Credit Transactions Research Articles

Microcrediting and Investment Analysis in the Context of Environmental, Social, and Corporate Governance

This article is devoted to the analysis and development of ranking criteria for microcredit organizations to increase their investment attractiveness. The need to solve problematic issues is associated with the need to minimize risks before the start of the lending process through the correct selection of participants in the credit transaction. This study used the methods of content analysis and interpretation, correlation analysis and regression modeling, ranking, and clustering to assess the factors affecting the effectiveness of microcredit organizations. The most attention is paid to identifying key indicators that help improve the quality of financial services provided and their availability for various categories of borrowers. The results show that factors related to lending volumes and borrower characteristics have a significant impact on the quality of microcredit organizations. Of interest is the interpretation of classical financial indicators of microcredit organizations in the context of the principles of environmental, social, and corporate governance (ESG). The proposed approaches and conclusions can be used to improve the practice of microfinance and develop management and regulation strategies in this area.

Doing good in times of need: Green finance policy and strategic corporate social responsibility

This study investigates the effect of a green finance policy on the corporate social responsibility (CSR) activities of firms in heavily polluting industries. Based on the 2017 policy of the People's Bank of China (PBC), which incorporates green finance into its macroprudential assessment system, we employ the difference-in-differences method to show that firms in heavily polluting industries have significantly improved their CSR performance after the implementation of the PBC's green finance policy. In response to the negative effect of the PBC's policy on their financial position, affected firms strategically engage in CSR activities in the hope that appearing socially responsible will help them recover from their adverse position. Furthermore, firms in heavily polluting industries that enhance their CSR performance after the PBC's policy have benefited from reduced bank credit transaction costs and have obtained more bank loans. The improvement in CSR performance is mainly concentrated in firms that are non-state-owned, small in size, highly dependent on external financing, and receiving more media attention. Overall, this study reveals a social consequence of the PBC's green finance policy on the CSR performance.

Discussion on the legal aspect of letter of credit transactions and recommendations for Vietnam

Discussion on the legal aspect of letter of credit transactions and recommendations for Vietnam

Using machine learning to investigate the determinants of loan default in P2P lending: Are there differences between before and during COVID-19?

The coronavirus disease (COVID-19) has led to a persistent increase in the volatility of the credit market and triggered a series of financial distress and bankruptcy. To investigate whether there are differences in loan default determinants before and during COVID-19 and to identify the most effective predictors of loan default during COVID-19, this study employs machine learning methods to establish a comprehensive loan default prediction model for Peer-to-peer (P2P) lending based on four perspectives: loan characteristics, credit transaction history, personal information, and macroeconomic environment. The results show that the EXtreme Gradient Boosting (XGBoost) outperforms the other models and that credit transaction history plays a vital role in forecasting loan default over the two periods. We also find discrepancies between the effects of consumer price index, purchasing manager’ index, and the number of bidders on loan default before and during the pandemic. Our study contributes to related research fields on loan default prediction by identifying loan default determinants that are more applicable to unstable periods and investigating the impact of COVID-19 on default predictions. Meanwhile, our findings can provide P2P lending investors, platforms, and policymakers with practical implications to reduce uncertainty and losses that result from similar black swan events.

Guardians of the Digital Realm: Mapping Key Stakeholders in Data Privacy and Digital Credit Universe

In Nigeria’s rapidly evolving digital economy, data privacy and digital credits emerge as critical areas demanding robust stakeholder engagement and strategic oversight. This study examines the intricate web of key stakeholders in digital data privacy and digital credit sectors, their interrelations, responsibilities, and impacts. These stakeholders include governmental regulatory bodies, financial technology firms (fintechs), consumers and international organizations. Through a systematic literature review, the study navigates the complexities of these relationships, particularly in the wake of Nigeria's Data Protection Act and the burgeoning digital credit market. Data is synthesized from policy documents, digital credit transaction trends, and organizational repositories to underscore the growing significance of stakeholder actions and interactions. The findings illuminate the current landscape and forecast the trajectory of digital data governance and credit practices, emphasizing the necessity for a harmonious and secure digital economy that serves all stakeholders equitably.

The Impact of Transaction Credit on Credit Enhancement of Supply Chain Financing of Small and Micro-Logistics Based on Evolutionary Game Analysis

The issue of credit enhancement in supply chain financing for small and micro-logistics enterprises (SMLEs), as well as the factors that affect the decision-making of participants in supply chain financing transaction credit enhancement, is analyzed in this study. First, an evolutionary game model between financial institutions (FIs) and SMLEs was built. In contrast to bank loans, a novel mechanism for achieving credit enhancement based on transaction data in the transportation supply chain was established through a strict environment and an increase in default penalties to compel SMLEs to uphold their obligations. Furthermore, the stability analysis shows that the stable state convergence of the evolutionary game between FIs and SMLEs evolves to the stage where FIs offer loans to SMLEs. Finally, according to the simulation analysis on the real data collected from CHZL logistics park survey data, this work demonstrates that the fluctuation ranges of the strategy evolution process for the FIs and SMLEs are positively correlated with the intensity of the stochastic perturbation.

Legal Issues between the Opening Bank and the Bonded Warehouse Operator in the Letter of Credit Transaction - Focused on the Supreme Court Decision 2022da208649 -

Legal Issues between the Opening Bank and the Bonded Warehouse Operator in the Letter of Credit Transaction - Focused on the Supreme Court Decision 2022da208649 -

Granting analysis of the credit financing of the platform-type highway transportation supply chain.

Against the background of digital development, this study's research object is the platform-based highway transportation supply chain. It also analyzes two modes of supply chain financial credit financing, namely, upstream, and downstream enterprises of the platform, and network freight platform as the main financing body. Notably, the financial provider sets up a transaction credit based on the principle of business truth, and closed-loop transactions, determine the upper limit of the credit line based on the principle of financing self-compensation, build the expected profit maximization model, and establish the optimal credit line. Combined with the Highway Freight Index and Logistics Prosperity Index, the dynamic early warning value is established for the financing mode, where the platform as the main financing body. Through numerical analysis, the credit line and expected profit increase with the transaction credit, expected freight volume, and credit interest rate under the two modes, and the increase deriving from the credit interest rate is more significant. Finally, this paper describes the two-dimensional credit matrix of the financing subject via transaction credit and credit interest rate, which provides an intuitive credit reference for financial institutions to conduct the credit financing of the platform-based highway transportation supply chain.

Adoption of digital payment platforms and trade credit activities among informal firms in Ghana

This study investigates the relationship between the utilisation of digital payment platforms and the decision of informal firms to engage in the demand for or supply of trade credit. Recognizing the pivotal role of trade credit in alleviating financial constraints for informal enterprises, our research employs a recursive bivariate probit model to assess the impact of digital payment platform usage on both the demand for and supply of trade credit among informal firms in Ghana. Leveraging data from the World Bank Enterprise Survey, we find that 13.83 % of informal firms receive trade credit from suppliers, while 26.89 % extend trade credit to customers. Additionally, 49.6 % of firms use digital payment platforms for their business transactions. The study finds that digital payment platforms increase the probability of firms engaging in the demand and supply of trade credit. It argues that digital payments enhance transaction efficiency, convenience, and security, potentially reducing associated transaction costs and facilitating business interactions across distant locations. Various factors, including firm age, maintenance of accounting records, sales volume, owner experience, credit facilities, internet use for social media marketing, and operating hours, significantly influence the decision to engage in trade credit activities. The robustness of our results is confirmed through alternative estimation techniques. Recommendations include policy interventions aimed at promoting the digitalization of informal firms, supported by government investments in digital infrastructure. It is recommended that firms and their suppliers and customers should adopt these digital payment platforms in order to facilitate their use of trade credit in business transactions. A regulatory environment fostering business trust and responsible use of digital payment platforms is crucial, necessitating measures to ensure data protection, security, and ethical conduct within the digital payments’ ecosystem.

Advanced risk management solutions for mitigating credit risk in financial operations

Advanced risk management solutions are essential for mitigating credit risk in financial operations, particularly in today's volatile economic environment. This Review explores the innovative approaches and technologies being utilized to enhance credit risk management and safeguard financial institutions against potential losses. Credit risk, the possibility that a borrower will default on their obligations, poses a significant threat to financial stability. Traditional methods of assessing and managing credit risk, such as credit scoring and historical data analysis, are no longer sufficient to address the complexities of modern financial markets. Advanced risk management solutions offer more robust and dynamic tools for identifying, assessing, and mitigating credit risk. One of the key advancements in this field is the integration of big data and machine learning algorithms. By analyzing vast amounts of data from diverse sources, financial institutions can gain deeper insights into borrower behavior, market trends, and economic indicators. Machine learning models can predict default probabilities with greater accuracy, allowing for proactive risk mitigation strategies. Additionally, real-time risk monitoring systems have become increasingly prevalent. These systems provide continuous oversight of credit portfolios, enabling financial institutions to detect early warning signs of potential defaults and take timely action. Advanced analytics and visualization tools facilitate the identification of emerging risks and the implementation of targeted interventions. Another crucial component of advanced risk management solutions is the use of stress testing and scenario analysis. These techniques simulate various economic conditions and assess the impact on credit portfolios, helping financial institutions prepare for adverse scenarios and develop contingency plans. Furthermore, blockchain technology is emerging as a promising tool for enhancing transparency and reducing fraud in credit transactions. By providing a secure and immutable record of credit histories and transactions, blockchain can improve trust and reliability in credit assessments. In conclusion, advanced risk management solutions are transforming the way financial institutions mitigate credit risk. By leveraging big data, machine learning, real-time monitoring, stress testing, and blockchain technology, financial institutions can achieve more accurate risk assessments and implement more effective risk mitigation strategies. These innovations not only enhance the stability and resilience of financial operations but also contribute to a more secure and trustworthy financial system.

Implementation of A Deep Learning Algorithm for Fraud Detection Based on Credit Transactions

Online transactions using credit cards are being more reliable and efficient method followed by most of the users. In the same way, the fake transaction and scam occurring during the credit card transactions are increasing day by day. This scam not only steal user’s money but also misuse their personal details. Manual detection of these scam may be a tedious process, so this detection must be a deep learning method for the fastest and effective method of detection. This paper proposes a methodology of deep learning algorithm involving Multi Layer Perceptron (MLP) to prevent the users from fraud transaction. The data which is trained form a neural network and the test data is evaluated to define the classification, whether the data is fraud or verified data. This work involves data processing, data cleaning and data visualization of the data transaction. At the end of the process, the detected results undergo validation and model evaluation. Data visualization uses libraries from Matlab to learn the data, which is used in the data classification.

Optimizing the Security of Letter of Credit Transactions: Application of Blockchain Technology in Reducing the Risk of Fraud in Banking

Letter of Credit (LC) transactions play a vital role in facilitating international trade, but are vulnerable to various forms of fraud such as forgery of documents and manipulation of information. In the banking context, ensuring the security of LC transactions is an urgent challenge. This research aims to investigate the potential of applying blockchain technology in improving the security of LC transactions and reducing the risk of fraud in the banking sector. This research is included in descriptive quantitative research. This research was conducted at Banks in DKI Jakarta. The population in this research are customers who use Letter of Credit transactions. The sampling technique in this research is purposive sampling so that in this research the research sample was 100 customers who used letter of credit transactions. The data analysis technique in this research uses Partial Least Square (PLS). The research results show that blockchain technology has great potential to increase the security of LC transactions through aspects such as high data security, transparency and auditability, as well as automation through smart contracts. With proper implementation, blockchain technology can help reduce the risk of fraud, increase operational efficiency, and build trust in international trade. This study contributes to the understanding of the potential application of blockchain technology in the global financial context and highlights the importance of cross-sector collaboration to address transaction security challenges.

Publicly available information on the creditworthiness of individuals in the Russian empire (historical and legal analysis)

Due to the establishment of the legal institute of reference offices on creditworthiness in the Russian Empire, entrepreneurs had the opportunity to order a certificate of creditworthiness of a potential counterparty; however, for objective reasons, this method was quite long in time. The information reflected in the certificate was confidential. The 19th – the early 20th centuries’Russia lacked the unified state public register of information characterising the financial reliability of trade turnover participants. The author investigates publicly available sources of obtaining data on the creditworthiness of the counterparty, the pre-revolutionary period merchants and industrialists could use to make a decision on concluding a contract, including with the terms of a credit transaction. The publicly available information on the creditworthiness of clients in the Russian Empire is information collected and stored in reference offices on creditworthiness, provided by the latter in various formats to interested parties. The article examines the methods of providing entrepreneurs with information borrowed from foreign practice and used in Russian trade. An important source of acquiring information about creditworthiness was data obtained from mass media. At the same time, the risks of the reliability of this information were assumed by the person using this information. When writing the article, the author studied a large array of periodicals, used scientific works of scientists of the pre-revolutionary period, and also studied archival documents, some of which had not been studied in the legal doctrine before.

BUNGA YANG DIBOLEHKAN (PEMIKIRAN SYAFRUDDIN PRAWIRANEGARA)

ABSTRACTIslamic economist Syafruddin Prawiranegara holds the perspective that Islamic-based economic systems and bank interest rates are not inherently contradictory. Bank interest rates differ from riba (usury) in Islam; reasonable bank interest rates are not synonymous with riba. Riba, in Syafruddin's view, refers to profits gained from exploitative and deceptive transactions, which can occur in both cash and credit transactions. Sharia economic systems are essentially economic activities guided by Islamic norms. Among these norms are equality and honesty. Therefore, according to him, Islamic Economic Systems may involve the accrual of interest, as long as it is reasonable. Conversely, in a non-interest economic system, riba may still occur if exploitation and deception persist within it. The purpose of this research is to comprehensively examine Syafruddin Prawiranegara's perspective on bank interest rates. This study employs a non-participant qualitative method, adopting a literature review approach. The results of this research elaborate on the biography of Syafruddin Prawiranegara, the concept of religion and economics in his perspective, and his thoughts on bank interest rates and riba.Keywords: Sharia Economics; Islam; Bank interest; Syafruddin Prawiranegara

The ‘consequence of an advertisement’: intermediation in the eighteenth-century credit market

Abstract This article examines the changing nature of intermediation in the market for private credit. Intermediaries used the impersonal medium of newspaper advertisements to demonstrate the value of their role and their abilities in a credit market apparently still reliant on personal reputation and standing. They then sought to turn these initial, impersonal, transactional contacts into more personal, profitable relationships. While this use of advertisements suggests a move towards a market in which credit transactions were less personal, the realities of contact in the increasingly fragmented provision of private finance were more complex and social relationships remained important in intermediation.

Institutional investors in the Portuguese credit market (1550–1800): The case of the Misericórdias

AbstractThis article questions the drivers behind the distribution of savings in different capital markets in Portugal between 1550 and 1800. A novel dataset of credit transactions, interest rates and debt service documents a shift in the lenders' investment behaviour. By 1712, one of the leading institutional creditors—the Misericórdias—had ceased to allocate funds to the sovereign debt market. Data reveal that this disinvestment was neither related to the poor performance of debt service nor to the lure of potentially higher returns on private credit. We argue that changes in the rationales for issuing debt justify the drop in the number of institutional investors in the public credit market, and this correlates with the heavy allocation of funds into private lending.

Ensuring Legal Certainty: The Disbursement of Bank Guarantees

The precautionary principle, commonly associated with lending, extends beyond credit transactions to include other banking services such as bank guarantees. Bank guarantees serve as a form of debt guarantee provided by banks to their customers. This article addresses concerns related to the disbursement of bank guarantees during disputes and emphasizes the importance of customer protection in this context. The method employed is a normative juridical approach, incorporating conceptual, statute, and philosophical considerations. The findings reveal that the application of the Precautionary Principle in the Financial Services Authority Regulation (POJK) Number 18/2016 is evident through the inclusion of "Risk Management" provisions. In line with the Precautionary Principle, banks are advised to postpone disbursement when a legal dispute arises between the beneficiary of the bank guarantee and the customer who applied for it. To prevent controversies arising from bank guarantee disbursements, it is recommended that Bank Indonesia or the Financial Services Authority (OJK) establishes regulations specifically addressing the disbursement process for bank guarantees. This regulatory framework would contribute to the effective implementation of the Precautionary Principle in the context of bank guarantees.

ANALISA PEMBAYARAN INTERNASIONAL MELALUI LETTER OF CREDIT TERHADAP PERDAGANGAN EKSPOR BATUBARA PADA PT. MANDIRI INTIPERKASA

Analysis of International payments through letter of credit on coal export trade at PT. Mandiri Intiperkasa. Discusses coal export payment procedures using Letters of Credit. The research used is descriptive qualitative research. The data collection techniques used in preparing this thesis were direct observation, interviews and documentation. The results of the research are that international payments use letters of credit in theory in Amir MS's book and in reality in PT. Mandiri Intiperkasa is in compliance. Letters of Credit are safe for both parties. This has been required by the government for coal mining companies to use Letters of Credit in coal commodity export transactions. This is required because it supports the country's foreign exchange. It is hoped that PT. Mandiri Intiperkasa to have books related to international trade, especially coal. To increase information for employees regarding the payment system using a Letter of Credit.

Law And Ethics Of Debt: Strengthening Understanding Of Members Of The Special Branch Of Muhammadiyah Malaysia

To fulfill the needs of life in Malaysia, some members of the Muhammadiyah Special Branch Malaysia conduct debt and credit transactions. The problem is that many must realize that laws and ethics must be followed. They do not know that usury, which Allah and His Messenger prohibit, is found in many debt transactions. The activities in this International Community Service scheme are carried out with the aim that their understanding of the laws and ethics of debt and credit according to Islamic Sharia increases. The implementation method is through intensive study in material presentation, discussion and case study on the law and ethics of debt. In addition, MUI Fatwa No. 1 of 2004 on Interest and Fatwa of the Tarjih and Tajdid Assembly of the Muhammadiyah Central Leadership No. 08 of 2006 on the Fatwa Haram on Bank Interest were discussed. The community service was conducted at the Malaysian PCIM office in Kuala Lumpur. The members of PCIM Malaysia benefited greatly because their understanding of the laws and ethics of accounts receivable according to Islamic Sharia increased and became stronger

Legal Consequences of Unlawful Acts against Banks in Letter of Credit Transactions

This study aims to understand and examine the legal consequences of unlawful acts against banks involved in L/C transactions. This study uses a normative legal research method. The collected legal material is then qualitatively analyzed to describe the problem and answer the study objectives. The results show that Board Member Regulation Number 23/21/PADG/2021 demonstrates Indonesia’s legal adaptation to UCP 600 as the international standard in L/C transactions. UCP 600 emphasizes the principle of independence about the Bank’s role, which is limited to verifying L/C transaction documents. However, there is a risk of L/C Fraud, where the Issuing Bank has the right not to pay the Exporter if there are indications of fraud, by implementing the “Fraud Rule.” The approach to L/C Fraud varies across jurisdictions; in countries with civil law systems, such actions are often considered unlawful acts, while in countries like the United States, they are viewed as criminal acts. Therefore, it is recommended that relevant stakeholders enhance their understanding and compliance with UCP 600. Issuing Banks and Advising Banks need to develop more effective mechanisms for detecting and preventing L/C Fraud, considering the different legal approaches to L/C Fraud in various jurisdictions. Training staff on the nuances of L/C Fraud and how to identify it is also essential. Furthermore, resolving L/C disputes through civil law channels is considered more appropriate, given these transactions’ commercial and contractual nature. Stakeholders should collaborate to strengthen the legal framework and procedures that support the integrity and security of L/C transactions and to align practices with international standards to enhance trust and security in international trade.