Higher Default Research Articles

Challenges in financing residential construction for individuals by commercial banks and ways to address them

This article examines the challenges faced by commercial banks in Uzbekistan when providing financing for individual residential construction and explores solutions to improve this financing process. Key issues include high default risk, limited borrower creditworthiness, fluctuating interest rates, regulatory constraints, and high administrative costs. The study proposes targeted solutions such as phased disbursement loans, enhanced credit assessment, financial literacy programs, and partnerships with construction firms, and public-private collaborations.

Leveraging Data from a Provincial Electronic Immunization Registry to Analyze Immunization Coverage, Timeliness, and Defaulters Among 8.8 Million Children from the 2018 to 2023 Birth Cohorts in Sindh Province, Pakistan

Background/Objectives: Full immunization coverage in Pakistan remains suboptimal at 66%. An in-depth assessment is needed to understand the long-term trends in immunization and identify the extent of defaulters and associated risk factors of them being left uncovered by the immunization system. Methods: We conducted a 5-year analysis using the Government’s Provincial Electronic Immunization Registry data for the 2018–2023 birth cohorts in Sindh province. We analyzed 8,792,392 child-level immunization records from 1 January 2018 to 31 May 2024 to examine trends in immunization coverage, timeliness, defaulter rates, and associated risk factors; Results: Our findings indicate gradual improvements in immunization coverage, with full immunization rates increasing by 23.2% (from 47.5% to 70.7%) from 2018 to 2022. While timeliness declined from 2018 to 2021, it recovered in 2022 and 2023. Over the 5-year study period, >90% of children defaulted on vaccinations, with 34.8% fully covered and 9.1% uncovered. Children from urban areas (OR = 1.54; 95% CI = 1.52, 1.56; p-value < 0.001) and those enrolled through fixed immunization sites (OR = 2.11; 95% CI = 2.08, 2.15; p-value < 0.001) and mobile immunization vans (OR = 1.13; 95% CI = 1.13, 1.77; p-value = 0.003) were at higher risk of being uncovered defaulters. Conclusions: This study demonstrates improvements in immunization coverage in Sindh while highlighting the challenge of low timeliness and high default rates. Our findings provide insights to strengthen immunization access and timeliness, particularly in high-default areas, and can guide policies in similar low-income settings for more equitable and comprehensive immunization coverage.

Market-level tenant default risk on residential REIT operational efficiency

ABSTRACT Selecting which geographical markets a REIT serves is an important managerial decision that is expected to significantly impact firm performance. This paper investigates whether holding properties in areas with greater incidence of evictions impacts REIT operational efficiency. Using a comprehensive database of eviction lawsuits in the United States in combination with a time-series of residential REIT portfolio holdings, we construct REIT-year eviction exposure scores to analyse whether more exposure to areas with high aggregate eviction rates is a risk factor affecting REIT efficiency. We posit that market-level tenant default risk captures a locational risk dimension that should be considered in REIT portfolio management. Our results show that REITs with more exposure to markets with high tenant default risk observe higher operational inefficiencies after controlling for relevant firm characteristics and local market factors. These results are robust to multiple model specifications that control for potential endogeneity and omitted variable biases. Our findings have significant implications for REIT managers and investors, suggesting that the choice of property locations should consider aggregate tenant default risk as a determinant factor in residential REIT performance.

Informal Credits in India’s Agriculture Sector: Debt Incidence, Size and Distribution across Major Farm-size Groups

Until recently, studies on agricultural finance in India mostly focus on farmers’ access to formal credits, thereby largely sidelining their informal borrowings. This study makes an effort to present an analysis of farmers’ informal debts and their distribution across the major farm-size groups in India. The study uses unit-level data from the 77th round ‘Situation Assessment Survey (SAS)’ of agricultural households conducted by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MOSPI), Government of India (GOI), during January–December, 2019. Data were collected for the reference period of July 2018–June 2019. We use descriptive statistics and multivariate regression procedures for analysis. Results show that about one-half of the borrowers continue to depend on informal credit sources—partially or fully. Informal sources also account for about one-third of the total debt of the agricultural households. Informal debt incidence (IDI) and informal debt share (IDS) are found to be higher among the smallholders. Our findings are imperative of policy measures to improve the current state of the antecedents of formal credit access to benefit the otherwise high default risk and credit-rationed smallholders. Future studies may focus on formal credit rationing, informal credit terms and repayment burden of the agricultural households in India.

Sleep Deprivation Effects on Brain State Dynamics Are Associated With Dopamine D2 Receptor Availability Via Network Control Theory

BackgroundSleep deprivation (SD) negatively affects brain function. Most brain imaging studies have investigated the effects of SD on static brain function. SD effects on functional brain dynamics and their relationship with molecular changes remain relatively unexplored. MethodsWe used functional magnetic resonance imaging to examine resting-brain state dynamics after one night of SD compared with rested wakefulness (N = 41) and assessed the association of brain state dynamics with striatal brain dopamine D2 receptor availability measured by positron emission tomography [11C]raclopride using network control theory. ResultsSD reduced dwell time and persistence probabilities, with the strongest effects in two brain states, one characterized by high default mode network and low dorsal attention network activity and the other by high frontoparietal network and low somatomotor network activity. Using network control theory, we showed that after SD, there was an overall increase in the control energy required for brain state transitions, with effects varying for different brain state transitions. Control energy requirement was negatively associated with transition probabilities under SD and restful wakefulness and accounted for SD-induced changes in transition probabilities. Alteration in the energy landscape was associated with SD-induced changes in striatal D2 receptor distribution. ConclusionsThese findings demonstrate altered occurrence of internally and externally oriented brain states following acute SD and suggest an association with energy requirements for brain state transitions modulated by striatal D2 receptors.

Deleveraging, Debt Default Risk, and Enterprise Innovation: Evidence from China

This study, at the micro level, takes the Chinese central government's implementation of the "deleveraging" policy as a quasi natural experiment. Based on data from listed companies from 2013 to 2017, this study introduces the Metron default distance that balances financial indicators and asset value fluctuations to measure default risk. Therefore, the DID method is used to test the innovation situation of enterprises with high default risk under the "deleveraging" policy. Research has found that companies with significant default risks under policy shocks have significantly improved their innovation levels and increased their innovation achievements. Furthermore, this research studies the mechanism of the "deleveraging" policy on enterprise innovation from three perspectives: enterprise financing, investment, and business management. The implementation of the "deleveraging" policy will enhance the cash holdings and management governance level of enterprises with high default risk, thereby promoting enterprise innovation.

How to promote the transition of fuel vehicle enterprises under dual credit policy? An improved tripartite evolutionary game analysis with time delay

Under the context of carbon peak and carbon neutrality, new energy vehicle (NEV) is considered as ultimate objective in development of automotive industry. To facilitate sustainable growth of automotive market and ensure a smooth transition for fuel vehicle (FV) enterprises, this paper constructs a tripartite evolutionary game model based on tripartite Hoteling model, which involving NEV enterprises, FV enterprises and governments. The herd effect and time-delay effect are considered to improve the tripartite evolutionary game. Results indicate that: (1) Fund feedback to NEV enterprises will counterintuitively decrease probability of active assistance from NEV enterprises. (2) Governments’ willingness for strict involvement positively correlates with supervision costs but negatively correlates with additional benefits. (3) Time delay in funds leads to weak effect of high default penalties in promoting active assistance of NEV enterprises in early stage, but opposite situation appears in later stage. (4) Higher NEV production proportion counterintuitively stimulates FV enterprises to give up transition. (5) High rewards drive diffusion of herd effect, further increasing competition among vehicle enterprises leading to FV enterprises giving up transition. (6) Herd effect and time-delay effect increase dependence of FV enterprises on funds results in higher sensitivity of credit trading price compared to credit ratio requirement.

Bank Lending Rates and Nonperforming Loans of Listed Commercial Banks in Kenya

The rise in non-performing loans in Kenyan commercial banks over the past ten years has created instability in the financial industry. Due to their impact on borrowers' ability to repay the loans, high-interest rates are a contributing factor to non-performing loans. The interest rate on loans has an implicit cost that is inherent to bank credit and has an impact on loan defaults. In this sense, a large percentage of non-performing loans (NPLs) in Kenya’s Commercial banks has continued to impede economic expansion due to high default rates experienced by many banks making them unable to advance new loans. The study investigated the influence of bank lending rates on nonperforming loans in listed commercial banks in Kenya using secondary monthly data from November 2019 when the interest capping was repelled to September 2023. Secondary data was obtained from the Central Bank of Kenya Monthly Statistical Bulletin. Inferential statistics using regression analysis was utilized to analyze the data. The regression model results showed that bank lending rates had a positive and statistically significant effect on non-performing loans of listed commercial banks in Kenya as illustrated by a P-value of 0.0000000054, which is less than 0.05. The results implied that lending rates do influence non-performing loans of listed commercial banks in Kenya as measured by the gross non-performing loans ratio. Policymakers in Kenya need to control lending rates to reduce the rising rates of non-performing loans.

Peer-to-Peer Lending Performance Improvement: Learn from Lean Principles

While experiencing robust growth in recent years, Peer-to-Peer (P2P) lending still faces the serious challenge of a high default rate. This study argues that it is beneficial to analyze P2P lending from a process improvement perspective. Adopting an integrative literature review method, this study identifies and summarizes the characteristics of P2P lending and then maps them to the fundamental lean attributes. Furthermore, this research proposes detailed application suggestions for reducing loan default rates in terms of understanding customer needs, value stream, information flow, pull approach, and continuous improvement. As an early attempt, mapping P2P lending characteristics and lean principles allows P2P lending to learn the well-established quality improvement practices from lean management. This study contributes to both P2P lending performance improvement and applications of lean management.

CEOs’ capital gains tax liabilities and accounting conservatism

AbstractRecent studies show that the tax‐induced lock‐in effect discourages CEOs from unwinding their unrestricted equity and subsequently exacerbates their risk‐aversion. I investigate how CEOs’ unrealized capital gains tax liabilities (tax burdens) influence financial reporting conservatism. I find that the demand for accounting conservatism decreases with CEO tax burdens. Further analyses show that the negative relation between CEO tax burden and conservatism is stronger when the firm has high leverage and high default risk and when the CEO's incentives are more aligned with equity holders. This highlights the shareholder–creditor agency conflicts mitigation role of CEO tax burdens in reducing creditors’ demand for conservatism. I exploit the Federal Taxpayer Reform Act of 1997 and staggered state‐level tax cuts that significantly decreased personal capital gains tax rates as identification strategies.

Risk Assessment of the Banking Industry under COVID-19

The outbreak of the COVID-19 pandemic in 2020 has brought various risks and threats to the entire banking industry, from which we can also know the importance of bank risk management. This paper mainly describes, analyzes, and summarizes the five aspects of liquidity risk, credit risk, market risk, and systemic risk. With regard to liquidity risk, the article describes the impact of the Federal Reserves continuous interest rate hikes on the banking industry in order to curb the high inflation caused by the COVID-19 pandemic and takes the collapse of Silicon Valley Bank as an example for analysis. Regarding credit risk, this article takes Credit Suisse Bank as an example. Highly leveraged speculative transactions caused huge losses to the company due to the high default rate during the epidemic. For the analysis of market risk, the article synthesizes the deeds of Credit Suisse Bank and Silicon Valley Bank, focuses on the interest rate, and the reasons for the collapse of Credit Suisse and Silicon Valley Bank are different on the surface, but the underlying logic of the two events is traced to the same There is a close relationship between the current interest rate environment and the changes in interest rates in recent years. As for systemic risk, the article mainly writes about the purpose and effect of Basel III and the supervision of the capital adequacy ratio during the epidemic. Overall, commercial banks need to closely monitor these risks and take steps to mitigate them to ensure their stability and continued operations during the pandemic.

Treatment outcomes of multidrug resistant tuberculosis (MDR TB) treated with bedaquiline under programmatic management of drug resistant tuberculosis at a tertiary care hospital in Punjab, India

IntroductionMDR TB is a serious global concern which is hampering TB elimination goals badly. Standardized MDR TB regimen had high default rates, more side effects and poor treatment outcomes. Bedaquiline is a newer anti-tubercular drug which has made oral regimens possible for MDR TB. We aimed to study the outcomes of MDR TB patients treated with Bdq containing regimens. Methods155 patients of MDR TB on Bdq containing regimen enrolled at GMC, Patiala under NTEP from 2017 to 2020 were enrolled retrospectively. ResultsOut of 155 patients enrolled, 82 (52.9 %) were cured, 31 (20 %) completed treatment, 18 (11.6 %) defaulted, 22 (14.2 %) died and 2 (0.12 %) failed treatment. ConclusionBdq is well tolerated with very less side effects and has better outcomes as compared to standard MDR regimens which were followed earlier.

Delegated Bank Monitoring by Bond Investors: Evidence from Japanese Main Banks

We investigate whether bank monitoring based on private information in private debt reduces the reliance on public earnings information in public debt. We focus on Japanese main banks, which have a high ability to access the private information of borrowing firms by exploiting their position as both large creditors and shareholders. Previous studies show that the Japanese main bank has a strong incentive to monitor borrowing firms when they are performing poorly, while it never intervenes in their management as long as their financial performance is stable. We find that under stable financial conditions in bond-issuing firms, accrual quality is negatively associated with bond yield spreads. In contrast, when bond-issuing firms with a main bank have a high default risk, there is no relationship between accruals quality and bond yield spread. The results suggest that when a main bank has a stronger incentive to monitor its borrowing firms, bondholders are more likely to delegate the screening role to the main bank with private information, leading to a reduction in the reliance on firms’ public earnings information in bond contracts.

Product Sales Incentive Spillovers to the Lending Market: Evidence from Subprime Auto Loan Defaults

This paper shows how convex incentives in vertical contracts between manufacturers and retailers can induce sales behavior with costs to consumers. We examine this problem in the automotive sector, where manufacturers commonly motivate new vehicle sales through dealer incentive programs with large discrete bonuses determined by monthly sales targets. Using subprime car loans from over 3,500 dealerships, we document high default rates on new car loans originated at the end of the month—the period when dealerships attempt to secure target-based bonuses by intensifying efforts to sell new cars. We provide evidence consistent with the observed higher default rates resulting from customers purchasing new vehicles at month end. New car purchases stretch borrower budgets and expose borrowers to rapid depreciation, which consigns the borrower with negative equity through much of the loan term. Our results imply that the quartile of customers with the highest payment-to-income ratio see default rates increase from 13.6% to 19.7% on the last day of the month. Although consumers bear high costs from increased defaults, we find no evidence that lenders that purchase the loans are hurt by the default increase. Our results demonstrate how the behaviors induced by convex incentive schemes for sales are borne by customers. This paper was accepted by David Simchi-Levi, business strategy. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4935 .

A STUDY ON NON-PERFORMING ASSETS MANAGEMENT AT STATE BANK OF INDIA, ANANTHAPURA GATE, BANGALORE KARNATAKA

Non-performing assets (NPAs) are advances that are not repaid or serviced by the borrowers, posing a risk to the financial stability and profitability of banks. This research aims to inspect the management of NPAs at ‘State Bank of India’ (SBI), one of the largest public segment banks in India. The study has four objectives: to study the gross and net NPAs position at SBI, to analyse the sector-wise and segment- wise NPAs position at SBI, to ascertain the extent of provisions made for NPAs, and to determine the impact of NPAs and provisions on the profitability of SBI. The learning uses secondary data from the annual reports of SBI for the period from 2019 to 2023. The study employs descriptive statistics, correlation analysis, and hypothesis testing to analyse the data. The study discoveries that SBI has improved its asset quality and credit risk management over the five-year period, as evidenced by the declining trend of gross and net NPAs, the of NPAs in high-risk sectors, and the increase in provisions and profitability. The study also finds that there is a significant relationship between gross and net NPAs, and that there is a difference between provisions and net profit. The study suggeststhat SBI should focus on reducing the NPA ratio of the industries with high exposure and default rates, diversifying its loan portfolio, and strengthening its credit assessment, monitoring, and recovery systems. The study concludes that SBI has successfully managed its NPAs and enhanced its financial performance, which is beneficial for the country’s growth andeconomic growth. Key words: Non-performing assets, Gross NPA, Net NPA, Sector wise Performance, Provisions, Profitability

ThTP4.5 Outcomes of colorectal cancers can be improved - 10 year Results from a South Asian Tertiary Center

Abstract Introduction Colorectal cancers are the most common gastrointestinal cancers and continue to rise in numbers. We aimed to compare the outcomes of all colorectal cancers after a five year period of change in practice. Methods We compared the demographic, clinical, treatment, and outcomes parameters of all rectal cancer patients registered at our hospital in the year 2013 to those in 2018. A total of 1442 patients, 511 in 2013 and 931 in 2018 were included. Results Median age reduced from 46 years to 40 years, with the proportion of young rectal cancers (≤45 years) increasing from 49% to 70% in 2018. A shift towards low rectal cancers, poorly differentiated and signet-ring cell histology was also observed in 2018. More patients in 2018 presented with advanced T and N stage with similar rates of distant metastatic disease at initial diagnosis. Curative intent treatment was offered to 1179 patients, and neoadjuvant radiation was offered to similar proportions with an increasing use of short-course radiation in 2018. Higher default and progression rates were observed in 2018 (30.2% vs 40.8%), and fewer patients could receive definitive surgery. At a median follow up of 96 months for the 2013 group and 32 months for the 2018 cohort, the 3-year OS was 47.5% and 73.3% for the 2013 and 2018 registered patients, respectively. Conclusions The increase in survival for every stage of rectal cancer in five years interval despite more advanced and aggressive tumours, suggest the augmentation and improvement in services offered at the colorectal unit.

Assessment of the Five Cs of Credit in the Lending Requirements of the Nigerian Commercial Banks

Credit evaluation and decision like any investment decision requires utmost due diligence from the decision makers to avoid high default rates. It is expected of the lender to apply caution all the way by eliminating all forms of asymmetry information that could lead to adverse selection and non-performing loans. To avoid adverse selection and high default rates that could jeopardize the lender’s going concern and profitability, caution is the silent C emedded in the five Cs of credit. The study administered a structured questionnaire to all the Nigerian banks that survived the 2005 recapitalization era and were still in operations at the time of this study. While the structured questions required the respondents to rank the five Cs of credit based on the importance their credit policy and practice attached to them, the hypothesis tested centred on the impacts of the Cs of credit on risk asset quality. The qualitative data were also analyzed using a module of the SPSS statistical software. The study observed that all the Cs of credit have a direct and significant correlation with the asset quality (non-performing loan ratio). The study recommended that Caution which it considered as a slient C of credit embedded in the five Cs and the only C provided by the lender should be the watchword throughout the credit risk management process. It imay be pertinent to also note that while the traditional five Cs (character, capacity, capital, collateral and conditions) are required from the borrower, the caution is required from the lender as a check on traditional five Cs.

Risiko Misleading Information Prospektus Keuangan UMK-M Pada Securities Crowdfunding: Implementasi BLU sebagai Auditor

Securities Crowdfunding (SCF) is expected to be a fast, cheap, and massive alternative funding system for Micro, Small, and Medium Enterprises (MSMEs). However, its implementation is far from ideal. Several studies in China, Britain, and America concluded that SCF is one of the riskiest investment instruments. This is closely related to the lack of implementation of audit obligations on the financial statements of MSMEs as Issuers. To analyze the above problems, this study applied doctrinal research methods and Reform Oriented Research. This study aimed to analyze the urgency of establishing the Public Service Agency of Securities Crowdfunding (BLU SCF) in the implementation of the SCF ecosystem in Indonesia and design the idea of regulating BLU SCF as an SCF auditor. This research found that: (1) the urgency of establishing BLU SCF includes the high default risk by the Issuers, the responsibility exemption from the Issuers and the Organizers for the truth of the financial statements, and there is a potential conflict of interest between the Issuers and the Organizers; (2) BLU SCF will be authorized to audit the reports and other financial documents published by the Issuers through the Organizers. Institutionally, BLU SCF will be under the auspices of the Ministry of Cooperatives and Small and Medium Enterprises. This idea is expected to improve the practice of SCF implementation in Indonesia, by prioritizing the protection of Investors’ rights to the truth of the Issuer’s financial statements.

Ethernet-based timing system for accelerator facilities: The IFMIF-DONES case

This article presents the design of a timing system for accelerator facilities, which relies on a general networking approach based on standard Ethernet protocols that keeps all the devices synchronized to a common time reference. The case of the IFMIF-DONES infrastructure is studied in detail, providing a framework for the implementation of the timing system. The network time protocol (NTP) with software timestamping and the precision time protocol (PTP) with hardware timestamping are used to synchronize devices with sub-millisecond and sub-microsecond accuracy requirements, respectively. The design also considers the utilization of IEEE 1588 high accuracy default PTP profile (PTP-HA) to provide sub-nanosecond accuracy for the most demanding components. Three different solutions for the design of the timing system are discussed in detail. The first solution considers the deployment of one time-dedicated network for each synchronization protocol, while the second one proposes the integration of the synchronization data of NTP and PTP into the networks of the facility. The third solution relies on the single distribution of PTP-HA to all the systems. The final design aims to be fully based on standard technologies and to be cost-efficient, seeking for interoperability and scalability, and minimizing the impact on other systems in the facility. An experimental setup has been implemented to evaluate and discuss the suitability of the solutions for the timing system by studying the synchronization accuracy obtained with NTP, PTP and PTP-HA under different network conditions. It includes a timing evaluation platform that tries to resemble the network architecture foreseen in the facility. The measured results revealed that PTP is the most limiting protocol for the second solution. Using the default PTP configuration, it tolerates less than 20% of maximum bandwidth utilization for symmetric bidirectional flows, and around 30% in the case of unidirectional flows (server to client or client to server), with the current setup and using switches without enabled timing support. This case study provides a better understanding of the trade-off between bandwidth utilization, synchronization accuracy and cost in these kinds of facilities.

Effect of Borrower's Socio-Economic Profile on Agribusiness Loans Default Rate in Agricultural Finance Corporation, Mount Kenya Region

Background: Agribusiness loans advanced by Agricultural Finance Corporation (AFC) in Mount Kenya Region have high default rate of 20.33% which compares unfavourably with 10% benchmark for all types of loans in Kenya. This is a challenge, given the strategic importance of agribusiness credit in mainstreaming livelihoods to alleviate poverty by offering occupational and professional opportunities. This study aimed at analysing effect of borrower’s socio-economic profile on AFC loan default rate in agricultural finance corporation, Mount Kenya Region.
 Methods: According to AFC records Mount Kenya region represents a branch network of 11 branches and a population of 3,002 agribusiness borrowers. Using a descriptive research design a sample of 300 borrowers was drawn from a combined list through systematic random sampling technique with an interval of ten. Primary data on borrower’s socio-economic profile was collected using a structured questionnaire. The data was analysed using Statistical Packages for Social Sciences (SPSS V.27) and Stata version. Using regression analysis, the effect of independent and dependent variable to predict default rate was estimated. ANOVA was performed to get the F-statistic so as to test for the adequacy of the regression model. The logit econometric model was used to specify the statistical relationship between the independent variable and AFC loan default.
 Results: Results of the study revealed that multiple borrowing and borrower-lender distance were significant at 5%. Farming experience, borrowing experience and off-farm income were significant at 10%, 5% and 1% levels of significance. Multiple borrowing and borrower-lender distance were found to have 5.5% and 0.8% associations with default rate, respectively.
 Conclusion: The findings show that to mitigate default, the borrower should avoid multiple borrowing and manage the friction of distance. The study is significant since it enlightens the credit stakeholders on collective efforts that are effective in addressing the problem of default. The study recommends government interventionist policy by facilitating uptake of agricultural insurance and subsidizing input costs. Borrowers are encouraged to embrace technology, team up as farming communities to look for markets and affordable inputs, adopt agricultural insurances and adhere to lending directives.