Loan Disbursement Research Articles

GROWTH OF SHGS AND EMPOWERMENT OF WOMEN

Micro finance through Self Help Group (SHG) has been recognized internationally as the modern tool to combat poverty and for rural development.Micro finance and SHGs are effective in reducing poverty,empowering women and creating awareness which finally results in sustainable development of the nation.Micro finance define as efforts to improve poor people's access to loans and saving services may be the fastest growing and most widely recognized anti-poverty too. Micro finance includes basic financial services including small loans,savings accounts,funds transfers and insurance.A long side non-financial service such as business training Micro finance assists people living in poverty who wouldn't usually qualify for regular banking services because they have no form of collateral or formal identification.An attempt is made here to examine the impact of the microfinance on the development of the Self-Help Groups in India. The total number of self-help groups which have maintained savings with banks is 100 lakhs during 2018-19 but only 26.98 lakhs i.e 26.95 percent of the SHGs have obtained credit from the financial institutions.Out of 74.62 lakh SHGs,only 11.96 lakhs i.e. 16.03 percent of the SHGs have got micro-credit from the institutional credit agencies during 2010-11. The above analysis indicates that the number of SHGs which got micro credit has increased from 16 percent to 27 percent i.e only 11 percentage points increased in 2018-19 over 2010-11.About 73 percent of the SHGs are out of the purview of the public financial institutions. Majority of the women members of SHGs are away from the institutional credit agencies. These marginalized women have to depend on informal financial services for their credit needs. So that the financial informal sector (mostly moneylenders)has continued to rule in the rural economy.There is a need to break the monopoly of door step availability of credit to these marginalized sections by the informal sources of credit.The credit needs of the women members have enormously increasing for the last two decades.The average loan disbursement per SHG has increased from Rs.1.22 lakhs during 2010-11 to Rs.2.16 lakhs during 2018-19.This is inadequate to meet the credit requirements of the members in the SHGs.Hence it should be made four to five times of the micro credit per SHGs.The bank loans are not regularly paid by the members of the SHGs. Hence, the amount of loan outstanding has continuously increased since 2010-11.It is evident from the fact that the average outstanding bank loans against SHGs shows higher level.The average outstanding per SHG has increased from Rs.65,224 during 2010-11 to Rs.171543 during 2018-19,shows two and half-fold increase. As a result of it the overall NPA rate in bank loan to SHGs is steadily increasing since 1910-11. However, the overall NPA rate in bank loan to SHG is 5.19 percent as on 31-03-2019 registering a fall of 93 basis points from the previous level of 6.12 percent.The above analysis reveals that the steady declining the rate of NPA is indicating the recovery of loans made of SHGs is improving during the last few years

A Study on Performance of the Karnataka State Cooperative Agriculture & Rural Development Bank Ltd., Bangalore in women development cell to promote entrepreneurship

The Karnataka State Co-operative Agriculture and Rural Development Bank Limited is the apex bank of all the primary co-operative agriculture and rural development banks in the state. All the PCARD Banks in the state are affiliated to it. The KSCARD Bank provides financial accommodation to the PCARD Banks for their lending operations. In order to quick sanction and disbursement of loans and supervision over the PCARD Banks the KSCARD Bank has opened district level branches. Bank has established Women Development Cell to promote entrepreneurship among women in 2005. The Bank is identifying women borrowers in the rural areas by assigning suitable projects to motivate their self-confidence to lead independent life. Progress made in financing women entrepreneurs women.

CAPITAL FINANCING AND RE-VITALIZATION OF MICRO ENTREPRENEURSHIP: A PERFORMANCE APPRAISAL OF PRADHAN MANTRI MUDRA YOJANA (PMMY)

Rejuvenation of small and micro business units is a quintessential requirement for meeting the macro-economic goals of employment generation, financial inclusiveness and importantly the recovery of economic growth after economic slowdown spurred out of the pandemic. As per the study report published by Asian Development Bank Institute (2016), 78% of the finance used by MSMEs is carried out through informal sources and self-finance. Identifying the high degree of dependence of micro entrepreneurs especially in the rural India on informal financing avenues, the central Government of India officially launched the Pradhan Mantri MUDRA Yojana (PMMY) in 2015 with a vision to strengthen the institutional finance framework for ensuring the sustainability of entrepreneurial activities. The present paper is an attempt to bring out the progress assessment of PMMY scheme over the past five years across India. The analysis of different loan categories of schemes is done in order to understand the specific implications on the needs of the micro enterprises. The region wise analysis of the scheme with respect to the loan disbursement reveals that Southern region perform better over the past five years. The paper also throws light on the impact of PMMY in bridging the gender divide in the MSME sector by focusing on the utilization trends among women entrepreneurs regarding the Shishu, Kishore, and Tarun sub schemes under PMMY.

Optimalization of Loan Disbursement as a Solution

The Bina Seroja Credit Union Savings and Loan Cooperative has served members covering the Jakarta, Bogor, Depok, Tangerang and Bekasi (Jabodetabek) areas both in terms of deposits and loan distribution. It becomes two sides that must be balanced. The problem that occurs is that the distribution of loans to members is only 42% of the ideal ratio of 70-80%. This study aims to find out the formulations made and realized in the implementation in the last five (5) years. While the methods used are observations, interviews and questionnaires with the support of complete documentation. Based on the results of research by KSP CU Bina Seroja, it has actually made products both deposits and loans that vary to be able to attract the interest of its members. However, the number of loans disbursed in the last 5 (five) years has never reached more than 50%, even the last two years it was only 47% and dropped to 42%. The results of the respondents in choosing CU were the use of technology in serving members (33%), good communication (29%), and ease of obtaining loans (26%). Non-stock deposits collected from members reached an ideal ratio of 72%

Socio-economic determinants of smallholder rice (Oryza sativa) farmer’s access to Loan facilities, Abuja, Nigeria

This research study focused on socio-economic determinants of smallholder rice farmer’s access to loan facilities, Abuja, Nigeria. Multi-stage sampling technique was adopted to select 100 smallholder rice farmers. Primary sources of data were used. Data were collected from smallholder rice farmers with the help of well-designed and well-structured questionnaire. Statistical and econometric tools were used for data analysis. The results show that 82% of smallholder rice farmers were between 31 to 50 years of age. About 67% of smallholder rice farmers had access to loan facilities. Sources of loan obtained by smallholder rice farmers are formal (68.66%) and informal sources (31.34%). Averagely, smallholder farmers obtained 200, 754.72 Naira and 129,558.82 Naira from formal and informal sources respectively. Age (X1), farm size (X2), household size (X3), marital status (X5), access to extension services (X7) and membership of cooperative organizations (X8) were statistically and significant socio-economic factors influencing smallholder rice farmers access to loan facilities at (P<0.05). In addition, level of education was statistically and significant socio-economic factors influencing smallholder rice farmers access to loan facilities at (P<0.01).The constraints encountered by smallholder rice farmers in accessing loan facilities were: lack of collaterals for formal sources, cumbersome administrative procedures, high interest rate for formal sources, late disbursement of loan, long distant to financial institutions for formal sources, small amount of loan, and short re-payment period. The study recommends that loan with single digit interest rate should be provided by the government; cumbersome administrative procedures involved in accessing loan should be addressed, micro finance banks should be located in rural areas to meet the need of smallholder rice farmers loan demand; smallholder rice farmers should be encouraged to join cooperative organizations in order for them to have easy access to loan facilities.

Scheme-A Descriptive Analysis

For start-ups financial services by financial institution are many, even micro finance institutions are cresting access of credit to the business enterprises, start-ups, and rural poor people. Still our country having lack of financial resources as the businesses are not sufficient with the available resources. Micro units’ development and refinance agency was added to the list in the year 2015 with intent to deal in various financial products and services. Primarily it creates access of loans to the development of small enterprises. Government in all the three tires have been taken initiatives in order to develop the MSMEs in the country, as it provides not only employment opportunities but contributes to export revenue and growth in GDP as well. In India many of the states like Gujrath, Madhya Pradesh Tamil Naduhas developed because of SMMEs, however out of many schemes introduced by the central government for the development of SMMSEs PMMY is one of the scheme which is reached to the nook and corner of the country with its efficiency. Therefore present paper is an attempt to analyse financial assistance provided by the central government though this Yojana further comparative study has been done for two states by using published data of 5 years about disbursement of loans and sanctioned. During the Pandamic situation like COVID-19 also the small start ups have done their business successfully the reason for this may be timely availability of money through this scheme.

Explorations Into Loans Granted To Microfinance Institutions By Financial Entities: Observations From The Indian Context

The research paper seeks to analyze the patterns of loans disbursed to Microfinance Institutions (MFIs) by various financial entities over the past 15 years. To achieve this objective, the study utilizes secondary data from NABARD and establishes a comparative framework for the growth rate and percentage distribution of loans extended to MFIs by different commercial and public banks as well as financial institutions. The study's findings indicate that over the last 15 years, commercial banks have been the predominant contributors, accounting for 50 percent of the loans disbursed to MFIs. Additionally, the growth rate of loans disbursed by commercial banks has been the highest at 26.58 percent. However, the analysis in the study uncovers that the onset of COVID-19 led to a decrease in loan disbursements, followed by a subsequent increase in the post-pandemic period. This shift is attributed to the heightened demand for financial services from businesses and households that experienced economic setbacks during the pandemic

Constraints of Crop Credit Beneficiaries of Primary Agricultural Co-Operative Credit Societies in Dakshina Kannada District, Karnataka

Purpose: Farmers have great importance in our country. They give us the stuff to consume, thus we are dependent on them. Since everyone requires healthy food to survive, farmers must be trusted. The agricultural industry is crucial to the country's economic development, food security, creation of jobs, and reduction of poverty; particularly in rural areas. The primary agricultural co-operative credit societies are providing short-term and medium-term loans to the farmers. The primary reason behind the study is to understand the agricultural co-operative credit society practices and its operations, constraints faced by the farmers of PACC Society, and whether the farmers are satisfied with the services provided by the co-operative society and utilizing this credit for productive purposes or not. Methodology: The methodology used in this study is Descriptive Research, which is mainly concerned with secondary data sources. Secondary data collected from scholarly literature, books, journals, proceedings, magazines, newspapers, personal resources, libraries, websites, government records and documents. The present study was carried out in the Dakshina Kannada district of Karnataka state. The researcher collected information from secondary source. Findings: In Dakshina Kannada, the current status of co-operative society credit practices and operations were identified. Nature and disbursement of loans and advances, Beneficiary's level of satisfaction, the purpose of the credit, utilization of credit and working environment of the working staff, the level of crop credit beneficiary’s constraints, social practices, and activities were analysed. Originality: This study considered the problems faced by the members of the Primary Agricultural Credit Co-operative Society for agricultural credit. Value: This study reviewed the current status of primary agricultural credit co-operative services especially short-term crop loans to the members of the society. Paper Type: Descriptive study

Determinants of Non-Performing Loans and Non-Performing Financing level: Evidence in Indonesia 2008-2021

Banking stability plays an important role as an intermediary in the economy. Both the economy and the banking sector affect each other. This study aims to investigate the effect and response of external variables and internal bank variables on Non-Performing Loans at Conventional Commercial Banks and Non-Performing Financing at Islamic Commercial Banks. This study uses macroeconomic variables such as economic growth and inflation, while a bank’s internal variables include the Loan to Deposit Ratio, Financing to Deposit Ratio, and Capital Buffer. This study employs Vector Autoregressive Regression (VAR) to examine the time series data. The results showed that the variable Economic Growth at lag-1, Loan to Deposit Ratio at lag-1, and Capital Buffer at lag-2 significantly affect Non-Performing Loans. While the variable that has a significant effect on Non-Performing Financing is only Economic Growth at lag-1. In addition, as can be seen from the Impulse Response Function curve, Non-Performing Financing tends to be more stable toward shocks from the variables used than Non-Performing Loans. The findings suggest that banks are encouraged to be more selective in loan disbursement and maintain minimal capital adequacy by taking into account the principle of prudence and referring to the bank’s health criteria.

Bank dependency on foreign funding and global liquidity shocks: The importance of US monetary policy for a developing country

We examine international spillover effects of US monetary policy on bank lending in Cambodia, using unique data about loan disbursements and the funding structures of Cambodian banks from 2013Q1 to 2019Q2. The banking sector in a developing country is likely dependent on foreign funding, while the dependency could be the source of vulnerability to international monetary and economic conditions. We empirically document that US monetary policy is likely to be transmitted to Cambodian bank lending through foreign funding. We also document that Cambodian banks change their risk-taking behavior in response to the spillover effects of US monetary policy. Furthermore, these results are robust for US monetary policy, but weak and not robust for the monetary policies of the Cambodian bank’s major shareholders’ home countries, suggesting that US monetary policy should be primarily taken into account in supervising banks that are reliant on foreign funding, in addition to domestic economic conditions.

Influence of Group Based Micro-financial Services on Business Performance of Rural Based Micro, Small and Medium Enterprises (MSMEs) in Kagera Region Tanzania

As a result of on-going debate among scholars and researchers all over the world on actual influence of group based micro-financial services on rural based borrowers’ businesses some people in Kagera region Tanzania have become afraid of applying for such loans from financial institutions. Their worry is hinged on the thinking that such loans might impact negatively on their businesses leading to failure to repay the same loans. The objective of this study was to determine influence of group based micro-financial services (credit) on business performance of rural based MSMEs in Kagera region Tanzania. The Study was guided by the theory of Group Based Micro-financing (GBM) model. It was undertaken in four districts of Kagera region Tanzania. Data were collected using a structured questionnaire from 279 group based borrowers of two commercial banks and two microfinance institutions (MFIs). Multiple Linear Regression Analysis (MLRA) was conducted to estimate the influence of group based micro-financial services on business performance of rural based MSMEs. The study found out that some determinants of micro-financial services variable such as loan disbursement and loan repayment policy had positive and significant influence on business performance of rural based MSMEs. However, loan usage despite that had positive influence its influence was insignificant on business performance of rural based MSMEs. Conclusively, this finding implies that an increase/ improvement in loan disbursement and loan repayment policy are essential for increased business performance and hence compliance to loan repayments. It is thus recommended that because most rural borrowers invest their loans in agriculture micro-financial service providers (lenders) should improve their loan repayment policies and also make timely disbursement of loans so as make them marry with agricultural sessions in rural areas.

Agricultural education for youth empowerment in Nigeria: a brief review.

This study was carried out to review agricultural education for youth empowerment in Nigeria. The study adopted a qualitative research approach and existing studies on related studies were sourced online. The major findings of the study disclosed that motivational strategies for effective implementation of youth empowerment programmes in Nigeria include: adequate remuneration of trainers, disbursement of long and short term loans, bursary scheme for youth educational empowerment, sharing of sewing machines, among others. Supervisory strategies for effective implementation of youth empowerment programmes in Nigeria include, provision of adequate supervision task force for youth empowerment programmes and preparation of guidelines for reporting youth empowerment training activities. Managerial strategies for effective implementation of youth empowerment programmes in Nigeria among others include: development of scopes and sequence of the training programmes, provision of a curriculum for youth empowerment programmes and proper adherence to the curriculum contents. The policy strategies for effective implementation of youth empowerment programmes in Nigeria include, promulgation of decree for compulsory youth empowerment training programmes and centres, adoption of youth oriented policies in the States and formulation of decrees for formal entrepreneurship training programmes in institutions. Based on the findings of the study, the following recommendations were made: youth empowerment programmes should be introduced in the curriculum of institutions of higher learning. Tertiary institutions should put in efforts in teaching vocational education and agricultural skills acquisition programmes to enable every Nigerian to be self-reliant, self-developed and creative.

The Analysis of Risk Effect Towards Fintech Ecosystem On P2P Lending Industry in Indonesia

The purpose of this research for analyzing the affect and correlation risk to the fintech ecosystem on the P2P lending industry in Indonesia with the quantitative approach and using the analysis tools of SEM-Amos. The result is shown that risk has an affect and correlation significantly to the fintech ecosystem, it can prove that the risk changing has affect to fintech ecosystem stability. The key of activity on this industry is loan disbursement so the potential risk will come up is NPL (non-performing loan), which can cause credit risk. Credit risk can be mitigated by doing customer segmentation precisely. Mitigation is done by other risks, namely, operation, market, liquidity, legal, strategic, and pandemic risk-covid 19. Pandemic risk-covid 19 is an additional risk and positively correlates to start-up fintech elements. It is proof that the existence of pandemic-covid 19, the business of this industry is still running well and has no effect on it, causing this industry to use the mobile application and the transactions without meetings and still keep up social distancing. Another anticipation of empowering the fintech ecosystem by doing cooperation, coordination and collaboration between elements each other. This industry needs to add 2 (two) fintech ecosystem elements, they are credit insurance institutions and fintech consumer protection agency for anticipating the industry's need in the future. Keywords: fintech, fintech p2p lending, risk, pandemic risk-covid-19, fintech ecosystem

PREDICTING INDONESIA SOVEREIGN DEBT MANAGEMENT’S RISK OCCURRENCE USING MACHINE LEARNING ALGORITHMS

The purpose of developing this predictive model is to predict the potential occurrence of risks in the implementation of projects financed through government loans. It uses data on Indonesian sovereign loans from the MoF DMFAS in the period between 1998 and 2019, consisting of 1930 government loans. Government loan performance is represented by two qualities: timeliness of loan disbursement and rate of loan realization. In the development of the model, the ensemble learning methodology was applied with the voting classifier algorithm. The algorithms used to make predictions for voting classifier include k-NN Classifier, Random Forest, and Logistic Regression. The predictive model developed can accurately predict 73.14% of observations on the rate of disbursement of government loans and is able to predict numerous amendments to drawing limit correctly as much as 89.69% of observations.

LIVES IN DEBT AND DISTRESS: A CASE STUDY ON INDEBTEDNESS OF FARMERS IN THE DRY ZONE OF HARYANA STATE, INDIA

The study has been conducted to measure the extent and burden of debt on farmers. The study has been conducted to measure the extent and burden of debt on farmers. The study revealed that an average amount of debt per sampled farmer, per owned acre and per operated acre is rupees 491975, 70838 and 62775 respectively. The real burden of debt is very high. Institutional as well as non-institutional sources played main role in loan disbursement to farmers. One third amount of loan is still being taken for non-productive purposes. <span style="text-decoration: underline;">Conclusions:</span> Farmers are trapped under debt. They are not in situation to rid of from indebtedness. Because, small size of land holding by ownership, non-productive loans and high rate of interests charged by non-institutional sources are the main causes of their indebtedness.

Revisiting the Current Status of Green Finance and Sustainable Finance Disbursement: A Policy Insights

The paradigm of green finance is currently in the developmental stage in Bangladesh; however, it has drawn enormous interest in the global financial sector. Recently, researchers, academics, policymakers, and both the supply-side and demand-side of these funds are more serious in Green Finance and Sustainable Finance than ever before. In creating a greener economy, market players need to focus on sustainable development. All banks and NBFIs have to disburse the funded loan greater than or equal to 5% in green finance and 20% in sustainable finance according to BB policy guidelines. This paper examines the recent target accomplishment scenario of green finance and sustainable finance through banks and NBFIs in Bangladesh for the year of 2021 (four quarters). This study also observes the highest and lowest contributors in both schemes and is descriptive in nature. Data has been collected from secondary sources. According to the findings of this study, Bangladesh’s central bank has made significant accomplishments in the effort to green the country’s financial system by implementing several green policies and regulatory measures. This study also indicates the total target achievements of banks and NBFIs were 3.16% of 5% in the green finance of total loan disbursement and 9.32% of 20% in sustainable finance, which is still far behind the SDGs’ goal that must be achieved by 2030. The intention of this research is to encourage the supply and demand sides of the fund and to capitalize more on future research directions. Independent experts in this field are needed to confirm the findings of any further research.

Policy analysis of micro Waqf banks in Indonesia

This article aims to understand the Indonesian Government's efforts in making policies to handle the development of micro Waqf banks in Indonesia. The handling strategy can be assessed by understanding the policies formulated and implemented by the Indonesian Government. This study used a deliberative policy analysis approach, and data were collected through a literature study. The results of this study conclude 1) management for groups that can avoid misuse of loan funds and disbursement of funds not on target; 2) training and mentoring can build management commitment and customer enthusiasm to build a more advanced business; 3) with the financing method without collateral, the Islamic financial system does not collect deposits, low yields, and fast and easy administrative processes such as Islamic banking. Combining these three factors optimizes the performance of the micro Waqf bank in economic empowerment and community productivity. It helps increase the income and welfare of the community around the pesantren (Islamic boarding school).

WHAT INFLUENCES LOAN PERFORMANCE OF MICROFINANCE INSTITUTIONS? A CASE FROM OMO MICROFINANCE INSTITUTION DURAME DISTRICT (SOUTH ETHIOPIA)

This study aimed to find out the influencing factors of loan performance (LP) in microfinance institutions (MFIs) particularly Omo Microfinance Institution (OMFI) Durame district. The study employed quantitative research approaches. A multi-stage sampling method was chosen to collect data. Primary data were collected from 360 credit clients through personally administered questionnaires and from credit officers and branch managers through semi-structured interviews. Moreover, secondary data were collected from the District office. Descriptive statistics and multiple regression models were used to analyze data. Loan repayment rate was taken as proxy for LP, dependent variable and nine explanatory variables were chosen after intensive literature review. The study found that five variables such as gender, loan diversification, training, age of business, and suitability of loan disbursement schedule have been found to be positively and significantly affect LP whereas the age of respondents and number of dependents affect LP negatively and significantly. The predicting power of the explanatory variables was 59.6 percent, so it is recommended that further study must focus on the other variables that were not included in this study. Moreover, MFI and its stakeholders should take proper measure with significantly affecting variables found in this study in order to excel the LP of the organization.

Relationship between Domestic Debt and Economic Growth of Nigeria

Nigeria is one of the most highly indebted countries that have low income growth and low per capita income. Government seems to lack the potentials to generate revenue domestically to meet up with developmental goals and other national in order to attain the desire economic growth. Hence government resorts to borrowing. The paper examines the relationship between domestic debt and economic growth in Nigeria. The results reveal that domestic debt does not have significant impact on economic growth in the short run but significant negative impact in the long-run. The government should therefore monitor the disbursement of loan on real growth- enhancing capital projects instead of recurrent expenditure. Also, government should formulate policies aimed at increasing her ability to generate more revenue to meet her expenditure demand.

Agricultural Bank Credit Intervention And The Application of Big Push Theory to Beneficiaries:Evidence From Nigeria

Up till now there is shortage of empirical evidence on volume of loan received that generates big push for the farmers and the bank to curtail abuse of fund and its determinants. The purpose of this study is to examine the agricultural bank credit intervention and the application of big push theory among beneficiaries in Nigeria so as to make advocacy for a bailout intervention. A total of 295 beneficiaries were randomly selected. A questionnaire was developed, and data collection was undertaken by means of a multistage sampling technique. Descriptive statistics, regression model and t-test analysis were used to analyze the data. The mean age of beneficiaries was 46 years old. The respondents had an average household size of 6 persons with 79.3% of the beneficiaries being literate with one form of formal education or the other. About 65.4% of the beneficiaries did not subscribe to membership of farmers groups. The beneficiaries had 13 years’ experience in arable crop farming. The average farm size was 1.57 ha. This tells us that the beneficiaries were small scale farmers. The result reveals that the region of big push was between $244.34-$977.37 The variables that had positive and substantial relationship with big push in the model were age of respondent, years spent in farming, education, farm size, cooperative membership, household size, collateral requirement and marital status. The outcome of the t-test indicated that there was much impact after benefiting from agricultural bank credit loan scheme in the area. The foremost constraints were collateral requirement and high interest rate. Loan acquisition procedure by agricultural bank credit should be made easier as well as the threshold of farmers financial management ability should be considered during disbursement of loan to farmers for effective utilization.