Loan Rates Research Articles

Investigation of the Critical Factors Influencing Low-Cost Green Sustainable Housing Projects in Iraq

Iraq oil rich country is in the condition of economic chaos and confronting an intense scarcity for the low-cost housing in the capital as migration from the surrounding cities flooded where country poor economic condition has pushed the housing price hiked in cities. Therefore, this study is conducted with aims to determine critical factors affecting the affordable housing in Iraq. Quantitative study consisting close ended questionnaire of four sections cover all critical factors and randomly distributed questionnaire among the construction industry players to determine the objectives of the study. The questionnaire was translated into Arabic/local language so the every responded understand the questions, total distributed questionnaire is 175 and in response 134 received and data is analysed using SPSS software. Study findings shows that sustainable land management, easy and low interest rate loan arrangement to overcome on the financial constraints are the critical problem followed by unsteady or interpreted supply of construction materials, pricing control significantly help to keep lower the cost of affordable housing. Study also concluded that smaller size houses are no longer the key barriers of acceptance to the Iraqi community. Thus, study strongly recommend government stakeholders to develop framework and properly manage the land for housing purpose. Lastly, steady supply chain management for all the essential construction materials such as steel, technology, cement, electrical and sanitary appliance also control the pricing so low-cost housing dream of the people become true.

Analisis Perbandingan Pengaruh Kualitas Audit, Likuiditas, Solvabilitas, Profitabilitas Terhadap Opini Audit Going Concern (Studi Perbankan Syariah Di Asia)

The purpose of study to test the effect of audit quality, likudity ratio, solvency, rentability and productivity This study used purposive sampling method. This sampling taken from 104 Islamic Banking in Soult Asia and Soulteast Asia from 2009-2012. Methods of data analysis descriptive analysis and analytical methods to test the research hypotheses using logistic regression analysis. The results of this study concluded that the liquidity ratio and the quick ratio is proxied by banking ratio has no effect on going concern audit opinion , while South Asia the other is a proxy for loan-to- deposit ratio (LDR) has an influence on the going concern audit opinion . The test results of the solvency ratio is proxied by using the ratio of primary , secondary risk assets ratio and risk ratio no effect on the going concern audit opinion . The test results of the profitability ratio is proxied by using the gross profit margin, net profit margin , return on equity (ROE ) , return on total assets (ROA) and return on the loan rate showed no influence on the going concern audit opinion.

An agent-based model for evaluating reforms of the National Flood Insurance Program: A benchmarked model applied to Jamaica Bay, NYC.

Coastal flood risk is expected to increase as a result of climate change effects, such as sea level rise, and socioeconomic growth. To support policymakers in making adaptation decisions, accurate flood risk assessments that account for the influence of complex adaptation processes on the developments of risks are essential. In this study, we integrate the dynamic adaptive behavior of homeowners within a flood risk modeling framework. Focusing on building-level adaptation and flood insurance, the agent-based model (DYNAMO) is benchmarked with empirical data for New York City, USA. The model simulates the National Flood Insurance Program (NFIP) and frequently proposed reforms to evaluate their effectiveness. The model is applied to a case study of Jamaica Bay, NY. Our results indicate that risk-based premiums can improve insurance penetration rates and the affordability of insurance compared to the baseline NFIP market structure. While a premium discount for disaster risk reduction incentivizes more homeowners to invest in dry-floodproofing measures, it does not significantly improve affordability. A low interest rate loan for financing risk-mitigation investments improves the uptake and affordability of dry-floodproofing measures. The benchmark and sensitivity analyses demonstrate how the behavioral component of our model matches empirical data and provides insights into the underlying theories and choices that autonomous agents make.

PENGARUH JUMLAH SIMPANAN TERHADAP PEROLEHAN SISA HASIL USAHA PADA KOPERASI DHARMAGHATI KSATRIA JAYA CIMAHI PERIODE 2011 – 2015

The purpose of this study was to determine the influence of the total deposits to the acquisition of net income at Cimahi Dharmaghati Ksatria Jaya Coorperative, periods of 2011-2015. The method used quantitative and descriptive methods. Analysis of the data used Kolmogorov-Smirnov normality data test, Pearson Product Moment Correlation Analysis, Linear Regression Analysis, determination coefficient and hypothesis test (t test). The results of the data normality test was 0.853 above 0.05, which that both variables were normally distributed. Then the results of the Pearson product moment correlation analysis was 0.830, which meant the amount of deposits with the acquisition of net income had a very strong correlation. Moreover, the results of the coefficient of determination was 68.9%. It showed that net income was influenced by the amount of deposits amounted to 68.9%. Yield data from linear regression analysis was Y = 197.125 + 0.14 X. Moreover, the results of the hypothesis test (t test) was t-count < t-table (2.574 <3.182), the amount of deposits did not significantly influence net income. The problems that occurred at Cimahi Dharmaghati Ksatria Jaya Coorperative the number of deposits and the acquisition of net income from the coorperative members who took his mistress but still had the right to apply for loans. Furthermore, the decrease in loan interest rates occured. The writer suggest based on the above problems where members who already do not have the savings are not entitled to make loans and coorperative provides loan rates based on the term of loan

CEO Duality and Bank Loan Contracting: Evidence from China

ABSTRACT This paper investigates the impact of CEO duality on bank loan contracting costs. Using hand-collected data of China’s loan contracting terms throughout 2004–2020, we find that CEO duality leads to stricter loan contracting terms, shown as higher adjusted loan rates and shorter loan maturity. The results hold after we perform robustness tests including change analyses, propensity score matching analyses, as well as tests based on exogenous CEO turnovers. The positive relationship between duality and loan costs is more pronounced among firms with higher internal and external uncertainties. We further find that information asymmetry and CEO entrenchment are possible channels through which CEO duality increases bank loan contracting costs. Overall, the evidence supports the agency theory view that CEO duality increases firm’s credit risk, thus leading to stricter bank loan contracting terms.

Dynamic Trade Finance in the Presence of Information Frictions and FinTech

Problem definition: The paper focuses on an innovative bank-intermediated trade finance contract, which we call dynamic trade finance (DTF, under which banks dynamically adjust loan interest rates as an order passes through different steps in the trade process). We examine the value of DTF, the impact of process uncertainties, and the associated information frictions on this value and the strategic interaction between DTF and FinTech. Academic/practical relevance: As more than 30% of global trade involves bank-intermediated trade finance, examining contract innovation in trade finance (DTF) and its strategic interaction with FinTech is of practical importance. Also, analyzing trade finance in the presence of process dynamics and information frictions complements the existing academic literature. Methodology: We construct a parsimonious model of a supply chain process consisting of two steps. The duration of each step is uncertain, and the process may fail at either step. Information delay may also occur when verifying the process passing a step. The seller borrows from a bank to finance this two-step process either through uniform financing (the interest rate remains constant throughout the process) or DTF (the interest rates are adjusted according to a precommitted schedule as the process passes each step). When lending, the bank faces a regulatory capital requirement (the bank is required to hold capital reserve when issuing risky loans) or information asymmetry (the seller/borrower possesses more accurate information about the trade process than the bank). Results: The value of DTF lies in its ability to reduce transactional deadweight loss (under the regulatory capital requirement) and screening (separate high-quality borrowers from the low-quality ones under information asymmetry). This value is greater for more reliable or lengthier trade processes, yet DTF’s ability to screen is stronger when the process is less reliable. The severity of information delay hurts the value of DTF convexly. FinTech that expedites information transmission and verification and enables automatic execution complements DTF, and those that segment customers more efficiently could substitute DTF. Managerial implications: Our results shed light on how the underlying trade process dynamics and the type of information frictions involved affect the optimal deployment of contract innovations (DTF) and FinTech in trade finance.

Does capital-based regulation affect bank pricing policy?

This paper tests whether a series of changes to capital requirements transmitted to a change to banks’ pricing policy. We compile a rich bank-level supervisory dataset covering the banking sector in the Czech Republic over the period 2004–2019. We estimate that the changes to the overall capital requirements did not force banks to alter their pricing policy. The impact on bank interest margins and loan rates is found to lie in a narrow range around zero irrespective of loan category. Our estimates allow us to rule out effects even for less-capitalised banks and small banks. The results obtained contradict estimates from other studies reporting significant transmission of capital regulation to lending rates and interest margins. We therefore engage in a deeper discussion of why this might be the case. Our estimates may be used in the ongoing discussion of the benefits and costs of capital-based regulation in banking.Supplementary InformationThe online version contains supplementary material available at 10.1007/s11149-022-09448-5.

The Influence of Efficiency on Interest Rate Loan in Indonesia Banking in regards to The Implementation of Expected Credit Losses

The Influence of Efficiency on Interest Rate Loan in Indonesia Banking in regards to The Implementation of Expected Credit Losses

Forecasting housing prices in Turkey by machine learning methods

In this study, decision tree regression, artificial neural networks (ANN) and support vector machines (SVM) methods are applied by using monthly data for the period 2013-2020 in the estimation of housing sales in Turkey. In the analysis, the volume of individual mortgage loans offered by banks, the average annual interest rate of mortgage loans from macroeconomic and market variables, the consumer price index (CPI), the BIST 100 index, the benchmark bond interest rate, gold prices and the values of the US dollar and Euro Turkish lira and the housing sales price per square meter in Turkey are used. As a result of the analysis carried out on the model created house sales prices in the Turkish housing market have been successfully estimated and in the light of these estimates, it is determined that banks can guide banks in the creation of various credit packages and appropriate loan targets to support the housing sector.

Consumption in the Philippines: In the Course of Unemployment and Loan Acquisition

Unemployment is one of the problems of Filipinos, which affects their consumption of goods and services since they have no income, worsened by the increasing prices in the market. Here, they tend to acquire consumer loans to support their means in obtaining their needs and wants, but due to the acquisition of previous loans and obligations to pay, they tend to adjust their consumption. Embedded from the Life-Cycle Hypothesis, Permanent Income Hypothesis and Keynesian Consumption Theory, the main objective of the research was to identify the relationship of unemployment, consumer loans per capita, real gross domestic product per capita, and inflation rate with the real household final consumption expenditure per capita in the Philippines using Ordinary Least Squares (OLS) in multiple regression analysis, and diagnostic tests in Eviews software using empirical time-series quarterly data from 2009 to 2019. This research found that unemployment and consumer loans per capita have an indirect relationship with the consumption of Filipinos. On the other hand, the gross domestic product per capita has a direct relationship. This claimed that all variables are significantly related to consumption except the inflation rate, although it showed an indirect trend. The findings exposed that Filipinos adjust their consumption to cope with no income due to unemployment, acquisition of consumer loans, and inflation rate to attain their needs and wants while having income increases their consumption. This research recommended that the Philippine government support the unemployed Filipinos by providing insurance or benefits, lessening the lending interest rate of loans, and overseeing the market prices to aid their consumption.

A COMPARATIVE ANALYSIS BETWEEN WESTERN BALKAN COUNTRIES AND SELECTED OECD COUNTRIES (2010 - 2019) OF THE EFFECT OF UNEMPLOYMENT ON NON-PERFORMING LOAN

The main purpose of this paper is to determine the effect of unemployment on non-performing loans through a comparative analysis between the Western Balkans countries and some selected OECD countries. The size of non-performing loans (NPLs) plays a key role in the stability of the banking sector of a country. Macroeconomic factors that explain the NPLs contain very important information for banks as well as for a country and studies in this regard, which compare developing countries and already developed ones have received little attention. To carry out this study, panel data and quantitative econometric models have been applied, specifically Linear Regression, Random Effect, Fixed Effect, Huasman - Taylor Regression and Generalized Estimating Equations (GEE Model) on secondary data from official reports of the World Bank, Organization for Economic Cooperation and Development, during the period from 2010 to 2019. Based on economic theory and our findings, we can say that the relationship between the unemployment rate and non-performing loans is directly proportional: an increase in the unemployment rate will lead to an increase in the non-performing loan rate. Moreover, Findings show that controlling the rate of unemployment helps in controlling the level of non-performing loans

In December days are shorter but loans are cheaper

AbstractThis study analyzes the month‐of‐the‐year effect on lending decisions. Using data from a large US peer‐to‐peer lender, we perform regressions of loan acceptance and loan rate on month dummy variables. We find evidence of a month‐of‐the‐year effect on loan acceptance and loan pricing. December is the best month to ask for a loan, with the highest chance of acceptance and the lowest rate. We test the potential explanations of the calendar anomalies and find some support for trade loading, such that granted loans might be inflated at the end of the quarter to hit quarterly targets.

The resilience of central and eastern european banking systems during the covid-19 crisis

The Covid-19 crisis has severely affected Central and Eastern European (CEE) states, causing major economic activities to be blocked during the pandemic, shrinking domestic demand and investment. The aim of the research is to analyse the impact of the pandemic event on CEE banking systems, in the light of the most relevant indicators of banking stability. Both qualitative and quantitative research methods were used to achieve the goal. The results of the analysis revealed that the pandemic crisis did not affect the quality of banking assets in the CEE, the rate of non-performing loans remained at a fairly low level in the most of the states. At the same time, due to major reforms that followed the international financial crisis of 2008, banks have a sufficiently high level of capitalization and a reasonable level of indebtedness, reflecting a high resilience to shock of CEE banking systems. However, extremely low level of interest rates in the pandemic have determined a deterioration in asset performance in most banking systems in the CEE. Moreover, the outlook regarding the CEE banking systems remains quite uncertain. Considering the large-scale measures to reschedule credit rates, through moratoriums on bank loans, but also the financial support schemes initiated by central banks and governments, the CEE region is facing high risk costs, which manifest mainly through the migration over time of credit risk exposure. In this context, non-performing loan ratios are expected to increase in the near future. Moreover, the widespread shift to lower interest rates will exert pressure on lending margins.

Government Intervention and Debt Financing Costs: Evidence from Government-Guided Funds

ABSTRACT Few studies examine how government intervention influences debt financing costs. We use firm ownership by government-guided funds (“GG funds” or “GGFs”) as a proxy for government intervention and explore whether and how GG funds influence debt financing costs. Using a 2009–2020 sample of A-share listed firms in China, we find that GG funds significantly increase debt financing costs, mainly because firms held by GGFs signal more information regarding their poor financial situation and performance to debt providers, which thus charge higher interest rates for loans. Moreover, this effect is stronger for firms located in the eastern region, for firms with a higher market index and for non-SOEs (vs. SOEs). Overall, we provide evidence that the government plays an important monitoring role in debt financing costs through GGF ownership.

REVISITING INFLATION-GROWTH NEXUS: AN ENDOGENOUS GROWTH MODEL WITH FINANCIAL FRICTIONS

This paper presents a new explanation of why the growth effect of inflation reported in the literature is an inverted-U relationship with considerations of lower bound on bank lending rates. We integrate a non-zero lower bound on the lending rate in the discussion and show the effect of inflation on optimal bank loan contracts. This paper believes that informational friction is a source of the negative relationship between inflation and growth when the loan rate constraint is non-binding. Besides, it finds out that once this loan rate constraint is binding, increasing inflation can reduce the real cost of financing capital investment and then contribute to growth. This paper also proves that the non-zero lower limit can only be reached at the low rate of inflation. It implies developing countries that are more likely to have low capital conversion efficiency and high transaction cost would hold a higher inflation-growth nexus than developed countries.

Implications of national tax policy on local pharmaceutical production in a southwestern state nigeria \u2013 qualitative research for the intersection of national pharmaceutical policy on health systems development

BackgroundUniversal access to quality and affordable medicines is one of the targets of the Sustainable Development Goals (SDGs). Access to essential medicines is defined as the availability of medicine at an affordable price in public and private health institutions including retail pharmacies in the proximity of less than an hour from the home of the population. The dependence on importation to meet the drug needs of an expanding population has implications on the growth of the local pharmaceutical industry, availability, and affordability of essential medicines in the country. This study aims to understand the dynamics of tariffs and tax policy on local drug production in the pharmaceutical industry in Nigeria.MethodsThis was a qualitative study involving the use of Key Informant Interviews (KIIs). A total of 15 stakeholders were interviewed. Interviews conducted were analysed thematically. The data generated were analysed using Atlas.Ti version 8.2.ResultsAssessment of the pharmaceutical industry sub-sector underscores myriads of challenges facing the industry and explains why the pharmaceutical industries in Nigeria are performing sub-optimally. Key stakeholders in the sector expressed concern about the fact that substantial percentage of drugs consumed in Nigeria are imported. Local manufacturers are underperforming due to several factors. Some highlighted factors were unfriendly tax environment, high cost of production, infrastructural deficit, low patronage from the government, and lack of access to low-interest rate loans. However, tax incentives and tax cuts are proven strategies to encourage and facilitate the growth of entrepreneurs in the pharmaceutical industry.ConclusionsStakeholders’ perspective of implications of the tax environment on the pharmaceutical sector of Nigeria revealed the unfriendliness of the government policy to local manufacturers. Although the checklist for availability and prices of essential medicines in Osun state, Nigeria revealed that the pre-selected drugs were available in the facilities, the observed prices further affirmed the relative difficulty that is experienced by local manufacturers to compete with imported brands of the same drugs.

Developing Innovative Financing Scheme for Leveraging Energy Efficiency Deployment in Indonesia

Having great potential, a mechanism that can leverage private involvement in energy efficiency deployment should be developed in emerging markets such as Indonesia. This study aimed to formulate an implementable financial innovative scheme for leveraging energy efficiency deployment in the country. Scrutinizing relevant studies and interviewing relevant stakeholders such as the Ministry of Finance, Ministry of Energy and the Financial Institution, we formulated a blended financial scheme for an energy efficiency project. Main stakeholders will include the scheme, including fund facilitator, trustee, custodian bank and energy user/energy service company. In our proposed scheme, Indonesia Environment Fund (IEF) is obtained the fund from the fund facilitator. IEF will act as a trustee that delivers funds for the Custodian Bank. The bank will disburse the fund to the feasible energy efficiency project or through an energy service company. In this scheme, since banks get lower interest rate funds from the trustee, they will disburse the fund to the customer with a lower interest rate than a commercial rate. Consumers utilize the fund for their energy efficiency projects. Utilizing a proposed scheme to an energy efficiency project case study, it is found that the proposed scheme potentially reduces the interest rate and leverages the project viability in a certain condition. Doing the sensitivity analysis by comparing interest rate and IRR (Internal Rate of Return) in several loan periods, we found that the shorter period of the loan and lower interest rate can improve projects feasibility. For instance, simulating a 5-year loan, it is found that reducing the interest rate from 12% to 7% could improve up to 2% IRR of the project case. Therefore, the scheme can catalyze private-sector investments mobilization for energy efficiency deployment in the country. Furthermore, it can support the country's energy security enhancement.

An investigation of the impacts of asset ratio policy on the banking system during the Covid-19 crisis in Turkey

PurposeThis paper provides a quantitative assessment of the “asset ratio” rule defined in Turkey as part of measures taken to stimulate the economy amid the Covid-19 pandemic. The main objective of the new rule was to boost credit growth in the economy and provide lending for credit-constrained households and firms that are in need. A secondary aim was to shift the denomination structure of the deposits toward domestic currency. Hence, the paper focus particularly on how the policy affected the growth rate of loans and the share of domestic deposits relative to foreign ones among the commercial banks. The policy was also heavily criticized due to the possibility that it will subjugate the banking system to excessive risk. The paper explore this possible impact by measuring how much the policy affected the default risk allowances in the banking system.Design/methodology/approachThe new policy required banks with deposits above a threshold level, i.e. large banks, to maintain a certain asset ratio. Banks with deposits below the threshold, i.e. small banks, were held exempt from it. The paper implement a difference-in difference methodology to assess the quantitative impacts of the asset ratio policy by taking large banks as the treatment group, and small banks as the control group.FindingsDifference-in-difference estimation results suggest that the asset ratio policy resulted in a 9.6% rise in loans and an 8.4% rise in government securities. Deposits also increased, with no significant change in their composition. The policy initially generated a 7% increase in the credit risk allowances of banks in the treatment group, which vanished in the following periods. Based on all these, the paper argue that the policy was successful in providing liquidity to the economy without jeopardizing the financial stability.Research limitations/implicationsThe findings of this study show that asset ratio policy is effective in increasing credit growth in countries with limited policy space such as Turkey. While saying this, the importance of the robust and prudent structure of the banking system in the economy should be underlined. Otherwise, the policy may have an unintended consequence of raising systemic risk. The policy suggestions also apply to advanced countries where the monetary policy has reached a natural limit due to the zero lower bound (ZLB). The ZLB problem encouraged these countries to use quantitative easing schemes in the aftermath of the Covid-19 crisis, just like the global financial crisis. However, it may take a long time to undo the effects of this policy on the balance sheets of central banks. In such cases, asset ratio policy can also be considered as an alternative tool for advanced economies notwithstanding the fact that the banking system should be prudent, well-capitalized and the country should have enough fiscal space. The main objective of the asset ratio policy was to help SMEs that were in urgent need of liquidity at the beginning of the crisis. The bank balance sheet data used in this paper does not contain information about the borrowers of the loans extended during the implementation of the policy. Analysis of this dimension using matched bank-firm level data will better demonstrate the success of the policy in achieving this goal. The paper address this as the main limitation of the paper and leave that analysis for future research.Originality/valueThis paper provides an important contribution to the literature by assessing a new unique policy whose objective is to stimulate loans and mitigate the impact of the Covid-19 crisis on the economy. The policy in question is predicted to have effects on the asset and liability structure and risk exposure of the banking system in Turkey. The quantitative analysis in this study estimates these impacts and discusses the effectiveness of the new policy in providing a relief for firms and households in need. Whether or not the policy caused a disruption in the sound structure of the banking system in Turkey is another question addressed in the paper.

Prediction of Loan Rate for Mortgage Data: Deep Learning Versus Robust Regression

Prediction of Loan Rate for Mortgage Data: Deep Learning Versus Robust Regression

Interest rate risk and monetary policy normalisation in the euro area

A low interest rate environment is susceptible to sudden increases in policy rates and heightened interest rate risk (IRR). By using a sample of 81 euro area banks during the period 2014Q4-2018Q1 and a confidential supervisory measure of IRR, this paper identifies which bank-specific characteristics can amplify or weaken the impact of a 200 basis points positive shock in interest rates. We find that banks reliant on core deposits, that hold more floating-interest rate loans and that diversify their lending, either by sector or geography, are less exposed to a positive change in interest rates. Interestingly, we discover that banks that did not exploit the exceptional financing provided by the European Central Bank (ECB) reveal greater IRR exposure. These findings advance the debate on the impact of a possible return to a normalised monetary policy on the euro area banking sector.