results of this study conclude: Capital Adequacy Ratio has a negative contribution to the level of bank profitability. The ratio of third party funds has a contribution to the level of bank profitability. Capital Adequacy Ratio has a negative contribution to Banking Credit Distribution (LDR, Third Party Funds Ratio (TPF) has a contribution to Banking Credit Distribution. Capital Adequacy Ratio has a contribution to the level of Banking Profitability by Lending as Intervening. Third Party Funds Ratio has a contribution to the level of Banking Profitability by Lending as Intervening Credit has a negative contribution to the level of bank profitability.

Challenges encountered by SMMEs in accessing bank credit: a case of Vhembe District Municipality

Policymakers and scholars universally accept and recognize the influence of small, macro, and medium enterprises (SMMEs) on stimulating economic growth and job creation. To succeed and prosper, SMMEs need to establish a sound financial management function; therefore, it is vital to investigate the financial challenges these firms are experiencing. The objective of this paper was, to investigate possible challenges that SMMEs experience when applying for credit from banks. The study sought to answer the main research question - ‘What challenges are encountered by SMMEs when applying for credit from banks? The study adopted a qualitative research methodology. The population used in this research was derived from SMMEs and banking officials in the Vhembe District Municipality area. Stratified random sampling was used to select a sample of 10 research participants. An interview guide was used to gather data from the participants; the data was analyzed using Atlas.ti. The results indicated that most SMMEs in the Vhembe district are not adequately supported, especially in the areas of financial resources, as well as in financial literacy skills and expertise. Specifically, this study identified that the credit application challenges faced by SMMEs are related to - lack of collateral security, lack of financial application education, complex bank credit access regulations, non-satisfaction of banks’ qualifying criteria, as well as stringent credit system, and documentation requirements.

Chinese-style carbon emission reduction: Micro mechanisms of state-owned enterprises

This article investigates whether state-owned enterprises (SOEs) exhibit a positive response to regional pressure for carbon emission reduction. By collecting and analyzing firm-level carbon emissions data in China from 2008 to 2021, we find that when faced with increased pressure to reduce emissions in a specific region, SOEs exhibit a substantial reduction in their carbon emissions compared to non-SOEs. Furthermore, this relationship is more remarkable among enterprises operating in high-emission industries and located in regions characterized by low economic growth objectives, but there is no heterogeneity in the executive environmental background. The mechanisms of political promotion incentives for SOE executives play a significant role in mitigating emissions through the combined effects of promoting green innovation and reducing output. Additionally, SOEs demonstrating stronger efforts in carbon emissions reduction are more likely to receive the compensations from governments, including green subsidies and lower bank credit costs and they have exhibited superior economic performance in subsequent years. These findings reveal the micro mechanisms behind China's regional carbon reduction and highlight the crucial role played by SOEs.

Linkage of Money Growth on Banks Credit – Evidence from Indonesia

Linkage of Money Growth on Banks Credit – Evidence from Indonesia