Loan Supply Research Articles

Role of Microfinance Institutions in Growth of Micro and Small Enterprises in Kebridehar City, Ethiopia: A Case of Rays Microfinance Institution

This study investigated the influence of microfinance institutions (MFIs) on the development of micro and small enterprises (MSEs) in Kebridehar City Administration. The objective was to assess the role of MFIs in the growth of MSEs, specifically focusing on aspects such as loan provision, financial skills training, role modelling and savings mobilisation. The researchers collected data from 170 MSEs that utilised the services of MFIs, using both secondary and primary sources. Descriptive and inferential statistics were employed to analyse the data, revealing that loans, financial skills training, savings mobilisation and role modelling all had a significant impact on the growth of MSEs in the city. This study enhances our understanding of how these factors contribute to the development of MSEs.

MAIN DIRECTIONS OF BANK LOANS IN CREDIT MARKET

Financial analysis in credit market and commercial banks, which have been an important factor of economy and human life and activity currently, study of financial-economic results of activity of a bank, determination of main directions of development of the bank and main factors of financial business processes, determination of purpose-oriented special knowledge and growth rates, etc. Different economic sources, internet materials have been applied as a theoretical and methodological basis. As systematization of loans in bank lending system is a theme of the research, methods such as analysis, induction and deduction have been used. Main scientific innovation that has been put forward: In this field, one of the most important issues is, certainly, organization of organization system of information issues, which have the most significant role in determining and implementation of successful demand and supply of bank loans in credit market and main directions of bank loans in credit market. Results of the research: Finding perspective improvement ways of commercial banks Development of credit system, directly improved by banks, significantly positively effects progress of country economy Information tools and technology play the most important role in improving credit market now.

Macroprudential policy and systemic risk in G20 nations

Using a panel of 496 banks from the G20 nations, the study assesses the role of macroprudential policies in reducing systemic risk. The study further assesses the utility of these policies in conjunction with monetary policy instruments and bank and country-specific characteristics and finds the significant impact of macroprudential policies in curbing systemic risk and promoting economic stability. The study finds this relationship to hold regardless of economic conditions like inflationary pressure and financial distress. The result highlights that easing macroprudential policies during financial distress can help banks cope with systemic losses. We split the macroprudential policies into policies targeting the demand and supply of loans and find complementarity among the policies to reduce systemic risk. Our results demonstrate the heterogenous effect of macroprudential policies in limiting systemic risk, with the effect varying with bank size, leverage, liquidity, and concentration of loans. Finally, we find a moderating role of these policies in limiting the impact of uncertainties on systemic risk.

Women’s coping and adaptation strategies to climate change: a case of the Dodoma Region

ABSTRACT Climate change is escalating in intensity, frequency, and complexity. Its related threats have profound implications for humanity, particularly women. Measures to cope with and adapt to it have been researched in general and does not focus on the role of women in the specific community, who bear the brunt of the strife associated with climate change. It is from this view that this research assesses the effects of women’s coping and adaptation mechanisms to climate change. Data were collected through household surveys, key informant interviews, observation, and documentary reviews. The collected data were descriptively analysed with the aid of SPSS version 20 and Microsoft Excel. Results indicate that communities understood climate change in terms of variability in rainfall patterns and amounts, water availability, increased incidences of drought, and decreased agricultural yields. Such events reduced agricultural productivit and led to the reoccurrence of food insecurity. Women grew drought-tolerant and early-maturing crop varieties, walking long distances to fetch water, crushing pebbles, and engaging in small vending businesses, which had some effects, including falling into family conflicts, diseases, and food insecurity. The study suggested that there is a need for upscaling awareness and capacity building on good agricultural practices, the provision of loans to small vending businesses, and the provision of inputs that assist women to cope with climatic changes smoothly.

Quantitative Easing Impact on Market Liquidity and Inflation

Quantitative easing (QE), mainly including large-scale purchasing, affects the market and economy by liquidity channel. This channel includes two aspects: loan supply and liquidity increases caused by large-scale purchasing. The influence of QE on liquidity is not clear enough. Also, whether such a liquidity creation will lead to inflation needs to be emphasized. This article provides an in-depth analysis of the impact of quantitative easing (QE) on liquidity creation and explores the potential relationship between QE and inflation. The article, based on investigating previous research, gives an overview of the process of quantitative easing’s impact on liquidity creation through large-scale purchasing and lending channels. Meanwhile, the article discusses the possibility of quantitative easing leading to inflation. In conclusion, large-scale purchasing creates market liquidity by increasing loan supply and affecting the securities market. Furthermore, the investment shows that quantitative easing would not generate inflation. The article provides an overview of liquidity creation caused by QE and the potential possible relation between QE and inflation and provides a reference to the future.

Attracting Private Investment to Renewable Energy Projects in India

Attracting private investments to renewable energy projects is a topic of significant debate within academic circles. This study investigates the relationship between green fiscal policy and green monetary policy concerning investments in renewable energy in India, spanning from 1990 to 2021, employing the ARDL (Autoregressive Distributed Lag) technique. The findings reveal that green taxes can positively or negatively impact investments in renewable energy sources. Furthermore, green monetary policy, mainly through the provision of green loans, accelerates investment inflows into renewable energy sources in the short and long terms. Challenges hindering private investment in India's renewable energy sector include compounded risk and inflation. Nonetheless, financial development and literacy rates are crucial in expanding investment in renewable energy sources. Based on these findings, practical policy recommendations for India entail enhancing sustainable literacy through green education, promoting social inclusivity, and establishing effective monetary and fiscal policies.

Ad hoc bank taxation and credit supply

AbstractThis paper studies the introduction of new temporary taxation on banks and its effects on banks' lending decisions. Focusing on a unique policy experiment in Slovenia in 2011, where the government imposed a 0.1% tax on banks' total assets, I find that the introduction of the tax resulted in a lower credit supply of loans to corporates. In particular, for each percentage point increase in the share of tax in the capital, banks charge, on average, 8 basis points higher lending rates and decrease their lending amount by 0.5%. The findings of this research carry strong policy implications for countries contemplating or having already implemented windfall or other temporary taxes on banks. The introduction of the tax might lead to a reduction in lending beyond what would be warranted from the standpoint of monetary or other policies.

Youth Migration and its Resultant Effect on Small-Scale Fish Farming in Southwest Nigeria

The study aimed at assessing the effects of rural youths’ migration pattern on small-scale fish farming in southwest Nigeria. Primary data were obtained from 440 fish farmers with the aid of a well-structured questionnaire, using multi-stage random sampling technique. Data collected were analyzed using descriptive statistics and likert scale rating techniques. The results showed that majority of the fishers were married males with mean age, household size and fishing experience of 44 years, 6 persons and 14 years respectively. It was further revealed that scarce employment opportunities (89.1%), flood/drought (85.7%), poverty (79.8%) and insurgency/displacement (75.5%) were the major push factors triggering rural youth’s migration in the study area while attractive wages/high income (98.0%), diverse employment opportunities (90.2%), alternative source of income during off season (86.1%) and availability of improved technologies (70.7%) were the major pull triggering youths’ migration in the study area. Thus, provision of loan to fishers at flexible interest rate, availability of improved fishing equipment, establishment of vocational training centres, integrating rural youth into empowerment programmes and provision of improved fishing methods to attract youth were the main strategies that could be used to checkmate rural youth migration in the study area. It was therefore recommended that Bank of Agriculture should be encourage to give out minimal loan interest rate to fishers at flexible repayment plans, empowerment/skills acquisition/entrepreneurship programmes should be established.

Factors influencing women farmers’ participation in agricultural cooperatives in Ondo-State, Nigeria

Cooperative societies provide channels for sharing of input where women farmers can pool their limited resources together to maximize agricultural output and food security in rural areas. This study, therefore, analyzed factors influencing women farmers participation in agricultural cooperatives in Ondo State, Nigeria. The specific objectives of the research were to describe socio-economic characteristics of women farmer’s participation in agricultural cooperative societies, determine the level of participation of women farmers in agricultural cooperatives and examine factors that motivate participation. Data were analyzed using descriptive statistics, Likert type scale, and Pearson Product Moment Correlation analysis. The results revealed that women farmers in the study area were average aged (42.9 years) and mostly possessed tertiary education (38.3%), mean annual income (₦777,846) with farm size (0.8 hectares). The level of participation in agricultural cooperative is high (60.4%). Accessibility to loan (M. S= 3.50), getting information (M. S= 3.42) and input facility (M. S= 3.40) were top most factors that influenced participation in cooperatives among the women. At P< 0.05, Age, marital status and income realized per annum were positively significant to the level of participation in cooperatives. The study recommends the timely provision of loan to enable women farmers expand the scope of their farming activities, increased access to training programs for women farmer leaders in cooperatives as well as extension education should also be intensified.

Agricultural Land Pawning as a Social Institution in Wono Agung Village Tulang Bawang District

Agricultural land pawning, as outlined in Law No. 56/1960 on the Determination of Agricultural Land Area, is characterized as a collateral transaction where agricultural land is mortgaged or pledged. Social institutions can play a key role in this process, acting as facilitators for loan provisions against land collateral and helping to evaluate and understand the motivations behind agricultural land pawning. This research adopts an empirical normative approach to assess the practice. The findings reveal that agricultural land pawning in Wono Agung Village is conducted in two principal manners: verbally and in writing, aligning with the stipulations of Article 7 of Law Number 5 of 1960. The residents of Wono Agung Village typically engage in pawning their agricultural land for several reasons, including the need for capital, education expenses, expansion of agricultural land, general economic difficulties, and other urgent necessities. Challenges in the implementation of agricultural land pawning arise from issues involving both the pawn recipients and the landowners. Despite these obstacles, agricultural land pawning functions effectively as a social institution, offering a viable solution to the economic struggles faced by the villagers. These social institutions play a pivotal role in enhancing the welfare and economic conditions of the agricultural community in Wono Agung Village.

MEASURES OF STATE SUPPORT DURING THE FAMINE OF THE 1930S IN CENTRAL KAZAKHSTAN

In the article, the authors consider measures to provide state aid during the famine of the 1930s in the territory of Central Kazakhstan. The purpose of the article is to consider in the regional aspect the main measures taken in Central Kazakhstan as the main measures to eliminate the consequences of hunger and to provide food assistance to the starving population. Based on archival documents and collections of materials, the authors managed to identify that the state has worked out several ways to help the hungry in order to eliminate the consequences of hunger. First, it is the provision of food, industrial goods and loans to starving areas. Secondly, the issuance of permits for the maintenance of livestock in settled areas to restore livestock production, and thirdly, a reduction in the grain delivery plan, or exemption from it, as well as a reduction or exemption from the unified agricultural tax. Using the example of the Nurinsky district, the authors analyze the implementation of the main decisions of state authorities to eliminate the consequences of famine. The authors of the article conclude that despite the fact that the state handed over wheat, millet and other food support to the hungry, the assistance provided was not insufficient and was delayed. The authors, having studied materials of the archival fund of the Nurinsky district, identified a list of collective farms that received food aid in the form of grain, wheat and other crops, and came to the following conclusion. Firstly, the food aid provided by the state turned out to be late, since at the time of its arrival, famine reached its peak, farms fell into decline, the population died out, and the survivors were forced to migrate; secondly, the amount of aid provided by the state was insufficient to solve the food problem; thirdly, food aid was distributed not only without taking into account the size of farms, but also not for their intended purpose; fourthly, the state authorities failed to correct the current situation in the Kazakh villages.

ACCESS TO PUBLIC SOFT LOANS AND JOB CREATION AMONG MARGINALISED GROUPS IN TANZANIA

Access to soft loans is an important tool in the promotion of self-economic sustenance and job creation. Moreover, globally the rate of unemployment is on the rise and particularly so for the youth and women. Therefore, the study aimed at assessing how access to soft loans issued by local government authority (LGA) contribute to job creation among the marginalised groups in the city of Dodoma, Tanzania. A cross sectional research design was used whereby using a questionnaire, data was collected from 336 randomly selected respondents. The collected data was analyzed using SPSS and STATA whereby both descriptive and inferential statistics were determined. In addition, binomial regression analysis was used to determine factors associated with the marginalised groups’ job creation following their access to LGA soft loans. Generally, findings from the study show that on average two jobs were created by the soft loan beneficiaries. In addition, findings show that the soft loan beneficiaries’ education, soft loan duration and type of income generating activity on which the loans were used were significantly (p ≤ 0.001) associated with job creation (p<0.01). In addition amount of loan received was negatively and significantly (p ≤ 0.05) associated with the marginalised groups’ job creation. Thus, it can be concluded that access to soft loan enables marginalised groups to create jobs. Therefore, it is recommended that Dodoma City Council should expand its provision of soft loans to marginalised groups so as to promote more job creation hence, reduce the rate of unemployment among the marginalised groups.

Opportunities and Barriers to Biogas Adoption in Malawi

Malawi has the potential to explore the utilization of biogas technology. The technology has existed in the country for decades. However, the uptake has been lower than expected. Further, there has been a high rate of dis-adoption of the installed systems. To deal with the problem, this study explored the opportunities and barriers to biogas technology to enhance biogas adoption and utilization in Malawi. Qualitative research methods using key informant interviews were employed to collect the data from biogas adopters, dis-adopters, potential adopters, and experts. A total of 22 households and 6 experts were interviewed. The findings of the study show that the country has opportunities for biogas adoption and utilization. The most mentioned opportunities were livestock farming practices, constraints to access to reliable energy sources, associated benefits of biogas technology, and land holding. However, the adoption of the technology has faced several challenges. Commonly cited barriers were the high installation and maintenance costs, inadequate feedstock, inappropriate dissemination approaches, lack of training after installation services and expertise, lack of reliable water sources, absence of ownership, lack of cooperation amongst institutions involved in biogas promotion, lack of a coordinating body for institutions involved in biogas dissemination, lack of standards, and socio-cultural factors. To overcome the challenges, strategies were identified, and these include the provision of incentives, loans and subsidies, provision of technical support services, having demonstration sites, employing suitable dissemination approaches, co-digestion or diversification of raw materials, awareness campaigns, and collaboration amongst sectors involved in biogas dissemination.

Bank Market Value and Loan Supply

Bank Market Value and Loan Supply

Manfaat Kredit Usaha Rakyat Bagi Pelaku Usaha Kecil Dan Menengah Di Kecamatan Langke Rembong Kabupaten Manggarai

This research aims to explain the benefits of providing BRI Bank People's Business Credit loans for Small and Medium Enterprises. This research was conducted at Bank Rakyat Indonesia because it is one of the banks that distributes the KUR assistance program. This research uses primary data and secondary data. The research results show the benefits of providing BRI bank KUR assistance to SMEs, namely that small and medium business actors are helped by getting capital to open a business, develop businesses that are already running and can provide employment assistance for other people. Obstacles that small and medium business actors often face when applying for small and medium business credit assistance include incomplete requirements, bad personalities and inappropriate credit guarantees. It is hoped that the provision of people's business credit loans will be able to provide benefits to small and medium business owners, both for the businesses they run and to fulfill other economic needs.

Unravelling the credit market shocks and investment dynamics: A theoretical and empirical perspective

This paper investigates the underlying credit market shocks that historically affected business investment in the Slovenian economy. In contrast to the existing literature, we explore more profound structural shocks beneath the credit demand and supply shocks. For the purpose of structural identification, we propose a theoretical model of the credit market that reveals the credit market imperfections on the side of credit supply as well as liquidity demand. The theoretical structure justifies our set of identifying restrictions, further evaluated with the structural Bayesian VAR model. Our results confirm the relevance of loan supply shocks for the business investment activity, suggesting the existence of credit market imperfections. Furthermore, business investment is strongly conditioned by liquidity demand shocks, which explain a significant part of the variation in investment activity. Even though loan supply shocks constrained the investment activity in Slovenia during the financial crisis, the results of our analysis suggest that banks predominantly reacted to the increasing financial risk as opposed to the changes in their profit functions. Based on the results, we may conclude that in the common monetary area, fiscal policy should implement country-specific measures to effectively address the business sector's expectations regarding the economy's medium- and long-term development.

Strategic enhancement of Zakat collection and distribution in philanthropic institutions: integration of SERVQUAL, Kano, and QFD

Zakat philanthropic institutions have a pivotal role in fund collection and distribution, yet they haven't realized their full potential primarily due to diminished public trust. Addressing this challenge requires strategies to elevate service quality. This study introduces an integrated method combining SERVQUAL, Kano, and Quality Function Deployment (QFD) to optimize Zakat service quality. Out of twenty-one service attributes evaluated, fourteen were identified as pivotal for strategic enhancement, spanning areas like information management, human resources, and product diversification. Utilizing the QFD framework, these attributes were transformed into actionable quality improvement measures. The suggestions for quality improvement measures include refining website functionalities, ensuring consistent and engaging information dissemination, comprehensive employee training, introducing e-wallet options, and expanding student loan provisions. By integrating SERVQUAL, Kano, and QFD, this research offers a holistic assessment approach, emphasizing only those service aspects that truly resonate with donor satisfaction. The findings and recommendations present immediate actionable insights for institutions aiming to augment zakat collection and distribution efficacy.

Digital loans and buy now pay later from LendTech versus bank loans in the era of ‘black swans’: Complementarity in the area of consumer financing

Research background: People who take non-banking loans are primarily perceived as excluded from accessing bank services. The growth of e-commerce and the increasing digitalisation of customer interactions with banks was particularly accelerated by the COVID-19 pandemic (the first ‘black swan’). These processes have also influenced the rapid growth of the LendTech (LT) sector within FinTech with its digital loans and buy-now-pay-later (BNPL) services. The war in Ukraine (the second ‘black swan’) has led to an energy crisis, increased inflation, interest rates and credit costs, and reduced credit accessibility. In this context, the following research questions are addressed: Are the LT and banking sectors complementary or substitutive in the area of consumer financing? Does complementarity apply to all customer segments and loan amounts? How does the extent of complementarity or substitutability of the LT sector depend on, and to what extent do changes in the regulatory and macroeconomic environment affect, the interaction between the banking and LT sectors? Purpose of the article: The aim of the article is to identify trends in the LT sector within FinTech in the context of assessing the scale and determinants of current and future complementarity of the non-bank sector and the banking sector in the area of consumer credit in time of black swans. An additional purpose of the article is to estimate revenues from the basic operating activities of companies from the on-line channel. Methods: The research process was multi-stage and the research procedure was structured. Due to the lack of a uniform source of data on LT products and services, the study used many data sources — data from the Credit Information Bureau, a primary nationwide survey on LT users a primary survey of people representing LT's managerial staff. The selection of LTs was carried out according to the concept of the monetary sampling unit. The Horvitz-Thompson estimator with Sen‐Yates‐Grundy variance form was used to estimate net operating income for LT from the online channel in 2021. Findings & value added: The LT companies surveyed state that black swans (the COVID-19 pandemic and the war in Ukraine) and the current macroeconomic situation have not significantly affected demand for non-banking loans. The reduction in the opportunities for the LT sector as a result of anti-usury regulations will only lead to a shift in consumer demand to the pawnshop sector and the shadow economy, which will be detrimental to consumers. Complementarity between LT and the banking sector is revealed especially in crisis situations, thus limiting the effects of market shock (limited supply of loans offered by banks). In periods of stabilisation, a rather clear division of preferences is noticeable – in the case of seniors and loans for higher amounts, banks dominate, while in the case of lower amounts and in younger age groups, non-bank institutions are more popular. The mechanism by which shrinking banking services are replaced by LT in short-term crises confirms the importance of LT in balancing the Consumer Finance market in the face of unstable periods. From a medium- and long-term perspective, it should be noted that inflation and rising interest rates will increase the scale of credit exclusion in commercial banks, shifting part of the demand to the non-bank sector. These phenomena have an international dimension. Similar observations were made already in 2012 by the CFPB in the USA and the British FTA, when analysing the consumer finance market immediately after the subprime crisis, emphasising the effects of limiting access to bank consumer loans and the resulting growth of the LT market (Gębski, 2013).

PERAN LEMBAGA KEUANGAN SYARIAH DAN DAYA TARIK MASYARAKAT TERKHUSUS PADA SEKTOR UMKM

The Islamic Financial Sector (IFS) is a rapidly growing sector in the Islamic economy. IFS operates on Islamic law, so it must always adhere to Islam. IFS plays a crucial role in implementing Islamic principles aimed at helping society achieve prosperity, honesty, and fairness through a profit-sharing system. One of the key players in the Islamic financial sector is Islamic banking, which has a low credit risk, resulting in a sufficient margin for MSMEs. MSMEs, also known as Usaha Mikro Kecil dan Menengah (UMKM), are a type of productive business owned by individuals or corporations and regulated by Law No. 28 of 2008. UMKM has a significant role in Indonesia's economy. This potential is what motivates Islamic banks to facilitate the provision of loans to MSMEs. As time passes, Islamic banks have become capable of supporting MSMEs, which in turn attract MSMEs to conduct transactions at Islamic banks.

U.S. monetary policy shocks and bank lending in Latin America: evidence of an international bank lending channel

ABSTRACT We examine the impact of U.S. monetary policy shocks on bank lending in five major Latin American countries where large U.S. banks have limited presence. Our analysis covers annual balance sheet data from 2000 to 2021 for all banks in these nations, utilizing a recently developed measure of U.S. monetary policy shocks by Bu et al. Our findings reveal the existence of an international bank lending channel, with a one-percentage-point increase in the Fed funds rate resulting in an average 80.6 basis-point reduction in domestic bank loan growth in these countries. Liquidity and solvency emerge as crucial factors driving variations in lending behaviour among Latin American banks, with banks exhibiting stronger liquidity and solvency profiles experiencing higher loan supply growth rates.