Lending Technologies Research Articles

Pledgeability and bank lending technology

What is the effect of an expansion of eligible collateral on different lending technologies? We show that expanding eligible collateral (i) increases transactional (T) banks’ interest income and decreases relationship (R) banks’ interest income, (ii) increases average loan volume more for T- than for R-banks, (iii) decreases average loan risk and (iv) decreases T-banks’ non-interest income while it increases R-banks’ non-interest income. (v) In sum, T-banks’ profitability increases and R-bank’s profitability remains unaffected. Expanding the set of collateral from immovable to movable assets typically benefits SMEs because it allows them to obtain secured loans instead of unsecured ones. A-priori, it is unclear whether SMEs will continue borrowing from R-banks or switch to T-banks. R-banks benefit from customer relationships and T-banks have the collateral screening technology in place. We show that competition between T- and R-banks gives T-banks a comparative advantage, but R-banks can substitute lost interest income with non-interest income.

ANALYZE THE INFLUENCE OF THE TECHNOLOGY ACCEPTANCE MODEL (TAM) ON THE USE OF FINTECH LENDING

This study endeavors to explore the impact of perceived usefulness and perceived ease of use on the intention to use fintech lending applications in Indonesia. The independent variables under scrutiny are perceived usefulness and perceived ease of use, while the dependent variable is the adoption of fintech lending applications. Employing a quantitative approach, this research employs a descriptive methodology. Primary data collected from 182 respondents serves as the basis for analysis. Sampling in this study is conducted using a non-probability technique, specifically the purposive sampling method. Questionnaires are distributed based on specific criteria, targeting individuals who have utilized fintech lending applications and reside in Indonesia. The findings, derived from multiple regression analysis, reveal a significant positive correlation between perceived usefulness, perceived ease of use, and the adoption of fintech lending applications in Indonesia. The research concludes that users use fintech lending technology when they find it easy to access loan funds quickly and when the application features do not ask for various types of information and documents.

Revisiting SME Financing in Bangladesh

Small and Medium Enterprise (SME) Financing is a topic of significant research interest to academics and an issue of great importance to the policy makers around the world. Economic, as well as technical and social arguments warrant the promotion of SMEs, as they create large scale, low-cost employment opportunities, use locally available inputs and technologies, mobilize small and scattered private savings, develop entrepreneurship, and correct the regional imbalance in development that exists in developing countries. Despite all these potentials, SMEs are disappearing, abandoning the potential role they could have played in economic development. Several studies have identified the major obstacles that include, but not limited to, financing, infrastructure facilities, taxes and regulations and stability in policies. This paper focuses on the financial constraints in Bangladesh. In Bangladesh, among the formal sources, commercial banks are not interested because of the high risk and high supervision cost associated with this type of financing. Absence of sound collateral puts SMEs at a relative disadvantage. However, we have found that some of the commercial banks have some ‘innovative’ products or services targeting at SMEs only, while others have ‘repackaged’ some of their existing products as SME products. The contribution of commercial banks is meager except BASIC Bank Ltd. and BRAC Bank Ltd. It has been observed in the study that commercial banks disburse loans to this sector only when government introduces ‘credit guarantee scheme’ in different capacity. ‘Relationship lending technologies’ should be introduced in case of the existing ‘transaction lending technologies

An Analysis of Indian Overseas Bank's Case Study on the Conceptual Framework of Lending Technologies for Financing Small and Medium-sized Businesses

This to examine the Indian Overseas Bank’s credit facilities MSMEs with various financing options available and also examine the constraints in credit facilities. The sample respondents was 90, which comprised of seventy-one manufacturing enterprises and nineteen service enterprise respondents. Statistical tools such as Percentage analysis, Chi-square Test, factor analysis was used to analyse the data. The study revealed that, among manufacturing enterprise and service enterprise respondents, majority (67.60 per cent and 57.89 per cent) were small entrepreneurs. in middle age group (37.78 per cent). About 40 per cent were graduates and 78.89 per cent were sole proprietors. There was a significant association between type of business and age group, form of organization and business experience. 98 per cent of respondents were aware about term loan of which 65.90 per cent availed loan. 91 per cent of the respondents were aware of working capital finance of which 70.73 per cent availed loan. Bank officers (67.77 per cent) were main source of information. The source of finance (64.44 per cent) was IOB loan. They were willing to avail loan amount of Rs. 1-10 lakhs for two years. Maximum respondents repaid 25-50 per cent of loan. Difficulties faced by the customers in availing credit facilities were grouped under seven factors. Top five ranks were given to the statements such as; network of bank branches is not good, no wide range of services, non-availability of timely rehabilitation finance, lack of dissemination of information and lack of MSME loan processing centres at key locations. Majority of the respondents suggested for specialized branches of MSMEs (40 per cent).

Entrepreneurial financing: how global and regional export intentions affect financial and non-financial choices for small and midsized enterprises in low-income countries

PurposeThe study explores how the intention to export affects financing and non-financing variables for small and medium-sized enterprises (SMEs) in a low-income country (LIC). The objectives of this study are (1) to discern between regional and global exporting and (2) to evaluate its policymaking implications.Design/methodology/approachPrimary survey data were collected from 330 Rwandan SMEs and were analysed using ordered logistic models as an application of the expectation-maximisation iterating algorithm, which was tested for robustness using a sampling model variation.FindingsThe results show that alternative sources of finance are the predominant choice to finance the intention to export within and outside Africa. As the scope of export intentions broadened from regional to global, there was a shift in preferences from less formal to more formal lending technologies, moving from methods like factoring to lines of credit. Moreover, reliance on bank officers became more significant, with increasing marginal effects. Finally, the study determined that government financing schemes were not relevant for SMEs pursuing either regional or global exporting.Practical implicationsWhilst alternative sources of finance predominate the export intentions of Rwandan SMEs, establishing a robust banking relationship becomes crucial for global exporting. Despite this implication, the intention to export should prompt more transparent communication regarding government financial support programmes. There is an opportunity for increased usage of relationship lending to customise support for SMEs involved in exporting, benefiting both the private and public sectors.Originality/valueThis study accentuates how export distance alters SME financing priorities. The results also contribute to understanding how the value of relationship lending changes when less familiar markets (i.e. global exporting) are the objective. Moreover, the study offers a new perspective on how institutional voids affect entrepreneurial financing decisions in LICs.

Efficiency and financial risk management practices of microfinance institutions

AbstractMicrofinance institutions (MFIs) have evolved in different and complex ways to solve various market frictions, with some of them providing a wide range of financial products and using different lending technologies to reach poor and underserved populations. As a result, some MFIs are more efficient than others, but are efficiency gains aligned with risk management practices? The specific characteristics of the microfinance industry make the answer to this question less obvious than that of commercial banks. This paper tries to shed light on these issues by analysing the efficiency and risk management of MFIs and describing the potential implications of these relationships for the microfinance industry. After considering several measures of financial risk management ratios commonly used in the microfinance literature, our results show that cost efficiency improves asset quality and solvency of MFIs, but also reduces the need for holding idle cash or liquid assets. The results of this paper can help academics, policymakers, and regulators to better understand the impact of cost efficiency on financial risks management practices in the microfinance industry.

A novel MABAC approach for multi-attribute group decision-making with single-valued neutrosophic sets: An application in assessing microfinance group lending performance

In the 40 years of global microcredit practice, loan technology has played a positive role in microcredit as one of the most important supporting elements. The development and evolution of microcredit institution lending technology is the result of comprehensive consideration of specific regional economic, social, cultural, and geographical factors. In the context of the diversified trend of microcredit technology, choosing loan technology reasonably, exploring flexible guarantee conditions, and innovating diversified loan technology combinations will become practical problems faced by microcredit institutions, and also the direction of theoretical research. The timely innovation of group loan technology in microcredit has practical value and theoretical significance for promoting the innovation of financial agricultural products in the implementation of China’s rural revitalization strategy, as well as bridging the theoretical controversy of microcredit loan technology. The performance evaluation of microfinance groups lending is a MAGDM issues. In this paper, the distances measures of single-valued neutrosophic sets (SVNSs) and maximizing deviation method (MDM) is used to obtain the attribute weight values. Based on the classical Multi-Attributive Border Approximation area Comparison (MABAC) method, the single-valued neutrosophic numbers MABAC (SVNN-MABAC) method is constructed for MAGDM under SVNSs. Finally, an example for performance evaluation of microfinance groups lending and some comparative decision analysis are constructed to verify the SVNN-MABAC model.

Podcast resources in academic libraries: Audio lending technology and studio recording spaces in American research libraries

This paper aims to discover the prevalence of audio lending technology in American research libraries and to determine any prevailing trends in the specific kinds of equipment used by these institutions. The researcher looked at the website of every member of the Association of Research Libraries and recorded information about audio lending technology in five categories: podcasting kits, USB microphones, other microphones, digital voice recorders, and audio interfaces. Information about a podcast recording studio, both in the library and on the greater institution’s campus was also recorded. The results indicate a majority of American research libraries offer a recording space and lendable audio technologies. Digital voice recorders, USB microphones, and non-USB microphones are the most common types of equipment offered.

Assessment of the effectiveness of credit operations management as a factor in the development of the banking activity

The main task of banks is to issue loans, which are the backbone of the modern economy, an integral element of the country's economic development. Lending is currently used by both individuals and legal entities, that is, everyone uses loans, starting with state and ending with citizens. For commercial bank in these conditions, it is important not only to correctly form loan portfolio on various grounds, but also to monitor changes in timely manner, which are carried out through in-depth analysis. At the same time, each bank develops its own lending technology based on digital technologies and new technical solutions. The purpose of study is to assess effectiveness of credit operations management of commercial bank, on example of the activity of PJSC Bank “FK Otkritiye”. Study uses methods of comparative analysis, synthesis, and graphical method to visualize obtained results. Based on results of study, author determined dynamics of corporate lending in commercial bank of PJSC Bank “FK Otkritiye” and changes made during analyzed period, according to results of which it was determined that share of corporate lending initially increases by 2021, and tends to decline by end of 2022. So, on 01.01.2020, share of corporate lending was 1,3 percent, on 01.01.2021 is 3,8 percent, after which the value declined again and returned to the value of 1,2 percent. Increase in corporate lending in 2021, according to results of analysis, was achieved by attracting large corporate clients in this period. As result, in order to improve corporate portfolio of commercial bank, author has developed new proposals for improving it and achieving performance indicators. Based on results of study, author has formed recommendations for increasing reserve funds. In general, it should be emphasized that effective work of bank is necessary, ensuring increase in lending volumes and stable financial indicators, the bank’s desire to increase customer confidence, active credit policy and worthy place in rating of commercial banks.

Lending Technologies, Firm Characteristics and Small Business Efficiency in South Africa

Internal factors of Small, Micro and Medium Enterprises (SMMEs) determine their technical efficiency, while external funding characteristics improve the quality of internal factors. Since the type of lending institutions and lending technologies primarily influence the lending decisions of financial institutions, firms’ technical efficiency may be linked to such external factors. Literature on determinants of the technical efficiency of SMMEs mainly focuses on internal factors excluding the financial access paradigm which stifles the effectiveness of internal factors on technical efficiency. Based on a sample of 321 randomly selected SMMEs from Eastern Cape Province in South Africa, the study measures technical efficiency using Data Enveloping Analysis and differentiates technical efficiency among firms using Post Hoc Test Pairwise Comparisons derived from factorial ANOVA. Both main and interaction effects were captured in the analysis. Our results, which pinpoint four main findings, show technical efficiency paths followed by firms vary significantly as a result of both internal and external factors. In particular, the effects of other factors are amplified by race. As a consequence, three main contributions emerge from the study.

Loan portfolio structure: the impact of foreign and Islamic banks

PurposeThis study aims to investigate the role of bank ownership (foreign versus domestic) and the type of service (Islamic versus conventional) on bank lending to large enterprises and small and medium enterprises (SMEs).Design/methodology/approachBased on previous literature, the study proposes that foreign banks lend more to large enterprises and less to SMEs than domestic banks do. It also proposes that Islamic banks lend more to SMEs than conventional banks do. It utilizes unique hand-collected data of Jordanian banks from 2007 to 2018 to carry out its investigation. It applies regression estimation methods and propensity score matching to test its hypotheses.FindingsConsistent with prior empirical evidence, the findings show that foreign banks lend significantly less (more) to SMEs (large enterprises) than their domestic counterparts. However, the findings indicate that Islamic banks lend significantly less to SMEs than their conventional counterparts. Further analysis shows that Islamic banks operating in Jordan are ultimately owned by foreign investors hence their incentives to adopt full features of Islamic financial instruments are confounded by their incentives to utilize transaction lending technologies which in turn attenuates the expected positive impact of Islamic banking services on SMEs finance.Originality/valueThis research provides novel evidence on the impact of Islamic banks on SMEs finance as the results suggest that the success of Islamic finance in bridging the gap of SMEs finance is conditional on embracing its full features.

Firm–bank “odd couples” and trade credit: Evidence from Italian small- and medium-sized enterprises

One of the most crucial obstacles for small- and medium-sized enterprises is access to credit primarily because of their high opacity. The existing literature underlines that relationship banks specialize in analyzing opaque firms, thereby allowing them better access to credit; however, what can opaque firms do if they cannot find a relationship bank? By using an Italian database, with more than 900 firms, we reveal that when opaque firms deal with transactional banks (the “odd couples”), they use a greater portion of trade credit. This result is robust to alternative measures of trade credit and lending technologies. We further analyze the mechanisms driving the association between odd couples and trade credit use. Regression results suggest that the positive association is particularly significant for firms with more market power, not “captured” by their primary bank, and located in areas with high levels of social capital.

Relationship lending, access to credit and entrepreneurial orientation as cornerstones of venture financing

PurposeThis paper investigates the effect of entrepreneurial orientation (EO) on small- and medium-sized enterprises' (SMEs) access to credit. Starting with the idea that SMEs' strategy-making process, structures and behaviour can favour credit access, the authors also explore the moderating role of bank lending technologies in shaping this relationship.Design/methodology/approachThis study relies on a unique survey of Austrian and Italian SMEs which contains detailed information on access to credit, EO dimensions, relationship lending and firm-level characteristics. The authors perform stepwise logistic regressions to assess whether EO interacts with SME's access to finance, and how relationship lending enhances this relationship.FindingsProactiveness, autonomy and competitive aggressiveness are important constructs for improving access to bank financing. Those dimensions became more important when a relationship bank is involved, suggesting a role for relationship lending in overcoming SMEs' opaqueness. In addition, relationship lending is crucial for innovative SMEs in overcoming credit denial rates.Research limitations/implicationsThe small sample did not allow to analyse the effect of EO on discouraged borrowers. Furthermore, alternative measures of relationship lending (such as geographical proximity or the length of the relationship) and the share of credit granted by the relationship bank would have been interesting to further validate our results.Practical implicationsThis study shows that EO dimensions and the type of lending technology are relevant for the financial success of SMEs. More precisely, the authors show that diversity within the banking system helps innovative, autonomous, proactive and competitive SMEs. These important pieces of soft information are injected into the final lending decision when a relationship bank is involved. The evidence suggests the need for SMEs to interact with local banks to fully exploit their EO posture.Originality/valueTo the authors' knowledge, this paper is the first attempt to analyse whether relationship lending can affect the EO–credit access relation.

СУВЕРЕННАЯ ЭМИССИЯ И СОЦИАЛЬНЫЕ ФИНАНСОВЫЕ ТЕХНОЛОГИИ КАК ИНСТРУМЕНТ УСКОРЕННОГО РАЗВИТИЯ ЭКОНОМИКИ РОССИИ

In this scientific work, using sovereign emission and social financial technologies, the development process from 2022 to 2031 (10 years) of one of the large enterprises characterized by the average value of revenue, profitability, wages and the number of employees in Russia is modeled. As a result of interest-free government lending and social financial technologies, in the third year of modeling, the volume of tax revenues will exceed the body of the loan by 66 billion. rub. for the 5th year by 149 billion, for the 10th year by 577 billion rubles. Revenue at the enterprise for 10 years increased by 2.05 times, wages by 3.334 times, deductions for development by 2 times.

Investing in Bank Lending Technology: It Spending in Banking

Investing in Bank Lending Technology: It Spending in Banking

Factors Influencing Intention to Use SPayLater in Indonesia

Payment instruments are part of technological developments. The existence of this development is utilized by finance companies such as peer-to-peer lending technology. Peer-to-peer lending in Indonesia continues to increase, one of the products of peer-to-peer lending companies is SPayLater which is a product of Shopee Indonesia and PT. Lentera Dana. This study provides an overview of the effect of perceived ease of use, perceived usefulness, perceived compatibility towards attitude toward using and perceived cost, subjective norm, personal innovativeness on intention to use. This study uses a quantitative method by distributing 250 online questionnaires to Shopee consumers. Data analysis was carried out using SEM and assisted by PLS 3 software. The results of this study indicate that perceived ease of use does not affect attitude toward using SPayLater payment system, perceived cost and personal innovativeness do not affect intention to use the SPayLater payment system, while perceived usefulness, perceived compatibility, attitude toward using and subjective norm affect the intention to use the SPayLater payment system.

Factors Influencing Intention to Use SPayLater in Indonesia

Payment instruments are part of technological developments. The existence of this development is utilized by finance companies such as peer-to-peer lending technology. Peer-to-peer lending in Indonesia continues to increase, one of the products of peer-to-peer lending companies is SPayLater which is a product of Shopee Indonesia and PT. Lentera Dana. This study provides an overview of the effect of perceived ease of use, perceived usefulness, perceived compatibility towards attitude toward using and perceived cost, subjective norm, personal innovativeness on intention to use. This study uses a quantitative method by distributing 250 online questionnaires to Shopee consumers. Data analysis was carried out using SEM and assisted by PLS 3 software. The results of this study indicate that perceived ease of use does not affect attitude toward using SPayLater payment system, perceived cost and personal innovativeness do not affect intention to use the SPayLater payment system, while perceived usefulness, perceived compatibility, attitude toward using and subjective norm affect the intention to use the SPayLater payment system.

Analysis of the Performance and Influence of Modalku on MSMEs during the COVID-19 Pandemic

In today's digital era and the ease of technology, startup business in Indonesia is growing rapidly. The startup business seems to be the new prima donna in the business industry. Almost every year, maybe even every month there are many startup businesses of various types and circles in the technology field. At least until now there are thousands of local startups in Indonesia.Modalku is a financial technology (startup) company engaged in peer-to-peer lending and based in DKI Jakarta, Indonesia. Modalku is an online-based peer-to-peer (P2P) lending platform that brings together SMEs (Small and Medium Enterprises) who need capital and are creditworthy with lenders who want to find investment alternatives. Under the auspices of PT. Mitrausaha Indonesia Group, Modalku provides money loan distribution services based on financial information technology (Fintech). As a platform, Modalku acts as an intermediary between borrowers and lenders. Of course, not only as an intermediary, Modalku also manages and channels funds from lenders who act as investors to SMEs who need business capital.The COVID-19 outbreak has had a serious impact on almost all countries in the world, including Indonesia. The impact is not only in one area, but in almost all existing activities. One aspect of concern in the midst of the Coronavirus outbreak is investment. The existence of various restrictions in a country certainly has an impact on economic activity. As is well known, the COVID-19 condition has affected several MSME business sectors, including several MSMEs who have become borrowers in Modalku.A peer to peer (P2P) lending technology (fintech) company, Modalku, applies a number of responsible lending principles as a risk mitigation measure from the impact of the corona virus (COVID-19). Co-Founder & CEO of Modalku, Reynold Wijaya, said that this principle is the principle of Modalku's operation in assessing MSME borrowers and their financial ability to repay loans. Reynold said, the business growth strategy in the midst of the COVID-19 outbreak was very focused on Micro, Small and Medium Enterprises (MSMEs) and their networks. There are 3 steps that will be implemented in the future. First, Modalku will carry out a more comprehensive selection process for prospective borrowers and MSMEs who have become borrowers at Modalku. Second, Modalku will react more quickly to changes in macroeconomic conditions by adjusting the limit as well as the loan period (tenor). The loan limit and tenor figures will be adjusted to the type of loan and the business profile of each MSME. Adjustments will be made on a case by case basis. Third, his party will maximize collaboration with e-commerce platforms, where most of the sellers are in the micro segment. He said, in the current condition of the importance of physical distancing, business transactions through e-commerce can develop well because people will tend to choose online shopping to meet basic needs and medicines. The loan limit and tenor figures will be adjusted to the type of loan and the business profile of each MSME. Adjustments will be made on a case by case basis. Third, his party will maximize collaboration with e-commerce platforms, where most of the sellers are in the micro segment. He said, in the current condition of the importance of physical distancing, business transactions through e-commerce can develop well because people will tend to choose online shopping to meet basic needs and medicines. The loan limit and tenor figures will be adjusted to the type of loan and the business profile of each MSME. Adjustments will be made on a case by case basis. Third, his party will maximize collaboration with e-commerce platforms, where most of the sellers are in the micro segment. He said, in the current condition of the importance of physical distancing, business transactions through e-commerce can develop well because people will tend to choose online shopping to meet basic needs and medicines.Modalku relies on its unique strengths when compared to other established financial industries. In contrast to banks which basically use their own funds to provide loans to borrowers, Modalku gives many investors the freedom to choose any business they want and invest in as much business as possible for a relatively small amount of money. Modalku has funded more than 45 activity loans, totaling more than US $ 900 000 and the amount is still growing. Small and Medium Businesses have become the backbone for the Indonesian Economy and of course this business model will greatly encourage Indonesia's economic growth. This kind of growth is primarily driven by helping SMEs easily access loans and grow their businesses.

Local banking and manufacturing growth: Evidence from India

This paper explores the relationship between local banking development and the growth of the manufacturing sector using district-level data from India. The results show that banking development at the local level is important for the growth of manufacturing in the region. We find that sector-specific credit, and not the total credit in the district, has a positive impact on local manufacturing output; suggesting that sector-specific lending technology is important. Further, we find that the constraints due to credit availability for manufacturing are lower in districts with higher literacy levels.

Analysis of Foreign Bank Operation- Comparison of Creditor Rights and Information Sharing

The continued operation of foreign banks is of great concern. This article compares and analyzes the two major influencing factors of foreign bank operations- creditor rights and credit information sharing. In addition, this article also discusses whether we should pay more attention to creditor rights or credit information sharing, taking consideration of the advantageous lending technology (SME credit scoring model) of foreign banks.