Loan Fees Research Articles

Analisis Peran Lembaga Keuangan Terhadap Pendapatan Usaha Mikro Kecil dan Menengah di Madura

Micro, small, and medium enterprises play an important role in the economic development of a country, but the growth of MSMEs still often faces various challenges and has not been as expected. The low capital owned and the difficulty of MSMEs in accessing sources of financing are still problems that hinder the growth of MSME businesses. The role of financial institutions in the income of micro, small and medium enterprises in the Madura region is the focus of this study. The quantitative technique used in this study is linear regression analysis using dummy variables. This study found that the income of micro, small, and medium enterprises in Madura is significantly affected by the test factors of loan size, loan fee, and loan tenure. Of the three variables, the loan cost variable has the greatest influence on MSME income. The dummy variable of loan size shows an increase in income for MSME actors of 665,846.73 rupiah. The dummy variable of loan costs shows an increase in income for MSME actors of 3,708,001,234 rupiah. And the variable loan duration is 50,789.79 which shows that the loan duration has a positive effect on MSME income of 50,789.79 rupiah.

The Loan Fee Anomaly: A Short Seller’s Best Ideas

We find that equity loan fees, which have been largely ignored by the anomalies literature, are the best predictor of cross-sectional returns. When compared with 102 other anomalies and other short-selling measures, the loan fee anomaly has the highest monthly long-short return (4.01%), the highest monthly Sharpe Ratio (0.66), and, unlike other anomalies, exhibits strong persistence throughout the sample. Although prior work has shown that existing anomalies reside in high loan fee stocks, we find that 42% of loan fee outperformance is due to unique information not contained in other anomalies. Future papers that examine cross-sectional predictors of returns should include the single most effective predictor: loan fees. This paper was accepted by Victoria Ivashina, finance. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.00152 .

Banks’ Market Power, Access to Finance, and Leverage

Abstract How does lending-market competitiveness shape new firms’ financing? Using a unique U.S. representative panel of new firms, we document that in more concentrated local lending markets: (a) new firms are less likely to access credit; (b) new firms have lower leverage; and (c) the best-performing firms are more severely affected by reduced debt financing. We develop a contingent-claims model with monopolistically competitive banks that rationalizes these facts and shows how credit-market conditions determine loan fees and concentration. Our findings highlight banks’ market power as a channel through which the financial sector influences firms’ development and, hence, economic growth. (JEL D82, G21, G32, G34, L26)

Do loan interest rate margins and loan fees move in the same direction and are they jointly determined?

A standard UK debt contract has two price components, the interest rate margin which is paid ex post and the up-front fee which is paid ex ante. The interest rate margin reflects risk, whilst the up-front fee is a mechanism for banks to price contract options and to screen borrowers, thus we cannot treat the fee as exogenous in interest rate margins as interest rate margins and fees may be jointly determined. Our empirical evidence shows that the two are indeed jointly determined, but that interest rate margins have a stronger (positive) effect on loan fees than vice-versa.

Influence of asset quality, capital adequacy, loan structure and macro-economic variables on financing of mortgage products by commercial banks in Kenya

The study sought to determine the influence of asset quality, capital adequacy, loan structure and macro-economic variables on Financing of mortgage products by commercial banks in Kenya. The study used a descriptive research design targeting 196 bank managers including, relationship managers, head of mortgage/retail sales, head of documentation, credit manager, head ofdocumentation, head of finance, and finally head of legal. Data collected was coded and cleaned before undertaking necessary analysis that comprised descriptive and inferential statistics. Descriptive statistics was done by means of frequency tables, mean, standard deviations, charts and figures, while inferential statistics included ANOVA, regression and correlation analysis. The results show that asset quality, capital adequacy, loan structure, macroeconomic variables jointly influence 81.5% of the mortgage financing. Further they were positively and statistically significant in predicting the variation in mortgage financing (F (4, 147) = 161.65, p<.000). The study recommends that banks should consider their credit portfolio in making decisions on financing mortgage products. More so, banks should favour adjustable-rate mortgages as opposed to fixed-rate mortgages and that banks should not charge high loan fee for mortgage products. Finally, it is recommended that banks should support the government housing finance systems by offering various mortgage loan flexibilities to developers of affordable housing products and that it should formulate policy and procedure on mortgages that can support commercial banks in financing mortgage products.

Blessing or curse? Government funding of deposit insurance and corporate lending

A key policy to limit the possibility of bank runs is an explicit deposit insurance scheme, which can be either privately or government funded. Using syndicated loans from 63 countries during the period 1985–2016, we study the effect of government involvement in deposit insurance funding on price and non-price characteristics of loans. We show that changes from purely private-funded to either government-funded or jointly funded deposit insurance increase all-in-spread-drawn by approximately 4.6 %, further increase loan fees, decrease loan maturity, and increase the use of performance pricing provisions. Our findings are consistent with the moral hazard problem behind government-funded deposit insurance schemes.

Shorting costs and profitability of long–short strategies

AbstractWe examine how the profitability of long–short arbitrage strategies based on anomalies is affected after adjustment for two shorting costs: implicit cost due to unavailability of stocks in the short‐leg to sell short and loan fees actually paid to stock lenders. The combined shorting cost amounts to almost 40 percent of long–short gross returns over the sample period from January 2006 to December 2017. After adjustment for these shorting costs, long–short arbitrage profits are thus reduced by almost 40 percent. Even after adjustment for risk, the proportion of shorting costs is also substantial. If other trade‐related transaction costs are considered, long–short arbitrage profits would be reduced further. Our results provide explicit evidence that casts doubt on the profitability of long‐short arbitrage strategies based on anomalies.

Innovation of Electronic-Based Multipurpose Credit Services to Improve Customer Satisfaction Through Loan Fee : A Study on Bank Jatim - Malang

The competition of financial services business is getting higher and encourages banks to optimize their efforts to reach as many prospective customers as possible. One of the efforts made is to update innovative banking credit services through the development of an electronic-based multipurpose credit service system. This research aims to find out whether the quality of service, product quality, and loan fee, affect customer satisfaction. This research uses a quantitative approach, data collection using questionnaires distributed to 150 customers of Jatim bank. Data analysis uses path analysis. This research found that The Quality of Service affects Customer Satisfaction but the Quality of Multipurpose Credit electronic application products does not significantly affect customer satisfaction; Quality of Service and Product Quality of Multipurpose Credit electronic application affects Customer Satisfaction through Loan Fees. This research has the implication that innovation policies on multipurpose credit services and borrowing costs are major factors that can improve customer satisfaction.

CATENA OF ABILITY UTILIZATION, INSTITUTION, BUSINESS DEALING AND BUSINESS CONDENSE

This study analyzed the effect of Ability utilization, establishments and monetary Dealing on business development of Pakistan for the time of 1985-2014. Vector blunder adjustment model is applied to dissect the short run and long run relationship among factors. Assessed outcomes uncover that Ability utilization, institutional quality, monetary Dealing, work and capital emphatically affect business development while shopper value record and loan fee adversely affect monetary development of Pakistan. It is proposed that administration should build the interest in Ability area and work on the institutional quality in the country while monetary changes and rebuilding of monetary area will advance private loaning so joblessness will be decreased.

The Predictability of Short Selling Loan Fees

The Predictability of Short Selling Loan Fees

Impact of Loan Provided by BRAC Microfinance on SME’s Improvement in Zanzibar

The main concern of this paper is to examine the impact of loan on the improvement of Small medium enterprises (SMEs) in Zanzibar. The study concentrated on amount of loan provided by BRAC and cost of charged by BRAC to SME’s in Zanzibar. The study conducted in West “A” District-Unguja. The study has mainly employed quantitative research approach with appropriate method of analysis for this study. The sample size for this study consists of 112 SMEs members supported and registered by BRAC, and survey questionnaire was used as data collection instrument. To achieve a credible result for this study, a standard multiple regression was used to analyze and interprets the collected data from relevant respondents. The results revealed that two predictors (loan amount and cost of loan) had a significant effect or impact on the outcome variable (SME’s improvement). In other words, the results of predictor variables show that; loan (β = 0.076, t = 1.977, p < 0.05), cost of loan (β = -0.900, t = -23.322, p < 0.05). The study concluded that the amount of loan received by loan beneficiaries are no affordable and not sufficient to meet the expectations of loan beneficiaries. Also, unfavorable loan fees payment slows down the SMEs operation. Finally, the study recommended that micro finance institutions should prepare the seminar and trainings to be given to the entrepreneurs on the loan management.

Penerapan Penetapan Jaza`ul Ihsan Pada Kontrak Pembiayaan Al-Qardhul Hasan Perspektif Ekonomi Islam

The journal entitled "The Application of Determination of Jaza'ul Ihsan on Al-Qardhul Hasan Financing Contracts with an Islamic Economic Perspective" is motivated by a draft contact in the application of financing for al-qardhul hasan products in several Islamic Financial Institutions, especially in KSPPS BMT NU in East Java which includes: contains the request for a jaza'ul ihsan fee (reciprocity) which is set at the beginning of the contract when the customer wants a loan with the product, so that at the time of repayment, the customer using the al-qardhul hasan product is required to pay off the loan fee according to the loan nominal and added with jaza'ul ihsan in accordance with the agreement in the contract. This study aims to analyze the application of the determination of jaza'ul ihsan to al-qardhul hasan financing contracts associated with several explanations, rules and opinions of experts on Islamic Economics in the hope of being a problem solving of every contract issue, especially in al-qarhul hasan financing products. The methodology or approach used in this paper uses a library research method or approach, while data collection is carried out by reviewing several books, journal and documents (both printed or electronic) as well as from several types of information or data sources that have been collected. relevant to the study. The results of this study conclude that the determination of jaza'ul ihsan on the al-qardhul hasan financing contract is contrary to the aims and objectives of al-qardhul hasan in Islamic Economics because the term al-qardhul hasan is not in fiqh muamalah but the rules are equated with will qard (debt). ) both in the provisions and rules described in the Qur'an, hadith or opinions of madhhabs and Islamic economists.&#x0D; Keywords: Jaza'ul ihsan, al-qardhul hasan product, financing contract, Islamic Economics

Changing Landscape of Indian Banking After Covid and Role of Banks in Revival of Economy

The digital revolution is a great test case for regulators who must adapt by adapting their work on rivalry and letting the benefits of progress go beyond financial stability. In this sense, supervisors must facilitate regulatory orientation and rivalry policy so that consistency does not become an obstacle to the section and neither does the transition become destabilizing. The rivalry can be grown from a slight orientation of the competitors, but at the risk of diminishing the benefits of the owner and, therefore, increase their risk including motivational forces. Also, you can change the era from main themes to non-banking elements. Since ancient times, banks have made enormous progress and have suffered and endured many emergencies. The currency crisis triggered by the Covid-19 pandemic could trigger another financial crisis. This outweighs the combination of loan fees, consistently low policies and competition from (unregulated) shadow banks and digital newcomers who have tried the mainstream business model over the past decade. The survey is the result of the banks. In this report we argue that the crisis of Covid-19 will accelerate the pre-crisis trends since the development repressed and low credit rates will continue for some time and digitization will be a great driving force.

Oil Price Volatility, Monetary Policy and Economic Growth in Some Selected Africa Countries

This research work assessed the relationship among oil Price Volatility, Monetary Policy and Economic growth in oil exporting Africa Countries somewhere in the range of 1990 and 2018. Specifically, the investigation looked into the impacts of macroeconomic factors on economic growth and broke down the interrelationships among monetary approach transmission instruments, Oil value stuns and yield development of oil exporting Africa Countries. Information for the investigation was sourced from World Development Indicators distributed by the World Bank, IMF online Database and Central Banks of chosen nations. The investigation employed Westerlund Error Correction Based Panel Cointegration test and Structural Vector Autoregressive (SVAR) as estimation methods. The unit root test resultshowed that the factors of intrigue were coordinated of a similar request that is I(1). Results from SVAR Impulse Response Functions demonstrated that the reaction of yield development to stuns radiating from both financial approach factors and unrefined petroleum cost was sure and huge all through the examination time frame. The outcomes further indicated that expansionary money related strategy that animates a reduction in household loan fee was more viable in expanding the yield development than contractionary monetary formation that motivates an increment local financing cost. It was discovered from the investigation that oil price volatility increase was just prone to modestly affect economic growth while oil price reduction has a huge negative impact on economic growth. This shows that the fall in oil price volatility have deteriorating impact on conversion scale, while oil price increment was seen as unessential to swapping scale development in oil exporting Africa Countries. In light of these discoveries, the analysis in this manner infers that there is deviated relationship among oil price volatility, monetary policy and economic growth in oil exporting Africa Countries. Keywords: Monetary policy, Oil price and Economic growth DOI: 10.7176/JESD/12-12-09 Publication date: June 30 th 2021

Price transparency in OTC equity lending markets: Evidence from a loan fee benchmark

We study the effects of a price transparency shock in the Brazilian equity lending market, an over-the-counter market. Previously, the available loan fee benchmark was the mean loan fee of the past 15 trading days. On March 1, 2011, this interval was reduced to three days, significantly improving short-sellers’ ability to predict current loan fees. We find that after the benchmark change, loan fees fell, lending volume increased, total lending revenue remained stable, high-cost lenders lost market share, and price efficiency increased. Our results suggest implementing price benchmarks in OTC markets can improve market quality.

Banks' Market Power, Access to Finance, and Leverage

How does lending-market competitiveness affect new firms' financing? Using a unique US representative panel of new firms, we document that in more concentrated local lending markets: (i) new firms are less likely to access credit; (ii) new firms have lower leverage; and (iii) the best performing firms are more severely affected by reduced debt financing. We develop a contingent-claims model with monopolistically competitive banks that rationalizes these facts and shows how credit-market conditions determine loan fees and concentration. Our findings highlight banks' market power as a channel through which the financial sector influences firms' development and, hence, economic growth.

Private Information, Securities Lending, and Asset Prices

Abstract We study the role of private information in the equity lending market in a rational expectations model with endogenous loan fees. When all investors are privately informed, an increase in information precision reduces the fee by increasing trade aggressiveness and decreasing demand dispersion. However, when some investors are uninformed, the information asymmetry tends to increase the fee, and, thus, the overall effect of an increase in precision is ambiguous. We show that the fee can be incrementally informative given the stock price and that fee opaqueness tends to increase the fee but has an ambiguous effect on the stock price.

Negative Interest Rate Policy of Banks in Japan: A Review

The negative interest rate policy (NIRP) that lowered the long-term rate below zero might have impacted positively in Asian economies like Japan. The main objective of this study was to anticipate the effects of NIRP in the Japanese economy where exponential growth is missing for the last few decades. This paper review literatures on the state of NIRP in Japanese banks that lost their profit margins in domestic markets but discovered a new prospect to generate profit after the NIRP was introduced in January 2016. Online libraries and Google scholar electronic databases were researched using free-text words and NIRP subject headings relevant to the topic. Most studies identified were exploratory and of varying methodological design. The inclusion studies found that the strategic decision of the central bank in Japan resulted in bank-explicit variables like capitalization; subsidizing structure; plan of action; financing cost presentation; and focused conditions seem to lessen banks' eagerness to loan in a negative loan fee setting. These challenges need to be addressed in a manner that will help realize Japan's economic potential. This study will help to instill interest among policymakers to think of financial disputes to effortlessly contribute towards the development of the country.

Mortgage Broker Loan Pricing Leading Up to the Financial Crisis: Were Yield Spread Premiums the Only Problem?

ABSTRACT This article examines mortgage broker pricing in New York during the years leading up to the financial crisis. Broker compensation practices in 2005 through 2007, primarily the use of yield spread premiums (YSPs), led the Federal Reserve to promulgate new rules in 2011 that disallowed loan originators who receive compensation directly from the consumer from also receiving compensation from the lender or another party. This consumer testing rule passed because the board found that consumers were not aware of the payments lenders make to originators and how those payments can affect the consumer’s total loan cost. Focusing on total costs paid by the borrower, we find that minority borrowers paid more in total fees as a percentage of the loan amount when including or excluding YSPs. Moreover, white borrowers were more successful in substituting YSPs for up-front cash fees, resulting in a reduction in total loan fees compared with minority borrowers. This may reflect information advantages for white borrowers that allow them to more accurately assess the total cost of loans.

COVID-19 Impact on Sri Lankan Economics

COVID-19 is quickly spreading across the world since 2019(2020 WHO) it has been really difficult for humankind in the new past years. The pandemic outbreak radically affected China's economy, the stoppage in China's economy affected rest of the world too. Sri Lanka is additionally not an exemption for this. The first COVID-19 case was accounted for in Mar 11 in Sri Lanka after that numerous other positive COVID-19 cases were recognized and government has taken pre alert techniques to control the pandemic effectively for around a half year yet presently the circumstance is out of our hand. COVID-19 pandemic made more adverse consequences in key pay areas like the travel industry, send out profit, little and medium business, tea, clothing and material fares. Sri Lanka's tea creation for the period January - December 2019 totaled 300.1 million kgs and it was decreased to 278.5million kgs in January – December 2020 (Tea Exporters Association Sri Lanka). Clothing trades for the year 2019 was 481mn$ diminished to 382.28mn$ in 2020(Apparel exporters affiliation) Also, Colombo stock exchange detailed a verifiable low in mid-March, in addition Sri Lanka's outer area execution debilitated because of absence of fares this was because of the movement limitations, Closure of ports and air terminals. In the interim the swelling of the country in 2019 announced 4.3% increased to 4.56% in 2020. Be that as it may, a few suggestions carried out by Central Bank of Sri Lanka (CBSL) to reinforce and reconstruct the financial. Ban offices allowed for the advances, working capital advances with a low loan fee to help the limited scale retailers and little medium business. As of now Sri Lanka recuperating from the pandemic effect and attempting to recuperate the monetary log jam.