Development Of Financial Institutions Research Articles

CAPITAL STRUCTURE AND THE PERFORMANCE OF DEVELOPMENT FINANCE INSTITUTIONS IN NIGERIA

The study investigated the effect of capital structure on the performance of selected Development Finance Institutions (DFIs) in Nigeria. The study specifically examined the effect of Total Debt to Total Assets (TDTA) on performance of selected of development finance institutions in Nigeria; and ascertained the effect of Total Debt to Total Equity (TDTE) on performance of selected development finance institutions in Nigeria. The study adopted an ex-post facto research design and data were collected from published annual financial records of the selected DFIs on both TDTA and TDTE, the independent variables and Return on Assets (ROA), the dependent variable, for a period of ten (10) years (2013-2022). The population of the study composed of seven (7) national DFIs namely: Central Bank of Nigeria (CBN), Bank of Agriculture (BOA), Bank of Industry (BOI), Development Bank of Nigeria (DBN), Federal Mortgage Bank of Nigeria (FMBN), Nigeria-Export-Import Bank (NEXIM) and the Infrastructure Bank Plc (IBN). The study sampled four (4) national DFIs using a purposive sampling technique, including CBN, BOI, FMBN and NEXIM. Computation of the relevant ratios were done for the independent variables (TDTA and TDTE); and the dependent variable (ROA). Data analysis was done using multiple regression and the econometric technique of Dynamic Ordinary Least Squares (DOLS) with the aid of E-Views Version 13. The study found that TDTA has a negative but significant effect on ROA, indicating that a percentage change in TDTA leads to lower ROA by 0.071551 and TDTE has a positive effect of TDTE on ROA, showing that a percentage change in TDTE will significantly increase ROA by 0.001696. The study concluded that the investigated DFIs have low equity capital which seems to hinder their ability to attract large loans for operations. The study recommended amongst others that DFIs should maintain a balanced total debt to total assets (TDTA) and ensure the regular monitoring of the debt-to-asset ratio to ensure it remains within a healthy range which will help maintain a balance between leveraging and risk.

Innovative Financial Products And Services For Underserved Communities

This paper provides an in-depth exploration of innovative financial products designed to meet the unique needs of underserved populations in the United States. It systematically examines how Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) are important in the delivery of these specialized financial services. By focusing on microloans, credit-building loans, and affordable housing financing, the paper elucidates the transformative potential of these financial products in enhancing financial inclusion and increasing economic empowerment within marginalized communities. The analysis shows how microloans facilitate entrepreneurship and poverty alleviation while credit-building loans serve as a tool for establishing and improving credit histories. It addresses innovative financing models for affordable housing by illustrating their impact on community stability and development. The role of CDFIs and MDIs is examined to reveal their unique contributions and challenges in providing accessible financial services to underserved groups. The paper explores implementation strategies and policy recommendations, emphasizing the need for a comprehensive approach that leverages technology, ensures strong partnerships with government and nonprofit entities, and addresses regulatory barriers. It entails the importance of measuring the impact of financial inclusion initiatives to ensure their effectiveness and sustainability. The paper calls for concerted action from policymakers, financial institutions, and community organizations to collaborate in advancing financial inclusion efforts. By harnessing the insights and strategies outlined, stakeholders can enhance the reach and effectiveness of financial products, ultimately driving economic growth and opportunity for all

Balancing policy objectives: Cambodia's COVID‐19 emergency cash assistance scheme for workers

AbstractWelfare programs in emerging economies are, in most cases, highly selective. This article illustrates this point by exploring Cambodia's emergency cash assistance scheme coverage for workers affected by the COVID‐19 pandemic. Drawing on policy analysis and interviews with government officials, industry representatives, and garment and tourism unions, it analyzes the level of benefit and efficacy of the initiative for different groups of workers. Based on this analysis, we find that garment factory and tourism workers received better support than workers in other sectors as a consequence of industry lobbying and strategic decision‐making on the part of the government designed to mitigate the impact of the pandemic on those sectors. Our analysis also reveals, however, that the relatively informal nature of even formal‐sector workplaces in Cambodia meant that the scheme's impact was highly varied even among these targeted groups of workers. We conclude with a discussion of the findings' broader implications.Related ArticlesAsongu, Simplice, and Nicholas M. Odhiambo. 2023. “The Effect of Inequality on Poverty and Severity of Poverty in Sub‐Saharan Africa: The Role of Financial Development Institutions.” Politics & Policy 51(5): 898–918. https://doi.org/10.1111/polp.12558.Lachapelle, Erick, Thomas Bergeron, Richard Nadeau, Jean‐François Daoust, Ruth Dassonneville, and Éric Bélanger. 2021. “Citizens' Willingness to Support New Taxes for COVID‐19 Measures and the Role of Trust.” Politics & Policy 49(3): 534–65. https://doi.org/10.1111/polp.12404.Onyango, Gedion, and Japheth Otieno Ondiek. 2022. “Open Innovation during the COVID‐19 Pandemic Policy Responses in South Africa and Kenya.” Politics & Policy 50(5): 1008–31. https://doi.org/10.1111/polp.12490.

Perverse Development-Examining German Development Finance Institutions’ Engagement in Private Healthcare Sector in India

Perverse Development-Examining German Development Finance Institutions’ Engagement in Private Healthcare Sector in India

Green and global? A policy frame analysis of the European Investment Bank’s re-branding from 2018–2023

ABSTRACT This article examines the European Investment Bank’s (EIB) positioning and response to reforms in the European development financing landscape. These reforms aimed to enhance the role of Development Finance Institutions in promoting external investment, threatening the EIB’s privileged access to EU budgetary resources. The EIB responded by creating “EIB Global” and rebranding as the European climate bank. Through framing analysis, this article studies the EIB’s discourse supporting these reforms. It concludes that in striving for institutional survival, the EIB has unintentionally created a situation in which its development and green finance mandates now compete for attention.

Reforming Climate and Development Finance for Clean Cooking

A transition to clean fuels and technology for cooking is increasingly recognised as a cornerstone of sustainable development. However, sufficient, appropriate, affordable finance to support the transition is lacking. Grounded in primary data collection via expert interviews, this study’s research objective was to critically assess development finance institutions’ (DFIs) delivery of climate and development finance to address cooking poverty. Interview findings underscore DFIs’ important role in the transition, including to create the ecosystem conditions conducive to sustained investment. However, as a group they are not demonstrating the risk appetite and financial solutions that clean cooking markets need. Nor are they operating with the agility and flexibility required for rapid scale-up. Consequently, DFIs are not optimally fulfilling their mandates to create additionality and mobilise private capital in these markets. Interviewees call for DFIs to reconsider their approach, and we rely on these findings to posit a theory of change for clean cooking finance.

Asymmetric Effects of Development Finance Institutions Funding (DFIs) on Investment in Zimbabwe: A Futuristic Perspective

Introduction - This study aimed to explore the anticipated asymmetric effects of developmental finance institutions (DFIs) funding on investment in Zimbabwe. Given the volatile nature of development finance, Zimbabwe has faced challenges in effectively mobilizing aid, often struggling to persuade donors due to government spending plans and political factors. The research sought to investigate the potential asymmetrical linkages between DFIs funding and investment in Zimbabwe. Methodology: Model and Variables - To examine the futuristic asymmetric relationship between DFIs funding and investment in the Zimbabwean economy, a non-linear NARDL modelling approach will be employed. This methodology will estimate the projected non-linear co-integrating association between positive and negative shocks to DFIs funding and investment. The data set consisted of projected annual macroeconomic variables for Zimbabwe obtained from world bank and IMF. Results - In the short run, it was found that both positive and negative shocks influence future investment, with negative shocks expected to have a larger effect. These negative shocks arise from economic downturns or external shocks, while positive shocks could result from increased funding or favourable policy changes. In the long run, it was found that positive shocks to DFIs funding have a positive impact on investment, leading to increased economic growth and development. Conclusion and Recommendations - Based on the results, DFIs funding should exhibit an asymmetric relationship with investment in Zimbabwe. It is crucial for the government of Zimbabwe to proactively plan for these anticipated asymmetric effects and develop strategies to maximize the benefits of DFIs funding. By implementing the recommendations, Zimbabwe can be able to ensure a more favourable environment for future DFIs funding, fostering sustainable investment and economic growth.

ZAKAT DISCLOSURE INDEX BY ISLAMIC BANKS AND DEVELOPMENT FINANCIAL INSTITUTIONS IN MALAYSIA

Paying zakat and disclosing it transparently to stakeholders is one of the ways to demonstrate the Islamic ethical value and accountability of Islamic finance institutions (IFIs). Nevertheless, comprehensive zakat information disclosure practices by Islamic banks (IBs) and Development Financial Institutions (DFIs) have received less attention. Therefore, this study was conducted to develop a comprehensive Zakat Disclosure Index (ZDI) for IBs and DFIs and measure the ZDI level of these institutions. Content analysis was performed through financial statements, annual reports, annual integrated reports and annual sustainability reports for four consecutive financial years from 2016 to 2019. The entire population of 16 IBs and 6 DFIs was selected. The ZDI was developed with two categories based on the liability of paying zakat. The scoring was divided into three groups: (i) mandatory financial information versus voluntary financial information versus mandatory non-financial information versus voluntary non-financial information; (ii) mandatory versus voluntary; and (iii) financial versus non-financial. The result showed that the overall disclosure level was at 60 percent, where mandatory disclosure was at 43 percent and voluntary disclosure was at 17 percent, while for financial and non-financial information, the scores were not much different at 25 percent to 33 percent. The study’s implication lies in establishing astandardised zakat index, enhancing comparability among reporting entities. Furthermore, the study holds importance for regulators as it aids in assessing the sufficiency of existing regulations and guidelines. It can guide regulatory actions to uphold the principles of maqasid shariah in reporting practices.

Scaling up the practice of water operators’ partnership (WOP) and its linkages with investment programmes

ABSTRACT Funding is limiting the extent to which water operators can engage in helping one another to increase access to water and sanitation services. Besides capacity development support, Water Operators' Partnerships are increasingly supporting mobilisation, implementation and sustainability of investment programmes. This paper aims to deepen the understanding of the current funding scenario for Water Operators` Partnerships, identify obstacles, and explore possibilities to promote the mobilisation of additional funds. It does so by analysing costs, sizes, sources of funding and the co-existence of WOPs with investment programmes. Some significant findings include the increasing recognition of the positive influence of WOPs not only by donors but also by development financial institutions, the emergence of WOP-dedicated programmes, the great potential of funds coming from decentralised development funding mechanisms, and the multiple scenarios in which WOPs and investment programmes co-exist. Salient challenges are the low reach of information related to WOP outcomes and the low feasibility of WOPs being funded by the technical assistance component of investment programmes. A remarkable highlight is the invitation from development financial institutions to WOP proponents to join forces in identifying ways to secure the best alignment and synergies between WOP support and investment programmes.

Exploring ‘Alternatives' in the Consumer Credit Market: Community Development Finance Institutions in the United Kingdom

Exploring ‘Alternatives' in the Consumer Credit Market: Community Development Finance Institutions in the United Kingdom

The European Investment Bank in Sub-Saharan Africa: constrained expansion

ABSTRACT Exploring the European Investment Bank’s (EIB) largely unexplored external operations, this article provides the first comprehensive analysis of the EIB’s activity in Sub-Saharan Africa (SSA) from its inception in 1957 up to 2024. The contribution enriches the discourse on re-aligning the European Financial Architecture for Development, by outlining the EIB’s inter-institutional considerations and its policy implications for both EU and SSA stakeholders. The findings reveal a “constrained expansion”, shaped by a mix of enablers such as EU geopolitical interests and a financialization-centric vision of development, and constraints including the Bank’s risk-aversion and increased competition with other development finance institutions.

Do higher government spending, financial development, and trade reduce income inequality in low‐income countries? A Bayesian perspective

AbstractWe employed the Bayesian method to investigate the impact of government spending, financial development (measured by bank credit), and trade on income inequality reduction in 66 low‐income countries (LICs) across Africa, Asia, America, and Europe from 2000 to 2018. Controlling inflation and unemployment, our results indicate that trade and inflation exacerbate income inequality in LICs, while financial development and government spending have no impact on reducing income inequality in these countries. Furthermore, the findings show that real GDP per capita reduces income inequality in LICs. To ensure the robustness of our results, we also conducted frequentist quantile regression, which yielded consistent findings that financial development, government spending, and trade do not reduce income inequality in LICs. We further discuss the potential channels through which trade, financial development, inflation, and government spending contribute to income inequality in LICs, and provide policy implications based on the empirical evidence.Related ArticlesAdegboye, Alex, Kofo Adegboye, Uwalomwa Uwuigbe, Stephen Ojeka, and Eyitemi Fasanu. 2023. “Taxation, Democracy, and Inequality in Sub‐Saharan Africa: Relevant Linkages for Sustainable Development Goals.” Politics & Policy 51(4): 696–722. https://doi.org/10.1111/polp.12547.Asongu, Simplice, and Nicholas M. Odhiambo. 2023. “The Effect of Inequality on Poverty and Severity of Poverty in Sub‐Saharan Africa: The Role of Financial Development Institutions.” Politics & Policy 51(5): 898–918. https://doi.org/10.1111/polp.12558.Polacko, Matthew. 2023. “Turning Off the Base: Social Democracy's Neoliberal Turn, Income Inequality, and Turnout.” Politics & Policy 51(4): 538–68. https://doi.org/10.1111/polp.12550.

Prospects and challenges of achieving structural transformation in Africa through the African Continental Free Trade Area

The African Continental Free Trade Area (AfCFTA) agreement seeks to integrate markets in Africa into one large market. With the growing concerns about continental integration, this study identifies prospects and challenges of achieving structural transformation in Africa through the AfCFTA. The study employs the Interactive Structural Modelling technique, which helps to develop a contextual relationship between the factors in terms of their driving power or dependence power. The results indicate that unequal trade and investment opportunities, poor infrastructure, poor access to development finance, and the degree of industrialisation have a high driving power, hence a greater potential to create a ripple effect on other factors associated with African integration. Based on the findings, this study recommends that a platform be created within the agreement where these challenges can be tackled. In this view, the establishment of various development finance institutions monitored and facilitated by the AfCFTA affiliates, could be explored.

ACTIVATING PRO-ENVIRONMENTAL BEHAVIOUR AT THE WORKPLACE THROUGH GREEN HUMAN RESOURCE MANAGEMENT PRACTICES: THE ROLE OF PERCEIVED INNOVATION CHARACTERISTICS

This study explores the influence of seven green human resource management (GHRM) practices and perceived innovation characteristics (PICs) on employees' pro-environmental behaviour (PEB) at the workplace. It bridges a gap in research that combines the Ability-Motivation-Opportunity (AMO) and Diffusion of Innovation (DOI) theories. Utilizing partial least squares structural equation modelling (PLS-SEM) and survey data of 366 employees from six Malaysian development financial institutions, the findings suggested that four out of seven GHRM practices have a positive direct effect on PEB. Additionally, PICs mediate the relationship between four GHRM practices and PEB, suggesting the importance of employee perceptions of GHRM practices in fostering workplace PEB.

Role of Development Banking in Economic Growth in Kenya

Purpose: This study delineates the impact of development banking on Kenya's economic growth. The current study adopted a quantitative and exploratory research design.
 Materials and Methods: The study used a quantitative research design. Secondary data was utilized in this study. The data was collected from the financial statements of development banks in Kenya. The target population was 6 development banks in Kenya. The study then progressed to more complex regression analysis, where financial performance ratios and percentages for predictor factors formed the basis of the analysis. The study focused on 6 development financial institutions operating in Kenya.
 Findings: The findings (β=0.1153, p=0.0056), reveal that development banking had a positive and significant effect on economic growth. This infers that an improvement in development banking by one unit would lead to an improvement in economic growth by 0.115 units. The investigation substantiates a tangible and statistically significant correlation between the maturation of the development banking sector and the economic growth spectrum in Kenya.
 Implications to Theory, Practice and Policy: Policymakers in Kenya should work to maintain a stable regulatory system that enhances the role of the banking system in stimulating economic growth. The study emphasizes the need for a stable regulatory environment and well-considered interest rate policies to mitigate adverse economic impacts. Additionally, the study advocates for a pro-poor banking approach to reduce wealth disparities and boost economic growth through improved savings and customer deposits in banks. the banks.

Donor Coordination and Evidence Uptake in Early Childhood Education Policy

ABSTRACT In this reflective piece, representatives of the agencies that funded and managed the Early Learning Systems Research program – the UK Foreign, Commonwealth and Development Office (FCDO) and the World Bank – take stock of recent global developments in research, policy, and financing by donors for early childhood education (ECE). A rapid increase in research on early childhood interventions has secured a consensus that in vesting in early matters for later outcomes in life. In recent years, development finance institutions have taken unprecedented steps to incorporate ECE into their policies and approaches, have helped build research capacity, and fostered communities of practice on ECE. Despite these developments, however, the share of official development assistance (ODA) for ECE remains extremely low. Limited prioritization of ECE by donors may be reinforced by a persistence of low demand for ECE financing from governments and differences in delivery mechanisms between ECE and other levels of education. The authors conclude with considerations for researchers, practitioners, and policymakers interested in increasing donor finance for ECE.

ПРОЕКТ USAID «ІНВЕСТИЦІЇ ДЛЯ СТІЙКОСТІ БІЗНЕСУ»: ГРАНТИ ДЛЯ СЕРЕДНЬОГО ТА ВЕЛИКОГО БІЗНЕСУ

The article examines the USAID Project “Investments for business sustainability”, in particular opportunities for large business companies. It was emphasized that in 2024, the IBR Project will implement its tasks through the provision of grants for joint investment and technical assistance to Ukrainian enterprises with an annual turnover of 8 million US dollars and more. “Co-investment” means that, in addition to grant funds, the potential grantee must contribute its own or other (non-grant) funds or resources that are clearly tied to the implementation and costs of the proposed concept. The study demonstrates the conditions for receiving grant assistance, and examines the eligibility criteria. And also, it is emphasized: in order to receive a grant of up to 2,000,000 US dollars, organizations must have a successful business model, take into account standards and trends, as well as demonstrate management skills to adapt new practices and capital investments. Emphasis is placed on the fact that the IBR Project determines that the minimum multiplier of sales volumes compared to the amount of the IBR Project grant must be at least five (for example, each USD 1 of the grant should lead to an increase in sales and exports of at least USD 5). Development finance institutions, institutional investors, direct investment funds, venture capital funds, angel investors, incubators/accelerators, business/professional associations, as well as other suppliers and consortia of investment services can also apply for a grant under the USAID Project “Investments for Business Sustainability “. It was concluded that the USAID Project “Investments for business sustainability” is an important initiative to support business sustainability in Ukraine, aimed at stimulating economic development, increasing sales and exports, as well as creating new jobs. Joint investments and technical assistance from grants can contribute to the effective financing and development of enterprises, contributing to their competitiveness and compliance with international standards.

Is Disaggregate Form of Information Value Relevant: Evidence from Indian Listed Companies

Despite its scarcity, capital is necessary for a country’s economic development. To channelise capital foreign investment, financial intermediaries such as development banks, commercial banks, investment and financial institutions, insurance and investment banks are required. The expansion of the capital market is required to encourage and steer capital formation. The capital market encourages investment while also bringing vigour and dynamism to the country’s business organisations. The availability of accounting information and financial reporting is crucial for the effectiveness of capital markets, efficient resource allocation, capital information and economic development. Prior researchers prove the relevance of accounting information as a predictor of changes in stock behaviour in particular and growth of stock market in general. To augment this aspect the relevance of segment wise information provided by companies becomes important to be studied. Hence, the present study examines the influence of segment reporting on value relevance. Stock price after 90 days from the end of the financial year has been taken as a dependent variable and various segment related dimensions as independent variable for the period 2016–2017 to 2021–2022. It employed Ohlson (1995) model and indicates that Segment reporting information has significant and positive influence on value relevance thus it clearly indicates that investor’s view segment information while making investment decisions.

EXPLORING THE BANKERS’ PERSPECTIVES ON SHARIAH AND OPERATIONAL ISSUES OF RESTRUCTURING AND RESCHEDULING IN ISLAMIC FINANCING DURING COVID-19 PANDEMIC

The Central Bank of Malaysia ordered all banks to give an automatic six months moratorium or loan or financing deferment starting April, 1 2020 to their customers during the Covid-19 pandemic since many customers had difficulties paying their monthly financing obligations to banks. Thus, the objective of this paper is to explore the bankers’ perspectives on Shariah and operational issues arising in Islamic banks in implementing moratorium which involves restructuring and rescheduling financing facilities during Covid-19 pandemic. At the same time, the methods these bankers used to manage the issues are also highlighted in this paper. A qualitative analysis is applied in this paper where the researchers conducted interview sessions with the Head of Shariah Department from an Islamic banking window and another from the Development Financial Institution which offers Islamic banking products and services. This study's findings show that there are certain perspectives from bankers in dealing with Shariah issues regarding restructuring and rescheduling during moratorium such as the issue of qalb al-dayn (debt restructuring), capitalization of accrued profit in the financing facilities as well as the operational issues related to the system and people. It can be deduced then that all Islamic banks were doing extremely well in their steadfast endeavors towards offering remedies to the issues faced for the sake of the overall improvement of Islamic banks in the implementation of restructuring and rescheduling of financing facilities as outlined by guidelines or Resolutions issued by the Shariah Advisory Council of Bank Negara Malaysia.

SUSTAINABLE FINANCING OF MICRO, SMALL AND MEDUIM ENTRISE (MSMEs) THROUGH ISLAMIC BANKING PRODUCTS IN NIGERIA, KATSINA STATE

The Micro, Small and Medium Enterprises (MSMEs) play important role on employment creation, manpower and skills development, industrial development, poverty reduction and economic growth and thereby recognized as engine for socio-economic transformation in both developing and emerging economies of Africa and Asia respectively. However, these enterprises are facing pyramid of problems, several among them though not exhaustive include: inadequate capital, managerial inefficiency and inaccessible credit facilities from formal financial institution. The problems of inadequate capital and inaccessible credit facilities from the conventional banking sector are the most critical. The MSMEs are lacking access to institutional credit at both commercial and development financial institutions; considered high credit risks by the financial institutions. Conventional banks are also characterized with the receipt and payment of interest; associated with non-Shari’ah compliant financial products. Hence, the need for ethical banking system; considered competitive and alternative to conventional banking products, more responsive to the environment of the study (Katsina state), which is referred to Islamic banking. This paper is motivated to discuss the Islamic banking products and their efficacy towards attainment of sustainable financing of MSMSEs in Nigeria, Katsina state. The tools of the research are basically analysis on the subject matter of the study with a collection from secondary data. Furthermore, the research paper is relevant to Islamic (commercial and micro finance banks, saving and credit multipurpose cooperative societies) financial institutions. The knowledge, skill and abilities of the management and staff of those institution as well as other stakeholders will be enhanced. It is also serve as a good reference for academics and therefore, advancing the frontier of knowledge in the field of study.