Bank Loans Research Articles

The determinants of excess liquidity in the Algerian banking system

ABSTRACT The paper investigates the precautionary and involuntary determinants of excess liquidity in the Algerian banking system over the period Q1 1995–Q1 2019. Through the autoregressive distributed lag bounds test approach, the results show that the excess liquidity is a consequence of lagged excess liquidity to deposit ratio, required reserves to deposit ratio and the output gap in the short run. In the long-run, Algerian Banks demand excess liquidity for precautionary and involuntary factors. The precautionary determinants include required reserves to deposits ratio, volatility of currency in circulation to deposits ratio and the discount rate. The involuntary determinants reflect four characteristics of the Algerian banking system. The first is the impact of hydrocarbon revenues in excess liquidity indirectly by financing the State’s expenditures. The second is the development of total bank deposits, which are largely determined by hydrocarbon exports. Third, public companies continue to dominate bank loans at the expense of the private sector share. Fourth, government debt markets are underdeveloped and government intervention continues to force banks to make regular purchases of government bonds. The banks can avoid the cost of excess liquidity by enhancing the credit to private sector.

Correlation of Board Compensation and Non-performing Loans of Commercial Banks in Western Uganda

Commercial banks across the globe are significantly impacted by Non-Performing Loans (NPLs) in terms of their profitability, liquidity, and potential insolvency. The presence of persistent NPLs undermines the lending capacity of financial institutions, resulting in a destabilization of finance and halting economic growth. While research has focused on the reasons behind NPLs, scant studies have revealed just how board remuneration functions, particularly in developing markets like Uganda. The issue. To address the gap, this study examines the connection between NPLs and board remuneration in commercial banks, focusing on two sub-constructs: Diversity and Expertise (BD) or Independence and Objectivity (BRb). In this study, descriptive, cross-sectional and correlational research designs were used using mixed-methods approaches. Using Slovin's formula and stratified, purposive, and random sampling methods, data was collected from 232 respondents out of a population of approximately 550. To gather the essential information, they conducted systematic questions and interviews, with a pilot study to verify its validity and reliability. Descriptive statistics, Pearson correlation, multiple regression, and Structural Equation Modelling (SEM) were employed for quantitative analysis, while qualitative data was subjected to thematic analysis using Nvivo software. Board independence and objectivity (BRb) were found to be more effective in reducing NPLs than diversity and expertise (BD) (path coefficient = 0.168). The SEM framework was deemed robust by its model fit indices, which were SRMR (0.08) and NFI (>0.90). Such findings also highlight the importance of making independent, unbiased decisions about credit risk reduction. The investigation into the relationship between board remuneration and NPLs in Uganda's banking sector is the first to provide fresh insights into governance factors in a new market. The outcomes offer practical recommendations for financial institutions and policymakers to create efficient compensation structures and governance mechanisms that can improve financial stability.

Impact of assets and liability on the efficiency of banks in Nigeria

To demonstrate the extent to which key bank performance indicators influence the bank's net interest margin, the research gauge the assets and liability of bank by use of: capital ratio (BACAR); Bank Loans (BLOAN); Asset Quality (BAQUA); Bank Deposits (BADEP); Deposit Rate (BDERA) and Bank Interest Spread (BISPE). The ex post facto research design was used. Whereas, quantitative data analysis was employed. The design involved the collection of secondary time series data from online data base. The population comprised banks while commercial banks serve as sample. The published CBN statistical Bulletin and World Bank indicators for the financial period of 1993 through 2022 were used. Results show that BACAR, BLOAN, BAQUA and BDERA has significant and beneficial values. BADEP shows negative but not significant values. BISPE confirms negative but not significant values). The regressed model clarifies 62.88% changeability in the net interest margin (R-squared = 0.6288), and the model is statistically significant. Sequel to the results, the study recommends that banks should prioritize increasing their capital base to improve risk supervision and boost profitability. Governing authorities should authorize that banks maintain adequate capital buffers. Banks should seek to increase their loan portfolios by exploring new credit markets and improving the creditworthiness of potential borrowers.

Exploring entrepreneurial skills of DR Congolese refugee women through economic growth in Durban, South Africa

Refugee women entrepreneurship has been played a crucial role in economic development and poverty alleviation in both sending and receiving countries. Although their contribution to socioeconomic development in South Africa, they face various challenges including proper identity documents from the Department of Home Affairs, financial resources, and services to enter the labor market in SA. The purpose of this study is to explore the entrepreneurial skills of DR Congolese refugee women in Durban. This study used qualitative research methodology including both explanatory and descriptive theories during data collection. The study used in-depth interviews and questionnaires where ten Congolese refugee women informal traders between the age of 24 and 41 years were selected through snowball techniques from Congolese community in Durban. The results revealed that entrepreneurial activity has been considered as an approach of empowering refugee women and poverty alleviation in their receiving countries. The findings show that refugees are the most unlikely entrepreneurs as they lacked the resources to launch a new enterprise with no history of credit and lack of assets or security to bank loan. The study revealed the needs of UNHCR, NGOs and government’s support in terms of sponsoring refugees’ projects, especially business training and appropriate identity documents from the department of Home Affairs. The economic contributions of female refugee entrepreneurs from the Congo in South Africa could be substantial if supported by gender-responsive policies and the provision of formal identification documents, along with access to business training opportunities. This would enhance their well-being and contribute to the economic growth of Durban.

PERAN PINJAMAN PERBANKAN TERHADAP PERTUMBUHAN EKONOMI DI PROVINSI BALI

Sustainable economic growth reflects increased economic activity, which ultimately contributes to improving people's welfare. Economic growth in Bali Province has experienced fluctuations over the past five years, one of the causes is the covid-19 pandemic which has shaken the regional economy. One of the instruments needed to support post-pandemic economic recovery is the use of financial instruments, namely bank lending. This research is focused on discussing the description of bank loans associated with economic growth in Bali Province. The purpose of this study is to determine the effect of working capital loans, investment loans, and consumption loans partially and simultaneously on economic growth in Bali Province. The approach used in this research is a quantitative approach. This study uses secondary data obtained from BPS Bali Province. The data used in this study are time series data for each regency / city in Bali Province in 2019-2023. This research uses data processing tools, namely Microsoft Excel and SPSS. The results showed that: (1) working capital loans and consumption loans have a partially positive effect on economic growth, while investment loans have a partially negative effect on economic growth in Bali Province; and (2) capital loans, investment loans, and consumption loans simultaneously affect economic growth in Bali Province.

Correction to “The Impact of Credit Reforms on Bank Loans and Firm Leverage Around the World”

Correction to “The Impact of Credit Reforms on Bank Loans and Firm Leverage Around the World”

ANALISIS PENGARUH PEMBIAYAAN KREDIT PERBANKAN, LAMA USAHA, DAN MEDIA PEMASARAN DIGITAL TERHADAP KEBERLANGSUNGAN USAHA MIKRO (STUDI KASUS USAHA MAKANAN DAN MINUMAN DI KOTA MALANG)

This research aims to analyze the influence of banking loan financing , business age, and digital marketing media on micro-sized enterprises income in Malang City. This research uses quantitative research methods with linear regression analysis. The data used in this research uses primary data in the form of a questionnaire distributed to 99 respondents who are micro-sized enterprises in Malang City. This research found that the results of banking loan financing had a significant positive effect on the income of Food and Beverage enterprises in Malang City, Business age had no significant effect on the income of food and Beverage enterprises in Malang City, and Digital marketing had a significant positive effect on the income of Food and Beverage enterprises in Malang City.

Impact of social drinking culture on the cost of bank loans: Rent-seeking or loan-contracting efficiency

This study investigates whether social drinking culture (SDC), as an informal institution, impacts the cost of bank loans to a firm. Studies suggest that SDC influences individual behavior by fostering interpersonal relationships. Few studies have explored the impact of SDC on corporate borrowing. We argue that executives use SDC to obtain bank loans at lower interest rates. However, the mechanism remains unclear. Firms can leverage SDC to engage in rent-seeking from or improve communication with lenders. We tested the hypothesis and the underlying mechanism on a sample of Chinese firms from 2011 to 2020. Results suggest that the SDC lowers bank loan rates for firms and supports the rent-seeking mechanism. Furthermore, firms in strong SDC regions have larger sizes, longer maturities, and more non-collateralized loans but perform poorly in corporate and bank loans. Therefore, strong SDC is used by firms to engage in rent-seeking borrowing, resulting in credit resource misallocation.

Doing good in times of need: Green finance policy and strategic corporate social responsibility

This study investigates the effect of a green finance policy on the corporate social responsibility (CSR) activities of firms in heavily polluting industries. Based on the 2017 policy of the People's Bank of China (PBC), which incorporates green finance into its macroprudential assessment system, we employ the difference-in-differences method to show that firms in heavily polluting industries have significantly improved their CSR performance after the implementation of the PBC's green finance policy. In response to the negative effect of the PBC's policy on their financial position, affected firms strategically engage in CSR activities in the hope that appearing socially responsible will help them recover from their adverse position. Furthermore, firms in heavily polluting industries that enhance their CSR performance after the PBC's policy have benefited from reduced bank credit transaction costs and have obtained more bank loans. The improvement in CSR performance is mainly concentrated in firms that are non-state-owned, small in size, highly dependent on external financing, and receiving more media attention. Overall, this study reveals a social consequence of the PBC's green finance policy on the CSR performance.

Debtholder Responses to Controlling Shareholders’ Share Pledging

This study investigates debtholders’ responses to controlling shareholders’ share pledging. We found that share pledging by controlling shareholders is crucial for reducing agency costs. This lessens the information asymmetry of outsiders by strengthening pledgee supervision, and decreases companies’ risk-taking by adopting a relatively conservative investment strategy that hedges excessive risks. This also reduces the impact of insider control, decreases the interest spread, and increases the length of loan maturity. Further analyses show that the favorable effect of share pledging on bank loan covenants weakens for companies with a higher degree of financing deficit. Additionally, the role of share pledging varies with the agency costs of companies’ insider controls. The effects of share pledging on bank loan terms are more profound for companies with a higher degree of corporate governance performance. Robustness analyses addressing potential endogeneity further confirm our primary conclusions.

Does data asset disclosure affect bank lending acquisition?

The Provisional Regulations stipulates that data resources are recognized as assets, thus deemed integral to financial statements in China. This mandates a readiness for data disclosure within the enterprise domain. This study examined a sample of Chinese A-share listed companies from 2012 to 2022 to investigate the repercussions of data asset information disclosure on bank lending acquisition. The findings underscore that enterprise data asset information disclosure level positively affects strengthening bank lending. This effect can be primarily attributed to heightened information transparency and long-term investors' attention. Heterogeneity analysis indicates that enterprise data asset disclosure significantly augmented the prospects of securing bank loans in non-state-owned enterprises, non-Internet communication enterprises, and enterprises involved in economic policy. The finding illustrates the pivotal role of strengthening enterprise data asset disclosure. These can serve to refine credit service precision, steering the bidirectional integration of financial technology and informatization.

Bank-firm common ownership, green credit and enterprise green technology innovation: Evidence from Chinese credit markets

Bank-firm common ownership can tackle the innovation dilemma of bank loans on firms' green development. This paper constructs indicators of common ownership and green technological innovation and then investigates the impact of bank-firm common ownership on corporates' green technological innovation using Chinese A-share listed enterprises samples from 2004 to 2021. Our conducted experiments reveal that bank-firm common ownership shareholders not only make banks and lending firms have the same goal, promote the total level, quantity, and quality of technological innovation for the green development of lending firms, and profit from the firms' short- and long-term market responses. Our findings are prominent in private enterprises, small-capitalization enterprises, and bull market cycles. In addition, we discover that shareholder reduction restrictions and policies restricting corporate shareholding in financial institutions enhance bank-firm common ownership shareholders on corporate green technological innovation development. Common ownership shareholders reduce information asymmetry between banks and lending enterprises and provide green loans to support enterprise green technology innovations. Furthermore, alleviating financing constraints and strengthening the supervisory role are important influence mechanisms. In this regard, carried PSE analysis indicates the direct effect of bank-firm common ownership shareholders to promote enterprise green development of technological innovation accounts for about 14 % of the total effect, the intermediary effect of “financing mechanism” and “supervision mechanism” account for about 82 % and 4 %, and the “financing mechanism” is more important than the “supervision mechanism.” The findings of this paper can optimize the credit market to serve the green and high-quality development of Chinese enterprises better.

Ifs Model Determinant in Sepahijala District of Tripura

The present study was undertaken to study the determinant for adoption of different farming system and major constraints faced by the respondents in the selected area. The research work was conducted under Charilam and Boxanagar blocks and from each block six villages were selected. Total 120 respondents were selected by adopting purposive stratified simple random sampling technique. The results of the study reveal that majority (59.00 per cent) of the respondents were of middle age, out of that 96 per cent were male respondents; married are 96.70 per cent; majority (45.00 per cent) respondents were up to middle school and 45.00 per cent respondents lives in semi-pucca house; majority (62.00 per cent) respondents were medium (2.00 to 3.50 ha) land holding. 71.00 per cent of the respondents were medium (4 to 8 family members); majority (65.80 per cent) were engaged under agriculture and majority (70.80 per cent) respondents were having experience of 7 to 11 years. During the research work total 8 IFS were identified in the study area viz; paddy + potato + dairy; paddy + tomato + dairy; paddy + potato + fishery + duckery; paddy + potato + fishery + piggery; paddy + brinjal + fishery + dairy; paddy + brinjal + fishery + poultry; paddy + cabbage + dairy; paddy + cabbage + dairy + vermicompost; out of that IFS-III recorded as highest contribution, followed by IFS-IV towards the benefit: cost ratio recorded as 3.31 and 3.30, respectively. Also, the age, education, land holding, experience and perception of the farmer contributed significant role for the adoption of integrated farming system. High input cost and scarcity of family labour were the major constraints faced by farmers. Government subsidies must released the enormous amount / number with low interest rate of bank loans; while the enterprise comprising of crops, livestock and fishery turns out to be remunerative for enhancing the income as well as increasing the employment opportunities to farmers.. KEYWORDS :Integrated farming system (IFS), Determinant, Economics, Respondents, Adoption, Income.

How Does Financial Development Affect the Volume of Nuclear Energy? Assessing The Relationship Between Nuclear Energy and Finance

The main objective of this study is to reveal the relationship between the volume of nuclear energy, which is becoming increasingly important as a clean energy source in today's world where the effects of environmental pollution are widely discussed, and financial indicators within the framework of nuclear energy producing countries. The study analyzes the relationship between the variables of domestic bank credit to the private sector (per capita) and gross capital formation (per capita) and the volume of nuclear energy per capita for the period 1970-2022. In the study, the panel cointegration test developed by Olayeni et al. (2020) was used to determine the long-run relationship between the variables. In addition, the coefficients were calculated using the cointegration estimator proposed by Bai (2009). According to the results of panel Fourier cointegration test, cointegration relationship is detected in all panel countries according to both PP and GLS values. According to the results of panel cointegration coefficient estimates, the CRD variable has a negative effect on the NUC variable, and the CAP variable has a positive and statistically significant effect. To the best of our knowledge, there is no study in the literature that examines the relationship between the per capita amount of bank loans to the private sector, the per capita amount of gross capital, and nuclear energy to understand the dynamics and impact of the financial and energy sectors on environmental and economic sustainability. It is thought that the study will make an important contribution to the related literature in this respect.

Does government dual-target management affect local bank credit structure? Evidence from China

This study empirically examines the impact of government dual-target management of economic growth and environmental constraints on bank credit structure, by taking 231 local commercial banks in China from 2008 to 2022 as the sample. It was found that although economic growth target increases the similarity of bank loans’ industrial structure, the introduction of environmental constraint target significantly weakens this impact. Mechanism analysis suggests that the implicit guarantee role of the government and intensifying competition among banks are important influencing mechanisms. Furthermore, the effect exhibits heterogeneity due to differences in economic cycles, city development levels, and bank capital adequacy ratios. The findings have important implications for government target setting and management, as well as for preventing banking financial risks.

Bank Lending and Policy Interactions—A Comprehensive Assessment for the G20 Countries

ABSTRACTThis study examines the joint impact from supervisory requirements, monetary policies and rescue packages on the supply of bank loans. Evidence is obtained from conceptual considerations and the empirical investigation of G20 banks over the period 1995–2021. To prepare the analysis of interactions, we first address modelling concepts and consistently identify the effects on bank lending that come from each of the regulatory approaches in isolation. Second, we empirically assess the effects that result from the parallel application of policy actions. Short‐term liquidity ratios in combination with further variables mostly associate with positive interaction effects. In contrast, the joint assessment of long‐term liquidity ratios as well as leverage ratios with other policy actions usually provides negative effects. Overall, the results suggest that unconventional monetary policy and rescue actions can stimulate bank lending only after the institutions have restored their own stability. Interactions of policy actions matter, and both regulatory authorities and bank management should consider them.

Impact of Digital Technology on Traditional Banking: A Case From the Credit Market in the European Union

ABSTRACTThe aim of this study is to investigate whether digital technologies affect the credit market in the European Union (EU). The impact of digital technology on three types of bank loans (residential mortgage loans, consumer loans and corporate loans) is analysed separately for two groups of EU countries: Central and Eastern Europe and Western Europe. A dynamic panel regression model is employed based on yearly data on the individual bank level. The sample panel data cover the period 2010–2019. The results show that digital technology affects the growth of loans for households, mortgages and consumer loans. We also find heterogeneity between the Central and Eastern European and Western European banking sectors. Furthermore, the impact of digital technology on bank loan development is significantly stronger in foreign banks. Finally, the findings confirm the dominant role of digital technologies in loans for households during the analysed period. This is the first comprehensive study on the determinants of different loan types in the context of digital technology use in the EU.

The Effect of Economic Uncertainty on Access to Finance: An Empirical Examination for European SMEs

This study examines the effect of economic uncertainty on the probability of access to finance for the years between 2015 and 2020. Survey on Access to Finance of Enterprises (SAFE) dataset is used for measuring the level of access to finance and The IMF World Uncertainty Index (WUI) is considered as a proxy for uncertainty. According to probit regression model results, the uncertainty negatively affects the probability of firms’ access to bank loans while positively affecting the likelihood of access to trade credit. The results also reveal that some firm-level and macroeconomic indicators significantly impact access to finance.

The Impact of SME Financing Policies on Financial Reporting: A Case Study

Considering financing crucial for the daily survival of entities, it is fundamental to understand the impact of the measures taken by companies regarding the financing obtained. Therefore, the study aims to analyse the impact of financing policies on the financial reporting of entities through an analysis of the financial statements for the year 2021 of three entities. After analysing the results, it is demonstrated that bank loans are the main source of financing used by entities to fund their investments. However, it is noted that the entities under analysis seek external sources of financing, which has significantly increased their financial dependence. Therefore, when compared to their industry sector, these entities have a much lower level of financing via Equity. Regarding the financing costs incurred by their financing policies, it is observed that these are significantly high, mainly in relation to the weight of financing costs in total EBITDA, which impacts the net result of the period. Finally, the high impact of the rise in the Euribor rate on financing costs in 2023 was demonstrated. Thus, it is evident that in relation to other sources of financing, their respective expenses will increase dramatically, potentially greatly affecting the results of the companies.

Environmental credit regulatory policies and bank loans of heavily polluting firms

We use the environmental credit rating policy as a quasi-natural experiment to analyze how these policies affect bank loans to heavily polluting firms in China. Utilizing a panel dataset of A-share listed firms and difference-in-differences models, we find that policies (a) reduce the scale and proportion of long-term loans, (b) increase loan costs and financial distress risks, and (c) enhance social responsibility for heavily polluting firms. State-owned firms face stronger regulation, while those in regions with advanced digital financial markets and lower carbon emissions encounter smaller credit constraints.