Loan Recipients Research Articles

Role of Micro Credit in Fuel Wood Conservation and Living Standard

This study analyzed the role of micro credit on fuel wood conservation and improving household living standard in the surrounding communities of Chitral Gol National Park in Pakistan. For this purpose a sampled survey was conducted in 13 villages in which 286 respondents were interviewed, among them 143 were taken from recipients of micro credit house-holds and 143 from non-recipient households through random sampling. For analyzing the data various statistical tools were used including independent sample test, least square and multi nominal logistic model were used for analysis. The empirical analysis of the study indicates that micro credit has a positive impact on fuel wood conservation and living standard. And those who are Loan recipient house-holds were comparatively better standard of education, housing type and health. The consumption pattern of loan recipient households is also better than the non-recipient households.

The problem of infra-marginality in outcome tests for discrimination

Outcome tests are a popular method for detecting bias in lending, hiring, and policing decisions. These tests operate by comparing the success rate of decisions across groups. For example, if loans made to minority applicants are observed to be repaid more often than loans made to whites, it suggests that only exceptionally qualified minorities are granted loans, indicating discrimination. Outcome tests, however, are known to suffer from the problem of infra-marginality: even absent discrimination, the repayment rates for minority and white loan recipients might differ if the two groups have different risk distributions. Thus, at least in theory, outcome tests can fail to accurately detect discrimination. We develop a new statistical test of discrimination—the threshold test—that mitigates the problem of infra-marginality by jointly estimating decision thresholds and risk distributions. Applying our test to a dataset of 4.5 million police stops in North Carolina, we find that the problem of infra-marginality is more than a theoretical possibility, and can cause the outcome test to yield misleading results in practice.

International Institutions and Political Liberalization: Evidence from the World Bank Loans Program

How do international institutions affect political liberalization in member states? Motivated by an examination of the World Bank loans program, this article shows that institutions can incentivize liberalization by offering opportunities for countries to become associated with advanced, wealthy members. In the World Bank, when a loan recipient reaches a specified level of economic development, it becomes eligible to graduate from borrower status to lender status. Using a regression discontinuity design, the study demonstrates that this incentive motivates states to improve their domestic behavior with respect to human rights and democracy. Combining qualitative and quantitative evidence, the results suggest that the desire to become a member of this elite group is responsible for motivating member states to reform due to the belief that such membership brings diffuse international and domestic benefits.

Financial Inclusion in Capital Markets: Challenges and Opportunities for Producer Companies

In recent times, there has been a major thrust on financial inclusion. Starting with Self Help Groups (SHGs) and the SHG-Bank linkage model, it has moved to Micro Finance Institutions (MFIs), NBFCs, and now small finance banks. The poor have been recipients of loans. But is there an opportunity today to include them not merely as customers for loans, but also as owners or shareholders and participants in the capital markets? Beyond that, can the marginalized become significant players in this market – not merely as investors in the stock market, but as promoters and owners of business? What does International experience tell us about this type of initiative? We highlight one recent initiative. The Producer Company section was first introduced in the Companies Act in 2002 and retained in the 2013 Act as well. It is an enabling and bold legislation for small producers, but lack of access to capital has held back the growth of these companies. It is important to find ways to integrate them with the capital and debt markets like other countries have done. We suggest some ways forward based on our need and the experience of other countries. All these methods would allow outside investors who are not primary producers to contribute share capital in different forms. This would require some amendments to existing laws and regulations. Producer Companies can enable primary producers to significantly increase their incomes and help about 10 crore families who are in farming.

Conceptual and Empirical Issues for Alternative Student Loan Designs: The Significance of Loan Repayment Burdens for the United States

In this article, we compare the two main types of student loans used to finance postsecondary education: mortgage-type loans, which are repaid over a set period of time and mainly used in the United States; and income-contingent loans, which are repaid depending on students’ future income and used in Australia and England. We argue that the major concern with mortgage-type loans is the repayment burden that falls on students. Repayment burden—the proportion of a debtor’s income required to repay loans—is fundamental to the assessment of student loan systems because it affects the probability of students defaulting on loan repayment, and because it bears on debtors’ consumption and standard of living. We show that Stafford loans imply extremely difficult financial circumstances for a minority of U.S. loan recipients, and that income-contingent loans can solve those problems. The financial benefits of income-contingent loans are illustrated through a hypothetical student loan experience.

Does Stock Market Illiquidity Influence the Cost of Borrowing? Evidence from Syndicated Loans

We show that firms with illiquid stock pay higher syndicated loan spreads. This result is invariant to multiple measurements of stock illiquidity, and is robust to a wide set of cross-sectional loan and firm features, firm and year fixed effects. This result also holds using matched difference-in-differences at an exogenous reduction in the minimum tick size of major United States exchanges and using a two-stage least squares estimator. Stock illiquidity is, moreover, shown to diminish the benefit to the loan recipient of a lending relationship. A rationale for these findings is that stock market illiquidity impairs the bargaining power of corporate borrowers, in the loan spread negotiating procedure, as it raises the cost of alternatively issuing equity. Our findings, thus, indicate that relative bargaining power plays a systematic role in determining syndicated loan spreads.

Divided by Loyalty: The Debate Regarding Loyalty Provisions in the National Defense Education Act of 1958

The National Defense Education Act (NDEA) of 1958 was the first federal investment in low-interest student loans and became a precedent for expansion of student loans in the Higher Education Act of 1965. In its controversial loyalty provisions, the NDEA required loan recipients to affirm loyalty to the U.S. government. Between 1958 and 1962, thirty-two colleges and universities refused to participate or withdrew from the NDEA loan program, arguing that the loyalty provisions unfairly targeted students and violated principles of free inquiry. This essay argues that debate over the loyalty provisions fractured a partnership between progressives who favored general aid to education and conservatives who supported short-term investment for defense purposes. Although debates over the NDEA loyalty requirements seem specific to the Cold War, a close examination of the arguments illuminates their alignment with long-standing ideological conflicts over legitimacy of federal aid to higher education.

Documenting a long-term development model in the slums of Delhi.

BackgroundAchieving development outcomes requires the inclusion of marginalised populations that have the least opportunity to participate in and benefit from development. Slum dwellers often see little of the ‘urban advantage’, suffering more from infectious diseases, increasing food costs, poor access to education and health care, inadequate water and sanitation, and informal employment. A recent Cochrane Review of the impact of slum upgrading strategies found a dearth of unbiased studies, making it difficult to draw firm conclusions. The Review calls for greater use of process data, and qualitative alongside quantitative methods of evaluation. India is a lower middle income nation with large gender disparities and around 65 million slum inhabitants. The Asha Community Health and Development Society, a non-governmental organisation based in Delhi, has delivered a multi-sectoral program across 71 slums since 1988. This article reports on a mixed-method study to document measureable health and social impacts, along with Asha’s ethos and processes.MethodsSeveral observational visits were made to 12 Asha slums where informal discussions were had with staff and residents (n = 50). Asha data records were analysed for change over time (and differences with greater Delhi) in selected indicators (maternal-child health, education, child sex ratio) using descriptive statistics. 34 semi-structured individual/small group interviews and 14 focus group discussions were held with staff, residents, volunteers, elected officials, civil servants, bankers, diplomats, school principals, slumlords and loan recipients (n = 147).ResultsKey indicators of health and social equity improved over time and compared favourably with those for greater Delhi. The Asha model emphasises rights, responsibilities, equity and non-violence. It employs strategies characterised by long-term involvement, systematic protocols and monitoring, development of civil society (especially women’s and children’s groups) to advocate for rights under the law, and links with foreign volunteers and fund-raisers. Stakeholders agreed that changes in community norms and living conditions were at least partly attributable to the Asha model.ConclusionsWhile lacking a control group or complete baseline data, evidence suggested substantial improvements in slum conditions and social equity. The Asha model offers some lessons for slum (and broader) development.

Delay and probability discounting among payday and title loan recipients

Payday and title loans are short-term loans associated with significant economic impact. Behavioral theories of impulsive choice may provide insight into behavioral processes that underlie the propensity to take out payday and title loans. Adults between the ages of 18 and 30 recruited from the community completed delay and probability discounting tasks for hypothetical money as well as measures of substance use. Patterns of discounting were characterized using a hyperbolic decay model and area under the curve. Participants who took out a payday and/or title loan in the past (n=41) exhibited more impulsive choice patterns on the delay discounting task than did those who did not (n=255). Substance use mediated this relationship between payday and title loan retention and delay discounting. These findings suggest potentially important relationships between payday/title loan borrowing, substance use, and delay discounting.

The Missing Link in Donor Prescribed Educational Reforms: Lack of Ownership (The Case of the World Bank in Ethiopian Higher Education)

The World Bank (WB) as an international policy transfer and diffusion agent has been actively involved in orchestrating and driving Higher Education (HE) reforms globally. Such impact of the Bank has arguably, been more evident in the context of loan recipient countries. By using a hard mode of influence (financial), and more subtle or soft modes of influence (knowledge based and symbolic), the Bank has been steering the HE system of loan recipient countries, to which Ethiopia is not an exception. The Bank justifies its involvement by illuminating on the capacity deficit that is widely prevalent in borrowing countries. Notwithstanding, the solid expert base the Bank has, this paper contends that, the Bank is not creating sufficient spaces for local actors to collaborate in. Even when the Bank creates avenues to stimulate discussion on proposed reform ideas, such platforms merely serve the purpose of legitimizing the predetermined reforms ideas of the Bank rather than giving national actors a genuine opportunity to critically challenge, the purported reform ideas of the Bank. This has resulted in, among other things; failure to capitalize on the HE expertise of loan recipient countries, the crafting of reforms that do not resonate with borrowing countries context and most importantly, lack of ownership of the proposed reforms and their sustainability. In line with that, this paper argues for a shift in approach from the current strong top-down approach to a balanced approach that gives sufficient spaces and most importantly recognition for bottom up actors, ideas and initiatives .

Leveraging strong social ties among young men in Dar es Salaam: A pilot intervention of microfinance and peer leadership for HIV and gender-based violence prevention

ABSTRACTGender inequality is at the core of the HIV patterns that are evident in sub-Saharan Africa. Gender-based violence (GBV) and lack of economic opportunity are important structural determinants of HIV risk. We piloted a microfinance and health promotion intervention among social networks of primarily young men in Dar es Salaam. Twenty-two individuals participated in the microfinance component and 30 peer leaders were recruited and trained in the peer health leadership component. We collected and analysed observational data from trainings, monitoring data on loan repayment, and reports of peer conversations to assess the feasibility and acceptability of the intervention. Eighteen of the loan recipients (82%) paid back their loans, and of these 15 (83%) received a second, larger loan. Among the loan defaulters, one died, one had chronic health problems, and two disappeared, one of whom was imprisoned for theft. The majority of conversations reported by peer health leaders focused on condoms, sexual partner selection, and HIV testing. Few peer leaders reported conversations about GBV. We demonstrated the feasibility and acceptability of this innovative HIV and GBV prevention intervention. The lessons learned from this pilot have informed the implementation of a cluster-randomised trial of the microfinance and peer health leadership intervention.

Wybrane elementy polityki kredytu handlowego a wielkość spółdzielni mleczarskich

W opracowaniu przedstawiono wyniki badań dotyczących zależności między wielkością spółdzielni mleczarskich a wybranymi elementami polityki kredytu handlowego. Badaniami objęto 60 spółdzielni mleczarskich, które w 2010 roku sporządziły oraz ogłosiły sprawozdanie finansowe w Monitorze Spółdzielczym B. Próba badawcza została podzielona na kwartyle według kryterium rosnącej wartości aktywów ogółem. Wartość aktywów ogółem spółdzielni mleczarskich istotnie wpływała na wybrane elementy polityki kredytu handlowego. Zarządzający małymi spółdzielniami mleczarskimi przyjmowali pozycję biorcy kredytu handlowego w celu pozyskania dodatkowych źródeł finansowania bieżącej działalności. Natomiast w spółdzielniach dużych i bardzo dużych zarządzający częściej przyjmowali pozycję dawcy kredytu, przy jednoczesnym wydłużaniu terminu inkasa należności. Zarządzający największymi spółdzielniami mleczarskimi stosują bardziej liberalną politykę kredytu handlowego w stosunku do spółdzielni małych.

INTERNATIONAL LENDING AND THE SAMARITAN'S DILEMMA

We analyze how the altruism of an International Financial Institution (IFI) towards its Low-Income member Countries (LICs) alters the effectiveness of its loans. We study IFI loans to a credit-constrained LIC. The IFI's repayment policy is determined by the interplay of its concerns for the welfare of the loan recipient and its fiduciary responsibilities to creditor countries. If the IFI is unable to commit to either the size of future loans or the repayment terms on past loans, conditional loans are superior to unconditional loans. Thus, IFI altruism and the inability to commit are sufficient reasons to equip loans with conditions. Conditional loans produce an efficient allocation of resources, so altruism is not a fundamental reason that loans fail to increase welfare.

Labor Reforms in SEE Countries and Recovering from the Crisis

Abstract Since 2009, South Eastern European states are confronted with the most dramatic recession throughout Europe. As the 2008 global financial crisis turned to sovereign debt crisis in the EU, the vulnerable economies of the SEE periphery became recipients of IMF loans (granted to a total of sixteen European countries) to tackle the impact of the downturn. In the Balkan region, Greece – a member of the Eurozone - has been receiving financial support from the IMF/EC/ECB troika since May 2010; Serbia and Romania have also borrowed from the IMF; while Bulgaria, also as vulnerable but poorer than Romania, postponed such a deal due to its smaller budget deficit. The loans - either by the IMF or in collaboration with European institutions - were granted under conditional terms of austerity and structural adjustment policies, which imposed public expenditures cuts, anti-protectionism reforms, more labor market flexibilization and national assets’ privatization. Those conditional policies of restructuring towards liberalization ‘promised’ more FDI-favorable conditions, higher employability and thus, growth. However, the suppression of welfare and social security expenditures, the reduction of public and private sector wages, and the promoted labor market reforms have so far deepened recession, accentuated unemployment and decreased social and living standards in all loan-recipient countries. The anticipated recovery from the crisis appears to be uneven and underlines the fragility of the EU. In this context, there is growing concern for the effectiveness of the implemented structural reforms, especially in the vulnerable SEE periphery of Europe. We focus on the Balkan EU-member states of Greece, Romania and Bulgaria, to explore the effect of the memoranda-imposed labor market re/deregulation on their economies. We find that despite the different characteristics of the crisis in these countries, high unemployment is persisting, employment precariousness and risk of in-work poverty is increasing, and their capacity for economic recovery is deteriorating.

A Decision Support Approach for Accounts Receivable Risk Management

Financial disasters in private firms led to increased emphasis on various forms of risk management, to include market risk management, operational risk management, and credit risk management. Financial institutions are motivated by the need to meet increased regulatory requirements for risk measurement and capital reserves. This paper describes and demonstrates a model to support risk management of accounts receivable. We present a decision support model for a large bank enabling assessment of risk of default on the part of loan recipients. A credit scoring model is presented to assess account creditworthiness. Alternative methods of risk measurement for fault detection are compared, and a logistic regression model selected to analyze accounts receivable risk. Accuracy results of this model are presented, enabling accounts receivable managers to confidently apply statistical analysis through data mining to manage their risk.

A methodological framework and tool for assessing the climate change related risks in the banking sector

Although climate change risks have been studied for a number of economic sectors, banking has received relatively little attention. The paper proposes a methodology and an associated decision-support tool for quantifying, in monetary terms, the risks for banks from the exposure of their loan recipients and/or applicants to climate change. The framework and tool are applied to a case study based on input from a Greek bank; results indicate that climate change risks for banks are considerable, and thus decision makers need to estimate their magnitude and possibly consider these within the credit management process, and in environmental planning.

International Institutions and Political Liberalization: Evidence from the World Bank Loans Program

How do international institutions affect political liberalization in member states? Motivated by an examination of the World Bank loans program, we argue that institutions can confer prestige in exchange for political reforms. When offered an opportunity to improve their institutionally-conferred status, thereby boosting their international and domestic reputations, states are willing to make policy concessions in exchange. To test our theory, we exploit a unique feature of the World Bank loans program: when a loan recipient reaches a specified level of economic development, it becomes eligible to graduate from borrower status. Although graduation entails losing access to loans, governments typically seek to graduate. We show that governments view graduation as an indicator of the transition from a developing state to a developed state. Using a unique regression discontinuity design, we demonstrate that when states become eligible for graduation, their governments democratize to achieve this enhanced status. Thus, a government's interest in improving its status in the international system can motivate domestic reform.

EPA-0850 – Associations of lending on family behavioral systems in terms of acceptance help

Introduction Considering the current global economic crisis, it is an urgent need to discuss the potential effects of the crisis in family environment in Greek population. Objectives This study examined the effect of borrowing on family orientation strategies. Aims This study aimed at detecting the interaction of borrowing on family acquiring social support and problem-solving behaviors. Methods 273 community individuals from different regions of Greece participated in the present study. The measure used was the Family Crisis Oriented Personal Evaluation Scales. Results Multivariate analysis was applied for the statistical analysis of data, and the results was: The loan recipients have statistically higher average than non-loans at family mobilization to accept help in the periods when the family is in crisis 11,13±4,65. Particularly interesting result of this study by using linear regression analysis was the finding that additional 1.000 euros of family income per month increase per unit the mobilizing of family to acquire and accept Help, while lending itself was associated with 1,76 per unit increase of mobilizing family to accept help (p=.016 and p=.014 respectively). Table 1 . Results of regression analysis Model 1 Unstandardized B Coefficients Std. Error Standardized Coefficients Beta t Sig. (Constant) 8,103 ,767 10,559 ,000 loans 1,763 ,714 ,183 2,471 ,014 Per month income ,001 ,000 ,181 2,443 .016 a Dependent Variable: mobilizing family to accept help (F-COPES). Conclusions The present study highlights the strong association between income and ways that Greek families externally handle their problems due to economic crisis.

Facts and Stereotypes about Cooperative Banks: To Whom Do CBs Actually Lend?

Cooperative banks’ (CBs) customers have been traditionally described as small or medium firms with poor performance working at local level. Moreover, they are usually involved in tertiary sector of industry or in agriculture and are financed by several sources (i.e., not just banks). This paper attempts to verify whether the characteristics listed above are stereotypes that no longer apply to CBs’ clients or, on the contrary, whether these are still some of the most relevant features CB loan recipients. In order to test this hypothesis, we used data collected through a survey conducted in 2011 by MET on Italian firms working in manufacturing industries.

Framing microfinance in Australia – gender neutral or gender blind?

In Australia, microfinance is gaining visibility as a distinct poverty alleviation strategy. Within the Australian microfinance policy and program discourses, the microfinance sector is framed as targeting both men and women equally. Yet at the practice level, the majority of loan recipients are women. Such a gender neutral framing is in stark contrast to microfinance policy and practices developed elsewhere. This paper explores how gender is represented in microfinance policy and practice in Australia, drawing on an analysis of the policy and practice statements of Australian microfinance programs. It is argued that the robust feminist assessments of the relationship between microfinance and gender equality that have emerged in developing countries could usefully inform Australian developments in this area of social policy, but that this shift requires acknowledging gender in the framing of the problem Australian microfinance seeks to address.