Lower Default Rates Research Articles

Correlates of default from anti-tuberculosis treatment: a case study using Kenya's electronic data system.

In 2012, the World Health Organization estimated that there were 120,000 new cases and 9500 deaths due to tuberculosis (TB) in Kenya. Almost a quarter of the cases were not detected, and the treatment of 4% of notified cases ended in default. To identify the determinants of anti-tuberculosis treatment default. Data from 2012 and 2013 were retrieved from a national case-based electronic data recording system. A comparison was made between new pulmonary TB patients for whom treatment was interrupted vs. those who successfully completed treatment. A total of 106,824 cases were assessed. Human immunodeficiency virus infection was the single most influential risk factor for default (aOR 2.7). More than 94% of patients received family-based directly observed treatment (DOT) and were more likely to default than patients who received DOT from health care workers (aOR 2.0). Caloric nutritional support was associated with lower default rates (aOR 0.89). Males were more likely to default than females (aOR 1.6). Patients cared for in the private sector were less likely to default than those in the public sector (aOR 0.86). Understanding the factors contributing to default can guide future program improvements and serve as a proxy to understanding the factors that constrain access to care among undetected cases.

Hidden Champions or Black Sheep? Evidence from German Mini-Bonds

This paper presents a first empirical examination of all available German mini-bond offerings between 2010 and 2015. We compare the default probability according to a mini-bond’s initial rating with that implied by credit risk models, and show that rating agencies can create ratings inflation by issuing overly favorable ratings. This creates a “window of opportunity” for lower-quality firms to compete for funding. In this environment, high-quality firms have an incentive to use mini-bond underpricing to signal their quality. Our data highlight that, according to information-based corporate finance theory, higher underpricing is correlated with higher-quality mini-bond issuers and lower early default rates.

Home based care to multi-drug resistant tuberculosis patients: A pilot study

BackgroundIndia is a high tuberculosis burden and large population setting country. Multidrug-resistant tuberculosis patient has to undergo 24–27 months treatment and is expected to adhere to it. There is a need to increase compliance of MDR Regimen in MDR-TB cases, to prevent its further spread. The present study focuses on describing the role of home care support with counseling in the outcome of MDR-TB patients, in Delhi, India. Material and methodsThis is a prospective study carried out at a Community Health Centre, Delhi, involving 113 MDR-TB patients as and when they got registered with DOTS Plus centres, in two government hospitals of Delhi between August 2009 and March 2010. The study period was August 2009 to October 2012. These patients received daily MDR Regimen from their respective DOTS Providers. The patients' names and addresses were taken from the lists supplied by these hospitals. Final analysis was carried out for 101 MDR-TB cases. ResultsOut of 101 patients treatment outcomes were: 69.3% cured and 2.0% treatment completed (treatment success rate 71.3%). A low default rate of 6.9% was seen which is assumed to be due to the home based care. ConclusionThese results indicate that Home based care with counseling support is an important intervention in management of MDR-TB patients and it needs to be substantiated by further research.

Appraisal inflation: Evidence from the 2009 GSE HVCC intervention

Appraisal inflation is a prominent aspect of lax underwriting practice. The GSE May 2009 Home Valuation Code of Conduct (HVCC) aims to prohibit lenders from influencing appraisers. Refinance loans, without a transaction price, are potentially more susceptible to appraisal inflation than purchase loans. We use GSE refinance loans as our treatment group and non-GSE refinance loans as the control group, and find that GSE refinance loans originated after May 2009 have lower default rates than non-GSE refinance loans. We further measure the appraisal inflation (bias) as the difference between the appraisal value in a 2009 refinance transaction and the actual transaction price in an earlier purchase transaction for the same property adjusted for local housing value changes. We find that the reduction in appraisal bias was larger for GSE refinance loans than for non-GSE refinance loans. This paper quantifies the “contribution” of appraisal inflation in poor loan underwriting standards and highlights the importance of unbiased and independent appraisal.

Are Women Better Bankers to the Poor? Evidence from Rural Microfinance Institutions

Microfinance Institutions (MFIs) provide financial services to the poor and in many ways resemble both banks and non‐profit organizations. Many MFIs target women because more women than men are poor, especially in rural areas. Studies show that women manage money differently from men and have different leadership styles. Thus, in credit unions and financial firms, female and male managers achieve different results. In microfinance, gender diversity on the board of MFIs is beneficial, and loans authorized by female loan officers have lower default rates. Motivated by these findings, we ask whether MFIs with a female Chief Executive Officer (CEO) are more efficient at serving the poor without jeopardizing financial sustainability. We adapt the banking approach to managerial (in)efficiency to account for the outreach and sustainability goals of the MFIs, and evaluate whether MFIs' outreach efficiency differs by the gender of their respective CEOs. We estimate a stochastic frontier cost function using the Battese‐Coelli (1995) model and the “true” random effects estimators using panel data from over 250 MFIs. We find that MFIs with female CEOs have significantly higher outreach efficiency than MFIs with male CEOs. Similar results are found with a two‐step stochastic frontier approach. Overall, the results suggest that promoting gender diversity at the top levels of MFI management is likely to have both social and financial benefits.

Local Enterprise Agency loan funds and investment readiness in UK small firms

We considered (i) whether loan funds managed by Local Enterprise Agencies (LEAs) in England addressed the finance gap faced by new and small firms that are unable to raise investment capital from other sources, and (ii) whether LEA loan funds offered value-for-money and sustainability. Utilising realistic evaluation and data provided by LEAs, we found that funds had a high conversion rate of applications to loans, presumably because most referrals came from advisers and so propositions unlikely to be supported had already been weeded out, and due to high repayment rates. The level of demand suggested that knowledge of the availability of loans from these sources was still low, but that loans from LEAs were genuinely additional for small firms that would not otherwise have been able to raise the required finance from other sources, indeed in many cases leveraging commercially sourced funds. While LEA loan funds were becoming more efficient, they were not – and were unlikely to become – wholly sustainable. The high conversion rate (and low default rate) suggested that the real need for prospective entrepreneurs is effective advice and support to improve their ‘investment readiness’ and thus assist in unlocking the necessary financial support.

Post Kala-Azar Dermal Leishmaniasis following Treatment with 20 mg/kg Liposomal Amphotericin B (Ambisome) for Primary Visceral Leishmaniasis in Bihar, India

BackgroundThe skin disorder Post Kala-Azar Dermal Leishmaniasis (PKDL) occurs in up to 10% of patients treated for visceral leishmaniasis (VL) in India. The pathogenesis of PKDL is not yet fully understood. Cases have been reported in India following therapy with most available treatments, but rarely in those treated with liposomal amphotericin B (Ambisome). Between July 2007 and August 2012 with the support of the Rajendra Memorial Research Institute (RMRI), Médecins Sans Frontières (MSF) supported a VL treatment programme in Bihar, India—an area highly endemic for Leishmania donovani—in which 8749 patients received 20 mg/kg intravenous Ambisome as first-line treatment. This study describes the characteristics of patients who returned to the MSF supported treatment programme with PKDL.Methods and Principal FindingsOver a 5-year period, Ambisome was administered to 8749 patients with laboratory-confirmed VL (clinical signs, rK39 positive, with/without parasite confirmation) in four intravenous doses of 5 mg/kg to a total of 20 mg/kg, with a high initial-cure rate (99.3%) and low default rate (0.3%). All patients received health education highlighting the possibility and symptoms of developing PKDL, and advice to return to the MSF programme if these symptoms developed. This is an observational retrospective cohort study of the programme outcomes. Of the 8311 patients completing treatment for their first episode of VL, 24 (0.3%) returned passively to the programme complaining of symptoms subsequently confirmed as PKDL, diagnosed from clinical history, appearance consistent with PKDL, and slit-skin smear examination. Of the 24 patients, 89% had macular lesions, with a median time (interquartile range) to development of 1.2 (0.8–2.2) years following treatment. Comparison of the demographic and clinical characteristics of the VL patients treated with Ambisome who later developed PKDL, with those of the remaining cohort did not identify any significant risk factors for PKDL. However, the time to developing PKDL was significantly shorter with Ambisome than in a subset of patients presenting to the programme with PKDL following previous sodium stibogluconate treatment for VL.ConclusionsIn this large cohort of patients with VL in Bihar who were treated with 20 mg/kg Ambisome, PKDL following treatment appears to be infrequent with no predictive risk factors. The shorter median time to developing symptoms of PKDL compared with that after conventional VL treatments should be taken into account when counseling patients treated with regimens including Ambisome.

Factors Influencing Early Health Facility Contact and Low Default Rate among New Sputum Smear Positive Tuberculosis Patients, India

Early case identification and prompt treatment of new sputum smear positive case are important to reduce the spread of tuberculosis (TB). Present study was planned to study the associated factors for duration to contact the health facility since appearance of symptoms and treatment default. Methodology. It was prospective cohort study of TB patients already registered for treatment in randomly selected TB units (TUs) in Himachal Pradesh, India. Relative risk (RR) was calculated as risk estimate to find out the explanatory variables for early contact and default. Results. Total 1607 patients were recruited and 25 (1.5%) defaulted treatment. Patients from nuclear family (aRR: 1.37; 1.09–1.73), ashamed of TB (aRR: 1.32; 1.03–1.70), wishing to disclose disease status (aRR: 1.79; 1.43–2.24), but aware of curable nature (aRR: 1.67; 1.17–2.39) and preventable (aRR: 1.35; 1.07–1.70) nature of disease, contacted health facility early since appearance of symptoms. Conclusion. Better awareness and less misconceptions about disease influences the early contact of health facility and low default rate in North India.

Loan Repayment Performance of Public Agricultural Credit Agencies: Evidence from Jordan

The agricultural production process in many developing countries has been negatively impacted by poor loan repayment. Most of public credit agencies in such countries suffer from this critical problem. This study aimed at evaluating the loan-repayment performance of public agricultural credit agencies. The Agricultural Credit Cooperation (ACC) in Jordan was chosen to be investigated. To achieve its goals, the study delved into the determinants of loan-repayment performance among ACC borrowers. Data from ACC sources for the period of Financial Year 1960 to Financial Year 2011 (52 years) were analyzed. Simple descriptive statistics tests and regression techniques were conducted. Factors related to the accessibility of farmers to credits, to the collection performance of ACC, and to the administration performance of ACC were included in the analysis. The results of the study revealed that the repayment rate of the investigated public credit agency (ACC) was 0.92, indicating a high level of repayment performance and a low default rate (0.08). The positive effects of the volume of loans borrowed, volume of loans repaid number of borrowers, number of credit agency staff, and borrower experience were the most important factors related to this result. Sufficient and strict controls as well as monitoring are required. Outreach to beneficiaries should be improved to enhance repayment performance. To avoid the burden of provisioning on agricultural credit agencies, legal actions and guarantees should be taken against loans defaulters. Introducing a reward system for those individuals who pay on time will be helpful in enhancing repayment performance.

The Comeback Asset Class

Loans may offer attractive risk-adjusted returns as well as low default and high recovery rates, but investors in this asset class must tolerate various complications.

Patient Characteristics Associated with Non-Adherence to Anti Tuberculosis Treatment in Sri Lanka

Introduction: Sri Lanka had achieved a significant improvement in the tuberculosis control including a reduction of the default rate since introduction of the DOTS strategy to the National TB control Programme in 1997. Patients’ adherence to anti TB treatment may be measured using either process oriented or outcome oriented definitions. Default rate is an outcome oriented definition that may be used as an indicator of poor patient adherence to anti TB treatment. One of the main obstacles in achieving the best tuberculosis (TB) control is that patients do not complete full course of anti TB treatment. A prospective cohort study was carried out with the objective to identify patient characteristics that associate with defaulting anti tuberculosis treatment. Methodology: This was a prospective cohort study of new smear positive pulmonary tuberculosis patients registered for treatment between 1.6.2008 and 31.8.2008 in seven districts in Sri Lanka. Data on the patient characteristics and the plan of management were collected at the beginning of the treatment using a pre tested structured questionnaire. During the follow up and at the end of the treatment, results of sputum microscopy and the treatment outcome were recorded. The patients who interrupted treatment for 2 months or more (defaulters) during the course of treatment were again investigated in the field. In the statistical analysis, patient characteristics of the defaulters were compared with the characteristics of patients who were cured. Results: There were 22 defaulters giving a default rate of 4.59%. Being a male, poor educational background, having a casual job, regular smoking, and regular alcohol use were significantly associated with defaulting treatment (p < 0.05). Sinhalese had lower default rate than other ethnic groups. At the field investigation, 43% of the defaulters were found not living in the addresses given to the treatment providers. Field investigators have further reported that financial reasons, substance abuse, feeling well, and lack of family support also as causes of defaulting treatment. Conclusion: Identification of risk factors by careful patient interview, early home visit, and monitoring of patient behaviour early in the course of treatment will help to predict whether adherence is likely to be a problem. So that, the treatment provider will be able to arrange a flexible and patient centered approach to ensure maximum adherence. SAARC Journal of Tuberculosis, Lung Diseases & HIV/AIDS; 2012; IX(2) 19-25 DOI: http://dx.doi.org/10.3126/saarctb.v9i2.7974

Evaluación y medición de la calidad de gestión en las cajas rurales Alcance y sustentabilidad

<p align="justify">El presente artículo destaca el beneficio y buen funcionamiento del programa microfi- nanciero denominado Cajas Rurales. Además de un estudio comparativo, para observar las fortalezas y debilidades que ellas presentan, se desarrolla la construcción del modelo “Evaluación y medición de la calidad de gestión de las Cajas Rurales” (EMCGCR). El diagnóstico preliminar indica que las cajas son una organización microfinanciera sus- tentable en los sectores rurales. Los resultados han desmoronado el mito: “los pobres no pagan”; reportan tasas de morosidad muy bajas. Para reforzar cuantitativamente esta conclusión se emplearon alternativamente técnicas de análisis multivariante y de inte- ligencia artificial. Se comprobó la eficiencia de las cajas y además, que ambas técnicas permitieron clasificar con alto desempeño la sustentabilidad de las cajas estudiadas.</p><p> </p>

Fiscal Limits and Monetary Policy: Default vs. Inflation

In times of fiscal stress, governments fail to adjust fiscal policy in line with the requirements for debt sustainability. Under these circumstances, monetary policy impacts the probability of sovereign default alongside inflation dynamics. Uribe (2006) studies the relationship between inflation and sovereign defaults with a model in which the central bank controls a risky interest rate. He concludes that low inflation can only be maintained if the government sometimes defaults. This paper follows Uribe (2006) by examining monetary policy that controls a risky interest rate. However, it differs by the baseline assumption about the objectives of the central bank. In this paper, monetary policy is not pure inflation targeting: it is assumed that the central bank minimizes the probability of default under the upper restriction on inflation. An advantage of this framework is that it avoids the issue of zero risk premium, which exists in Uribe (2006), while at the same time allowing a study of the relationship between the constraints on monetary policy, the equilibrium default rate, and the risk premium. We show that monetary policy that controls the risky interest rate can mitigate default risks only when the upper limit on inflation is sufficiently high. The higher the agents believe the upper limit on inflation to be, the lower the equilibrium risk premium and probability of default are. Under a low default rate, constraints on inflation can only be fulfilled when fiscal shocks are either positive or small.

Pricing transparency and performance in the microfinance industry: Truth-in-lending, profitability, scale, and funding

Microfinance consumer protection is identified as essential to the development of inclusive financial systems. Beyond protecting existing consumers, truth-in-lending practices enhance the credibility of Microfinance institutions in providing responsible financial services to un-banked populations. This research explores the value of pricing transparency i.e. the alignment of what a microfinance institution (MFI) communicates as its interest rate to the borrower as compared to its actual interest rate to gauge the robustness of consumer protection relative to the MFI’s financial performance. The research applies a focus around the main concerns a manager of an MFI faces when deciding whether to implement transparent loan pricing – namely, that it will not diminish the MFI’s performance in terms of profitability, scale or funding. There is compelling evidence that transparency and profitability are not necessarily mutually exclusive. Transparency better serves customers, which leads to an expanded client base with lower default rates and a better reputation for the MFI. It helps attract and retain donors and investors who are increasingly responsive to social performance metrics. Finally, transparent practices form the basis for enhanced accountability, which is fundamental to establishing the credibility of the MFIs in providing financial access to the poor and contributing to the industry’s long-term viability.JEL Codes: G21, D82, L25, G23, E43, G28, D18,

Monitoring credit risk in the social economy sector by means of a binary goal programming model

Monitoring the credit risk of firms in the social economy sector presents a considerable challenge, since it is difficult to calculate ratings with traditional methods such as logit or discriminant analysis, due to the relatively small number of firms in the sector and the low default rate among cooperatives. This paper introduces a goal programming model to overcome such constraints and to successfully manage credit risk using economic and financial information, as well as expert advice. After introducing the model, its application to a set of Spanish cooperative societies is described.

Risk factors for drug-resistant tuberculosis patients in Lithuania, 2002–2008: Table 1–

To the Editors: Lithuania, a high-priority country for tuberculosis (TB) control in the World Health Organization European Region, has one of the world’s highest rates of multidrug-resistant (MDR)-TB. It has recently seen an increase in the rates of both primary and acquired MDR-TB (9% of new and 50% of re-treatment cases were MDR in 2010), and the appearance of extensively drug-resistant (XDR)-TB cases constituting 4.3% of all MDR-TB cases [1, 2]. Drug resistance is accompanied by low treatment success rates (40% in newly diagnosed and 19% in re-treatment cases in 2009) among MDR-TB patients despite a well-established TB control programme with relatively good indicators of treatment success and low default rates (7%) among patients with sensitive TB [2]. Although there are data describing the molecular epidemiology of drug resistance in Lithuania [3], relatively little is known about risk factors for drug resistance. We analysed 7 yrs of Lithuanian national surveillance data: all treated culture-confirmed TB cases, including new and re-treatment cases, registered from 2002 to 2008 in the national TB register (established in 2002). Our aim was to describe the epidemiological, clinical and socioeconomic features of MDR-/XDR-TB cases, and to establish risk factors for drug resistance acquisition and development during re-treatment. Standard case reporting included demographic and clinical information with initial and follow-up drug susceptibility testing (DST) results. Individual patients suspected of having a high risk of HIV/AIDS were offered testing for HIV according to the national policy. A randomly selected proportion of strains (∼18%) was genotyped (by IS6110 restriction fragment length polymorphism typing and spoligotyping) within the routine service …

Municipal Securities: The Crisis of State and Local Government Indebtedness, Systemic Costs of Low Default Rates, and Opportunities for Reform

Municipal securities are securities issued by state and local governments to pay for public infrastructure, public services and to meet day-to-day funding needs. The conventional wisdom says that municipal securities are low risk because issuers rarely default. Municipal issuers rarely default because they pledge their taxing power or dedicated revenue streams for repayment, and thus must raise taxes and/or cut spending if necessary to avoid default. Other legal, political and economic constraints also make it difficult for issuers (and thus taxpayers) to obtain relief from municipal bond debt. This state of affairs means that when issuers take steps to avoid default and reduce investor risk of loss (as they must), they increase risks and costs for taxpayers responsible for paying back municipal bond debt. In this way, the low default rate for municipal securities increases risks and costs for those whose credit backstops municipal securities debt. As it stands today, the federal securities regulatory regime applicable to the municipal securities market reflects an investor-centric, default-centric approach to risk. Under the current regime, obligated stakeholders must disclose certain facts relating to default risk to investors. Once that occurs, risk is an economic issue to be dealt with through pricing and deal terms, not a subject of regulatory concern. In this article, I argue that the conventional approach to risk is inadequate, because it ignores and externalizes risks and costs that issuers and taxpayers face when communities use debt and derivatives to finance infrastructure and public services. Since these risks and costs impact millions of taxpayers, and can have a devastating effect on public and private life, I argue that they ought to be subjects of regulatory scrutiny under the federal securities laws. This article proposes a series of regulatory reforms designed to bring taxpayer risk into the regulatory conversation, including the following: (i) apply fiduciary duties of care and loyalty to underwriters, derivatives dealers and public officials when they provide advice to issuers respecting the structure, timing and terms of municipal bond offerings and derivatives transactions or serve as derivatives counterparties; (ii) expand and formalize risk identification and tracking systems so that stakeholders will have a better chance of identifying systemic risks to all stakeholders (including taxpayers) before a crisis erupts; (iii) implementing systems to track and monitor the effectiveness of regulatory reforms, so that we can leverage successful strategies and avoid (or at least mitigate the impact of) mistakes.

Multidrug Resistant Tuberculosis; a Pharmacological view based on Revised National Tuberculosis Control Programme DOTS-Plus Guidelines.

Directly Observed Therapy Strategy (DOTS) -Plus is a part of DOTS program that adds approach for multidrug resistance tuberculosis (MDR-TB) diagnosis, management, and treatment. WHO approved DOTS-Plus program began in 2000 and was established to encourage access to high quality second line drugs for appropriate use in MDR-TB control programs. The top priority is to prevent the emergence of MDR-TB by ensuring a low default rate of cases treated with first-line anti-TB drugs. If MDR-TB has emerged in a certain area, it should be treated in addition to improving the basic treatment. In this situation, accurate and reliable drug susceptibility testing, methods to support patients in order to ensure direct observation of complete treatment and the use of maximally effective regimens must be ensured. Second-line drugs should not be held back in patients with MDR-TB rather they have a good chance of cure with it, hence the treatment, if it is to be provided, should be optimally selected and administered. This review is highlighting the pharmacological view point of second line anti tubercular drug incorporated in DOTS-Plus therapy for MDR-TB.

State Antipredatory Lending Laws and Neighborhood Foreclosure Rates

ABSTRACT:In this study, we examine the impact of state antipredatory lending laws (APLs) on neighborhood foreclosure and delinquency rates using a set of panel data regression models. We find strong evidence that neighborhoods have lower default rates in states with laws that extended federal coverage and/or restricted more mortgage contract terms, in states with broader coverage of subprime loans with high points and fees, and in states with more restrictive regulations on prepayment penalties. A typical APL lowers neighborhood default rates by between 3.8% and 18%, depending on the default risk measure considered. The findings remain consistent when we restrict the analysis to cross-border neighborhoods, suggesting that they are not due solely to unobservable market variation.

Are Commercial Mortgage Defaults Affected by Tax Considerations?

We study whether tax considerations are an important determinant of commercial mortgage default. We also study whether large lenders are better informed, or better at interpreting information for lending purposes, and hence have lower foreclosure rates; whether lenders have more information on larger borrowers than smaller borrowers, and hence have lower foreclosure rates on larger loans; and whether commercial mortgage defaults are related to debt service coverage and loan-to-values, both initial and contemporaneous. The paper's main findings are fourfold. First, holding all else equal, there is evidence that tax considerations influence investors' decisions about when to "put" assets to lenders. The results are consistent with the argument of Constantinides (1984). Second, the evidence suggests that large lenders are especially knowledgeable about commercial mortgage borrowers and commercial property markets, in that they have lower foreclosure rates than smaller lenders. Third, on the question of whether lenders have more information on larger borrowers than smaller borrowers, we find that larger loans have, on average, lower default rates than smaller loans. Fourth, the findings suggest that lower default rates are associated with higher debt service coverage ratios, both initial and contemporaneous.