Grant Loans Research Articles

Micro-Finance and Performance of Micro, Small and Medium Enterprises in Jos Metropolis

The Micro, Small and Medium Enterprises (MSME) sector plays a vital role in the growth of the economies of developing countries. Similarly, microfinance facilities are crucial to MSMEs financial performance as they facilitate the growth and development of MSMEs. This study, therefore, investigates the effects of microfinance on MSME performance in Jos metropolis of Plateau State. The research design is descriptive and employs the survey method. Simple random sampling technique was adopted as a technique in selecting the 323 MSMEs that form the sample size of the study. A structured questionnaire was used in the collection of relevant data used for analysis. Data was presented through the use of frequency tables and Chi-square test was used to carry out the analysis. The study found that microfinance has a positive effect on sales revenue and profitability and non-current assets. The study recommends creating awareness especially for women on the importance of microfinance in entrepreneurship development. The study also recommends that the Plateau State government should set up and implement policies that will ease access to microfinance credit by MSMEs, especially from microfinance banks. The study also recommends the granting of more loans to women to increase the number of women engaged in entrepreneurship activities within Jos metropolis.

When causality meets fairness: A survey

Addressing the problem of fairness is crucial to safely using machine learning algorithms to support decisions that have a critical impact on people's lives, such as job hiring, child maltreatment, disease diagnosis, loan granting, etc. Several notions of fairness have been defined and examined in the past decade, such as statistical parity and equalized odds. However, the most recent notions of fairness are causal-based and reflect the now widely accepted idea that using causality is necessary to appropriately address the problem of fairness. This paper examines an exhaustive list of causal-based fairness notions and studies their applicability in real-world scenarios. As most causal-based fairness notions are defined in terms of non-observable quantities (e.g., interventions and counterfactuals), their deployment in practice requires computing or estimating those quantities using observational data. This paper offers a comprehensive report of the different approaches to infer causal quantities from observational data, including identifiability (Pearl's SCM framework) and estimation (potential outcome framework). The main contributions of this survey paper are (1) a guideline to help select a suitable causal fairness notion given a specific real-world scenario and (2) a ranking of the fairness notions according to Pearl's causation ladder, indicating how difficult it is to deploy each notion in practice.

The Impact of ESG Regulations and Taxonomy on the Credit Process in Commercial Banks

The purpose of the article is to present the impact of legal regulations in the field of sustainable development (ESG) and taxonomies on the course of credit processes in commercial banks. Methodology refers to studies of legal regulations, comparative analysis of cases (case study) and inference. Results of the research show that the implementation of ESG regulations and taxonomies and the adaptation of credit processes in commercial banks will result in structural changes in loan portfolios in the near future while moving away from financing dirty industries towards the green ones. As a result, the financing stream for green assets and those supporting sustainable development will be increased, while the financing of dirty assets will be significantly reduced due to the increase in risks and accompanying costs for customers and banks. It is expected that even if some banks grant loans to finance dirty assets, they will only be short-term loans and will require high servicing costs (commission, margin, legal security, and insurance). This is due to the fact that the portfolio with credit exposures in the so-called dirty industries (mining, construction, trade) will escalate the increase in ESG risk. Such a portfolio with dirty exposures will require banks to secure additional reserve capital to maintain higher general and sector systemic risk buffers. Some banks will completely stop financing assets from dirty industries, which will mean that some of them will be abandoned due to the lack or high costs of their modernization, intensifying the negative socio-economic consequences. The ongoing process of redirecting the financing stream to green assets in banks means that enterprises and households need to take earlier adaptation actions. These include actions against financing constraints in dirty sectors and likely future losses in infrastructure and assets related to them.

FinTech lenders on the consumer finance market in Central and Eastern Europe

The authors analyze the consumer finance markets in the countries of Central and Eastern Europe against the background of the markets of the EU countries and the Euro area, with particular emphasis on non-bank lending institutions that use financial technologies to grant loans to consumers. As research shows, these loans are more expensive than traditional consumer bank loans, but more accessible, more flexible and tailored to the needs of customers from different generations. Black swans – sudden, unpredictable events – do not, in principle, change the demand for consumer credit but merely slow the growth dynamics of the market, which returns to its pre-disruption level after some time.

Generationenkapital gleich Zockerkapital? – die implizite Ziel-Performance des Referentenentwurfs

Abstract The following article shows that the objectives of the draft bill, which are being pursued with generation capital, namely the creation of foundation assets of 200 billion euros and annual distributions of 10 billion euros, are achieved without loan interest at a performance of 3.26%. If the foundation has to pay interest on the loan, the required performance increases, but the spread decreases steadily from the initial 3.26%. If the target distributions are to increase dynamically in the future, a performance of around 0.3 percentage points higher would be required as long as the federal government continues to grant loans. This performance appears to be realistically achievable in the long term. Nevertheless, its financial contribution is estimated to be low.

International financial institutions and the development of Nigeria

The study investigated the existing relationship between International Financial Institutions concerning the World Bank, International Monetary Fund, African Development Bank, and the development of Nigeria. The historical design was used to organize and analyze secondary data derived from books, articles, official journals of international financial institutions, government/official documents and internet sources related to the problem of the study. The study adopted the Modernization theory of development as its theoretical framework in explaining Nigeria's development from the perspective of her affiliation with the international financial institutions (Bretton Woods Institutions and African Development Bank)'s loan policies and initiatives and their implications for Nigeria's development. The findings revealed that the policies and initiatives of the Bretton Woods Institutions and African Development Bank influenced the Nigeria development project, which has resulted in the constant granting of loans to Nigeria. Based on the findings, the study recommends that the Nigerian government should quickly look inward at other internally generated revenues from custom duties, sales of crude oil, sales of refined crude (Petro), maritime and other agricultural products' revenues and re-channel them towards Nigeria's development instead of wholly depending on loans and otherwise set up independent, as well as strong institutions to oversee and manage funds from foreign loans to avoid mismanagement and diversification that may lead Nigeria into more foreign debts thereby further retarding development in Nigeria.

EFFECTS OF NON-PERFORMING LOANS ON RETURN ON ASSETS OF SELECTED COMMERCIAL BANKS IN NIGERIA

The essence of creating Commercial banks is to act as intermediary between the surplus (supply side) and deficit (demand side) units of funds. This is, in addition to other crucial objectives of profitability, growth in assets, and growth in customer base. To achieve these objectives, commercial banks grant loans to individuals, business organizations and governments among other profit yielding ventures. Loan defaults could be rampant resulting from low quality of assets, high non-performing risk assets (credit risk) that may result in huge loan losses, and reduction in bank profitability leading to adverse effect on return on assets of commercial banks. This study investigates the effect of non-performing loans (using loan loss provision as proxy) on return on assets of selected commercial banks in Nigeria. Annual time series secondary data from 2010 to 2021 were sourced from Central Bank of Nigeria Statistical Bulletin and the Annual Financial Reports of affected bank, and panel least square method of analysis was used as our estimation technique. The results revealed that while loan loss provision has negative impact on return on assets of the selected commercial banks, interest rate has a positive impact on return on assets of the selected commercial banks within the period of study. The study recommends, amongst others that effective credit policy, reflected in flexible tenure; restructuring of credit terms; and conversion should be adopted in the selected commercial banks to minimize the negative impacts of loan defaults. This is because decline in loan default will lead to reduction in non-performing loans, and subsequently boost return on assets of affected banks in Nigeria.
 Keywords: Non-Performing Loan, Return on Asset, Interest Rates, Bank Performance, Bank Profitability, and Loan Loss Provisions.

Bank Resources, Interest Margin and Long-Term Bank Financing in Franc Zone

The aim of this study is to determine the impact of bank resources and interest margin on the long-term bank lending in the countries of the franc zone over the period 2006-2016. We adopted a static panel data model and the random effects estimator. We used a static panel data model with random effects and the generalized least squares (GLS) estimation method. Our results show that basic bank capitalization and long-term savings positively and significantly impact the supply of long-term bank loans within this area. Only equity negatively and significantly affects the granting of long-term bank loans. We also find that the bank interest margin negatively and significantly influences the granting of long-term bank loans.

Conflict of Interest Between Managers and Partners in Cooperative Companies and Solutions

The conflict of interest between managers and partners in cooperative companies is an important issue that requires discussion and examination. Accordingly, the aim of the present article is to explore this issue and provide solutions in this regard. The current article is descriptive-analytical. The materials and data are qualitative, and note-taking has been used for data and content collection. The most significant conflicts of interest between managers and partners in cooperative companies include transactions between managers and the company, receiving loans from the company, competition with the company, accepting gifts and privileges, appointing individuals based on personal and familial relationships, serving on the board of competing companies, and personal use of the company's assets. The primary solutions to these conflicts include granting partners the authority to dismiss managers, prohibiting transactions between managers and the company, preventing managers from engaging in insider trading, prohibiting the granting of loans to managers, creating positive incentives for managers, imposing negative incentives, limiting the duration of managerial positions, restricting managers' participation in meetings and decision-making processes, limiting managerial roles, requiring managers to disclose personal interests in decisions, and banning the acceptance of gifts and privileges. The current laws have not adequately addressed the conflict of interest between managers and partners in cooperative companies. Considering the increasing development of cooperative companies and their significant economic impact, the enactment of relevant laws is essential.

A COMPARATIVE STUDY OF CREDIT RISK MANAGEMENT IN PUBLIC AND PRIVATE SECTOR BANK (WITH SPECIAL REFERENCE TO MUDRA YOJANA)

Government of India (GoI) launches various financing schemes for promoting Medium and Small Enterprises (MSMEs). One such scheme is MUDRA Yojana and loan under this Yojana is called MUDRA loan. This Yojana is performing well as amount of loan sanctioned in it rising year by year. But the matter of concern is along with it the NPA of bank relating to this scheme is continuously rising. The NPA of public sector bank is more in comparison of private sector bank in context to this Yojana. So, in this paper a comparative study of public and private sector banks on different parameters such as credit appraisal, monitoring and credit risk management in respect of MUDRA Yojana has been done. It is an analytical research based on primary data. In order to find out significance level factor analysis has been applied. The result of study shows that there is no considerable difference between above stated parameters among the sampled sectors bank. Keywords: MUDRA Yojana, credit appraisal, monitoring and credit risk management. Introduction Banks are financial institution which deals with mainly two functions first accepting deposit and secondly lending money i.e. granting loan. The function of granting loan is most crucial function of banks as it involves risk. Risk of nonpayment of loan called as credit risk and managing this risk is called credit risk management. Banks grant loans for various purposes either on individual demand or under government schemes. On individual demand bank faces less credit risk as they can deny granting of loan if they found that loan is uncovered by guarantee or if bank’s grant loans then on its own favorable term and condition but in case of government sanctioned schemes banks are bound to issue loan on the features or conditions government has launched. The features or conditions of government schemes are public favorable rather than banks favorable. One such government scheme is MUDRA Yojana launched in April 8, 2015 with the purpose of financing micro small and medium enterprises so that income as well as employment can be generated. In this Yojana MUDRA loan is given under 3 categories

Risk Assessment for Reimbursement of Microfinance Institutions

Purpose: Understanding the repayment behavior of the borrower is very important to the lending decisions of financial institutions and thus helps to promote the development of microfinance. This paper examines the factors that affect the repayment default of microfinance in Tunisia. Theoretical framework: Some studies highlight the importance of incorporating macroeconomic conditions for the estimation of borrowers’ credit risk (Bellotti & Crook, 2013). However, IADB (2020) announced that after the start of the Covid-19 pandemic in the region, microfinance institutions had restricted liquidity, which affected the availability of credit. Therefore, for the purpose of the present article, the literature on default in MFIs analyzes the credit risk and factors that influence granted loans Design/Methodology/Approach: We carried out a survey, with a non-stratified sample of 320 microcredit beneficiaries, during 2021 in Enda-inter-Arab agencies located in the region of Sousse- Tunisia. We introduce a binary logistic regression model to predict the values taken by a discrete variable from a series of continuous or binary explanatory variables. Findings: We show that borrowers’ socioeconomic characteristics, total loan, repayment period and past participation in microcredit loans have significant impacts, as special features, on their default rates. Research, Practical & Social implications: This paper has been designed to provide some valuable contributions in improving the repayment performance and can be significant political involvement, derived from the strong relationship between the level of poverty and the success of loan repayments. Indeed, the level of borrowers’ poverty must be given considerable weight before the loan is disbursed. Originality/Value: The results indicate that the qualification and age of the workforce should be considered a basic requirement before the granting of loan. In addition the microfinance institution's credit policy should also consider service projects a priority.

Internal Control and Performance of Selected Thrift and Credit Cooperative Societies in Nigeria

The study empirically examined the impact of internal control on perforamcne of selected thrift and credit cooperative soceities in Nigeria. A study of Cross River State. The specific objectives were to: examine the impact of internal audit on performance of thrift and credit cooperatives, ascertain the impact of control activities on performance of thrift and credit cooperatives, determine the impact of communication and information on performance of thrift and credit cooperatives, find out the impact of monitoring activities on performance of thrift and credit cooperatives. This study made use of an ex-post facto research design. The population consists of forty (40) thrift and credit cooperatives in Cross River State. The study employed multiple regression analysis to measure the degree of relationship between variables tested in the study. Based on the analysis, the following findings were made; Internal audit had a significant impact on the performance of selected thrift and credit cooperatives; Control activities had a significant impact on the performance of selected thrift and credit cooperatives; Communication/information had a significant impact on the performance of selected thrift and credit cooperatives. And monitoring activities had a significant impact on the performance of selected thrift and credit cooperatives. The study recommended that emphasis should be placed on the control of presenting pay slip evidence before loan application is considered to ensure that members do not take loans that cannot be effectively repaid within the stipulated period. The Cooperative societies should have specific guidelines on the implementation of necessary internal controls on granting and repayment of loans.

Loan Eligibility Prediction Using Machine Learning

Abstract: Lending research has become a highly essential research area since it may assist prevent loan defaults and grant loans to those who would pay on time. Therefore, for it though, we devised a technique for machine learning known as the random forest method, and also the data was used in this. Whatever is necessary is gathered from internet sites, and the data gathered is normalized before being employed for researching and predicting output, and it is then delivered to the random forest method, which is employed in our research. Following that, we may use the program to determine if a person is eligible for a loan or not, and a bank might not exclusively target the wealthy. Clients are accessed for loan purposes, but it also accesses other aspects of a client, that play a significant role in credit giving choices and lending prediction tax evaders.

Dynamic framework for strategic forecasting of the bank consumer loan market: Evidence from Ukraine

Accurate forecasting of consumer loan market behavior gives banks a huge potential to optimize their credit strategies by proactively adapting to external changes. This study aims to analyze and predict consumer loan demand, supply, and profitability in the Ukrainian banking sector. Using a systemic dynamic approach, the interplay of five key factors is considered: central bank policies, GDP fluctuations, changing competitive landscape driven by FinTech companies, investment in government bonds as an alternative to loan granting, and severity of credit risk management.The developed dynamic model for the bank consumer loan market in Ukraine offers predictive capabilities enhancing decision-making and strategic planning in the banking sector and can be adapted in open small economies. Within the proposed systemic dynamic model, five scenarios were explored. Compared to the base scenario, a 4 p.p. increase in the key policy rate results in UAH 4.7 billion decrease in demand for bank consumer loans and a UAH 0.55 billion reduction in lending profitability based on the year’s results. Fall in GDP by 6 p.p. leads to a decrease in the supply of bank consumer loans by UAH 6.9 billion and a decrease in lending income by UAH 1.3 billion based on the year’s results. Scenario with the decline of FinTech portfolio by 20 p.p. quarterly leads to an increase in demand for bank consumer loans of UAH 8 billion. A 4 p.p. rise in government bond yields leads to a UAH 17 billion reduction in the supply of consumer loans in the same quarter.

The impact of micro credit programme on rural women livelihood development: A study of Bulathsinhala DS division in Sri Lanka

Micro credit (MC) is a financial service include under micro finance which is provide by consultative group to assist low income people. In global context, it is a very popular credit scheme among people who don't have access to formal financial services and most of them are women. However, this study tried to find the impact of Micro Credit programme on rural women livelihood development in Sri Lanka. The study conducted under main three objectives. Firstly, identify the Micro Credit client base and their intention of granting of Micro Credit loans. Then analyse the impact of Micro Credit loans on rural women livelihood development. Finally, provide suggestions and recommendations to improve effectiveness of credit programme in Sri Lanka. As the way to continue the study 50 Micro Credit women clients were selected from Bulathsinhala DS division by using simple random sampling technique. Then the data collected through structured questionnaires and interviews were analysed by using descriptive and inferential statistical analysis methods. According to the findings of the study, due to on-time & easy access to Micro Credit loans, people tend to use Micro Credit irrespective of the high-interest rate. Anyhow, Micro Credit has not helped to improve the livelihood and living standard of the rural women in the study area. Instead of that, their debtness was increased. Reasons for that were lack of financial literacy knowledge of women and miss utilization for recover previous loan premiums and for family consumption without a proper investment plan. Therefore, the study suggests responsible authorities to create accessible credit schemes for rural women & Micro credit institutions to create evaluating & monitoring process as an after care service of loans & organize programme to improve their client’s Financial Literacy knowledge to create an effective rural Micro Credit programme within Sri Lankan context.

Monetary Policy and Commercial Banks’ Credit to Agricultural Sector: A Study of Nigeria

This study examines the relationship between monetary policy and commercial banks credit to agricultural sector in Nigeria with uses of secondary data for the period 1981 to 2021 by applying Autoregressive Distributed Lag technique. Result from this study shown that, liquidity ratio, monetary policy rate, loan to deposit ratio and cash reserve ratio have no significant influence on commercial banks credit to agricultural sector in Nigeria. On the other hand the treasury bill ratios has significant positive effect on commercial banks credit allocated to agricultural sector in Nigeria. The study therefore recommends that Central Bank of Nigeria should cuts down the cash reserve ratio to encourage the loanable funds available with the banks. Regulatory authority should put in place suitable policy that will prevailing cash hoarding in the economy to achieve desired liquidity ratio level. CBN should use the loan to deposit to center for regulating and moderating commercial banks for a positive significant impact to sectors in Nigeria. Authorities should use monetary policy rate to expand the volume of commercial banks’ ability to grant credits. Finally, monetary policy authority should ensure that holding of treasury bills by commercial banks should be reduced to enhance the ability to grant loans and advances to the public for productive purposes. .

Some implications of the neoliberal massification of Colombian HE for achieving the sustainable development goals

This article draws on existing research, including publicly available data, to identify changes in Colombian HE which have led to its progressive massification and neoliberalisation. These include the introduction of standardised testing; endogenous and exogenous privatisation (Ball and Youdell, 2007); the expansion of the country’s non-income contingent loan scheme; cost-cutting and cost-sharing; and the Government of Colombia’s prioritisation of technical and technological (T&T) education. The article then explores some implications of this neoliberal massification of Colombian HE for the achievement of the UN’s sustainable development goals in general and more specifically Sustainable Development Target 4.3, which is the only target to explicitly reference inclusion in HE. The analysis suggests that although some neoliberal policies may have broadened access to HE for some Colombians from low-income and rural backgrounds, they are not consistent with a sustainable development agenda. Reasons for this include the large number of student loans recipients who are in arrears; the use of public money to finance students’ courses in private higher education institutions (HEIs); the prioritisation of T&T education which leaves limited room in Colombian HE for the ‘full development of the human personality’ (OHCHR, 2022: article 13.1); and the country’s overreliance on non-renewable resources for its economic prosperity. The paper ends with some proposals for disrupting the ongoing neoliberalisation of higher learning in Colombia such as the replacement of the country’s non-contingent loan scheme with an income-contingent model; improving the efficiency and accountability of state-run T&T programmes; the granting of student loans only for courses at accredited HEIs; the provision of loans to accredited private HEIs only in cases where no public alternative exists; the abolition of tuition fees in public HEIs for the poorest students; the introduction of stipend-supported internships; and the promotion of Civic Education.

Analyzing the impact of loan features on bank loan prediction using Random Forest algorithm

AbstractLoans are a crucial source of income for the financial sector, but they also come with significant financial risks. The interest on loans constitutes a significant portion of a bank's assets. The demand for loans is growing worldwide, and organizations are devising efficient business strategies to attract more clients. Every day, a large number of people apply for loans for various reasons, but not all of them can be approved due to the risk of loan default. It is not uncommon for people to default on their loans, causing significant losses to banks. The purpose of this article is to determine whether to grant loans to specific individuals or organizations. The Random Forest Regressor model has been utilized to measure performance and identify suitable customers for loan approval. The model suggests that banks should not only target affluent clients but also consider other customer characteristics that are critical in credit granting and predicting loan default. The research examines various loan approval parameters such as gender, educational qualification, employment type, business type, loan term, and marital status. Additionally, the study analyzes the number of approved, drawn, and rejected loans, which provides valuable insights into loan approval and prediction.

Sistem Pendukung Keputusan Pemberian Pinjaman Karyawan PTBA UPO dengan Metode Simple Additive Weighting (SAW)

The PTBA UPO Employee Cooperative is a cooperative specifically designed for PTBA UPO employees, including both active and inactive employees. To facilitate the decision-making process regarding the priority loan recipients from the PTBA UPO cooperative, a system is needed to help make decisions more quickly, effectively, and efficiently. A decision support system is a method that aims to assist individuals or companies in making accurate, fast, and precise decisions. The Simple Additive Weighting (SAW) is a decision-making method that uses weighted summation. Several criteria have been established to determine the granting of loans at the PTBA UPO Cooperative, including membership status, needs, loan order, income amount, and previous loan balance. Members of the PTBA UPO cooperative who meet the predetermined criteria and have a preference final score become the priority loan recipients. This decision support system makes it easier for Savings and Loans Managers and PMs (Assistant Managers) to quickly determine which members have the highest priority in receiving loans.

IMPACT OF AGRICULTURAL TRAINING COURSES ON APPLYING MODERN AND EFFICIENT IRRIGATION METHODS AMONG FARMERS IN TABRIZ, IRAN (TREATMENT EFFECT APPROACH)

Purpose: Many experts believe that the lack of an efficient water management system in agriculture has made it essential to redesign new irrigation models adopted in many successful countries across the world. Improving water productivity in the agriculture sector is undoubtedly one of the crucial measures taken to improve water resource management. Water productivity in Iran's agriculture is about one-fifth of the global standard. Many assume that accurate training courses for farmers or granting production facilities and loans for agriculturists are beneficial steps to use efficient and effective irrigation methods and a subsequent considerable saving in water consumption.
 Design/methodology/approach: This study aims to apply the Treatment Effect Approach to examine the impact of academic or promotional training courses for irrigation efficiency on the application of modern and efficient irrigation methods, by farmers. To do this, 132 trained farmers were assigned to the treatment or test groups, and 212 untrained farmers in Tabriz were assigned to the control group in the crop year 2020. 
 Findings: Results indicated a positive and significant impact of agriculture education and training courses on the probability of using efficient irrigation techniques. In other words, agriculture knowledge increases the probability of using modern irrigation methods up to 344.25. 
 Originality: It is suggested that agricultural policies must grant loans and facilities to agriculturists or those farmers who have received purposeful training courses about the application of efficient irrigation methods.