Models Of Lending Research Articles

Tools for assessing obstacles in implementation of energy saving measures by enterprises

Purpose. To create methodological tools for assessing obstacles to implementation of energy saving measures by enterprises. Methodology. In the course of the research the following methods were used: economic-mathematical modeling (substantiation of parameters of preferential crediting of energy-saving projects of enterprises on the basis of building models of repayment of loans and obtaining financial and economic results from these projects), classification and generalization (when grouping obstacles to reduction of consumption of non-renewable energy resources), system analysis (in the development of methodological principles for assessing barriers to energy efficiency); economic analysis and technical and economic calculations (when performing empirical studies on barriers to reducing natural gas consumption), questionnaire (when conducting a survey of owners and managers of surveyed enterprises on factors that hinder the implementation of projects), mathematical statistics (to process the results). Findings. Based on the results of a survey of owners and managers of 74 Ukrainian enterprises belonging to three industries characterized by significant volumes of natural gas consumption, the most significant barriers to reducing the consumption of non-renewable energy resources were identified and grouped. Methods for estimating the level of these barriers by the totality of the studied enterprises and by certain types of financial and economic barriers to reducing the consumption of energy resources are proposed. Models of substantiation of parameters of preferential crediting of energy saving projects which have for the purpose of realization of measures for reduction of consumption of natural gas at the enterprises are constructed. Originality. Existing methods for grouping barriers to reducing the consumption of non-renewable energy resources have been supplemented by introducing such additional features as the stages of development and implementation of energy saving measures and the factors of occurrence of relevant barriers. The methodological basis for assessing these barriers has been improved by substantiating the approach according to which the height of the barrier is determined by the cost of resources to overcome it. Formalized models of preferential lending for energy-saving projects of enterprises have been built, taking into account the efficiency of budget expenditures for such lending. Practical value. The obtained results can be used by both enterprises and public authorities and local governments in assessing obstacles to reducing the consumption of non-renewable energy resources and developing a set of organizational and economic measures to overcome them.

Credit Risk, Regulatory Costs and Lending Discrimination in Efficient Residential Mortgage Markets

Significant differences in loan terms between demographically distinct groups of borrowers in the United States are often interpreted as evidence of systematic ethnic, racial or gender discrimination by lenders. The appearance and interpretation of such discrimination has long been a controversial issue in public policy and has significant implications for both the economic efficiency and equity of credit markets. Arising from concern for borrowers disadvantaged by such discrimination, the design and implementation of regulations preventing the disparate treatment of demographically distinct groups by lenders are generally considered to have enhanced the equality of access to credit. Unfortunately, existing research has not examined whether this gain in social equity comes at a cost in efficiency borne by all market participants. The reliance on adverse selection or moral hazard in current models of limited lending and credit rationing poses difficulties in empirical testing for the presence and magnitude of such costs. This paper offers a novel theoretical framework in which lending discrimination can endogenously arise in the presence of value-maximizing lenders competing in an economy with complete markets, common knowledge and arbitrage-free pricing. By avoiding the reliance of current models on the exogenous presence of adverse selection or moral hazard, this framework allows potential efficiency costs to beexamined in a market environment without an ex ante assumption of informational market failure. Owing to the presence of common knowledge among participants, we first show how equilibrium loan terms to borrowers in different demographic classes can diverge in such an efficient environment. We then apply the properties exhibited in market equilibria to measure the potential costs of misallocating credit risk owing to the type of regulations observed in actual credit markets.

What Are These Things Doing in the Library? How a Library of Things Can Engage and Delight a Community

On the surface, the difference between a Library of Things collection and any other collection in the library lies in the materials. We see traditional library collections as books, periodicals, sound recordings, video recordings, and the digital versions of these formats. A Library of Things can be anything beyond this, from air fryers and board games to fishing poles and Arduino kits. But if you look more closely, you begin to see that a Library of Things engages a community in a fundamentally different way than many of our traditional collections do. Through this unconventional engagement, libraries with special collections find new ways to have a meaningful impact on their communities. Good library collections do a number of things: they teach and instruct; they are representative and inclusive; they provide equal and open access to information; and they entertain. Special collections can certainly do all this, but they also afford us a unique opportunity to interact with our patrons through the materials we lend out. Certainly, some of the excitement for starting a Library of Things comes from the freedom to experiment and try out new models of lending, but there is the additional responsibility for us to make sure these collections are in alignment with the needs of our communities. When the Hillsboro Public Library was deciding on what to include in our collection of Things, we carefully considered our library’s mission and strategic goals, asked our patrons what they wanted to see in the collection, and did our best to ensure that these items would be as accessible as possible. Once the collection launched, we discovered that a Library of Things begins a dialogue with patrons, as they share with us their feedback, experiences, and ideas. We started hearing about the projects people were working on, what tools they needed, and what items they had lying around their homes that they wanted to donate to us for other people to use. While circulation numbers can tell part of a collection’s story, what really informs the success of a Library of Things and the impact it has on a community is how much the people we serve embrace it and make it their own.

Bank capital and lending: Evidence of nonlinearity from Indonesia

This paper studies the transmission of bank capital shocks to loan supply in Indonesia. Using bank data for the period 2001:Q1 to 2018:Q4, we estimate dynamic panel data models of bank lending. We find nonlinear effects of capital on loan growth. Specifically, the response of weakly capitalized banks to changes in their capital positions is larger than that of strongly capitalized banks. This non-linearity implies that not only the level of capital but also its distribution across banks in the system affects the transmission of shocks to aggregate lending. Likewise, the effects of bank recapitalization on loan growth depend on banks’ starting capital positions and the size and distribution of capital injections.

The life span of a print textbook: An investigation in the utility of aging textbook collections in academic libraries

This paper will use circulation data to explore usage trends for physical textbooks in an academic library over a sustained period of time. Conclusions will be drawn from the analysis to determine the usefulness of aging physical textbook collections in academic libraries and inform recommendations for efficient models of lending and management.

Обоснование инструментария оценки регионального ипотечного кредитования

In this article, for the growth of mortgage lending in Russia, a complex coefficient for the development level of mortgage lending was created — the Regional housing affordability ratio. The article considers the regulatory framework of the domestic mortgage, to identify marks-indicators of the mortgage state for targeted programs. The key indicator was identified — the housing affordability ratio used in the Mortgage Development Strategy until 2020, and the absence of a similar indicator in the new priority project Mortgage and Rental Housing was noted. The author studies the advantages and non-delivery of housing affordability factor with the account of the modern scientific base. Based on the adjusted housing affordability coefficient proposed by A. Kulikov and V. Yaninin, a regional housing affordability index was developed together with a methodology for calculating it based on the available statistical data. The possibilities of purchasing housing on credit by the population in different regions were determined, and the possibility of using the coefficient for grouping regions using cluster analysis to identify the uneven development of mortgages in Russia was presented. The proposed coefficient can be used as a mortgage status indicator in the regions, used to create differentiated econometric models of mortgage lending and the development of a mortgage policy that takes into account the peculiarities of Russian regions.

Mortgage Lending to Individuals in Russia during the Financial Crisis

In this paper, the authors gave an overview of the main models of mortgage lending, and presented the results of their comparative analysis. The experience of mortgage lending in developed countries during the financial crisis of 2008 is considered. It is noted that a two-level model of mortgage lending in Russia is currently used, which allows the state to control the mortgage lending market, to realize refinancing of commercial banks issuing mortgage loans using securitization. The authors considered mortgage lending in Russia during the financial crises of 2008 and 2014, and its qualitative analysis was carried out. The results of the analysis allowed the authors to conclude that the state, represented by the Agency for Housing Mortgage Lending (AHML), played a crucial role in supporting mortgage lending in Russia during financial crises. It is shown that the government subsidized the interest rate on mortgage lending, which allowed not only to stabilize its volumes after the financial crisis of 2014, but also to ensure growth. The authors used the regression model for analyzing the statistical data of mortgage lending, which made it possible to identify factors that significantly influenced the volume of mortgage lending in Russia in the period under review. The results of the study have been summarized, specific recommendations aimed at further development of mortgage lending in Russia have been prepared.

Contracting Sequentially with Multiple Lenders: The Role of Menus

AbstractWe study a credit market in which multiple lenders sequentially offer financing to a single borrower under moral hazard. We show that restricting lenders to post single offers involves a loss of generality: none of the equilibrium outcomes arising in this scenario survives if lenders offer menus of contracts. This result challenges the approach followed in standard models of multiple lending. From a theoretical perspective, we offer new insights on equilibrium robustness in sequential common agency games.

On the Role of Menus in Sequential Contracting: A Multiple Lending Example

We study a capital market in which multiple lenders sequentially attempt at financing a single borrower under moral hazard. We show that restricting lenders to post take-it-or-leave-it offers involves a severe loss of generality: none of the equilibrium outcomes arising in this scenario survives if lenders offer menus of contracts. This result challenges the approach followed in standard models of multiple lending. From a theoretical perspective, we offer new insights on equilibrium robustness in sequential common agency games.

Models of Discount Window Lending: A Review

This article is a review of the literature that discusses the role of the central-bank discount window using explicit formal general equilibrium models of the economy. For each of the main papers in the literature, a description of the model and the main mechanisms at play is provided. To increase accessibility for a broad audience, the discussion attempts to keep at a minimum the more technical aspects of the subject. A deliberate effort is made to identify common features across models and some lessons that may be useful for policymaking.

Does the Group Leader Affect Repayment Performance Differently?

Theoretical models of group lending assume that all group members are identical in terms of their effect on repayment performance. In practice, however, this may not be true. We use a unique data set obtained from a survey of 160 borrowing groups in Jordan to investigate the impact of joint liability, screening and monitoring activities, and social ties of the group leader and other group members on repayment performance as measured by the intensity of default using a negative binomial II model. Our results suggest that the joint liability and screening activities of the leader are more strongly related to repayment performance than the same variables for the rest of the group members. Social ties of all members have a significant effect on repayment, while monitoring activities have no effect.

Microfinance and Mechanism of Group Lending: Theory and Experiences

It is generally accepted that the micro-finance sector emerged as an answer to financial market failures. In this context, the paper examines the basic idea on which micro-finance is built and sees how it is different from the mainstream financial service providers. The present paper therefore, deals with the theoretical framework of microfinance including definition, economics and mechanism of group lending, gender aspects and limitations of microfinance. One of the major features of microfinance is group lending where the concept of joint-liability helps in mitigating problems caused by adverse selection and moral hazard. Other important mechanisms, besides group lending, are the use of dynamic incentives, collateral substitutes, and regular repayment schedules, the targeting of women and social programmes which, according to theory, play a significant role. The paper also discusses about the relation between the models of Joint Liability Group lending. There has been considerable debate over whether micro-finance can reach the ‘poorest of the poor’ and it has also been highlighted in the paper. The micro-finance programme is ideologically designed to achieve women's contribution to family welfare and assist poor women to obtain socio-economic empowerment, but often the positional vulnerability of the women is exploited at the time of repayment. Thus the paper also highlights the limitations of micro-finance forwarded by Ohio School of Development Finance which stated that debt is not an effective tool for helping most of poor people to enhance their economic conditions as they operate in small farms or micro enterprises.

Financial Intermediaries and Economic Development – A Study of Transaction Costs of Borrowing for the Poor

This study while validating the increasing role for financial intermediaries in economic development has attempted to highlight the importance of reduction of transaction costs for financial deepening and consequent economic growth. It is elucidated that higher transaction costs of borrowing for the poor in particular will retard the long-term growth of rural financial markets. Further, the empirical analysis based on the primary (survey) data has analysed and established that microfinance models of lending offer considerably lower costs of borrowing than those in regular models of direct lending by banks. The study opines that microfinance model of lending can provide cost-efficient model of financial intermediation for speedy financial development to further economic growth.

Financial Intermediaries and Economic Development: Evidence on Transaction Costs of Borrowing by the Poor

This study, while validating the increasing role for financial intermediaries in economic development, analyzes the importance of reducing the transaction costs for financial deepening and, consequently, economic growth. It shows that higher borrowing transaction costs for the poor in particular will retard the long-term growth of rural financial markets. Further, the empirical analysis based on our primary (survey) data indicates that the microfinance models of lending offer considerably lower costs of borrowing than those in regular models of direct lending by banks. The study suggests that microfinance model of lending can provide cost-efficient avenue for speedy financial development and, subsequently, economic growth.

Bank Market Power and SME Financing Constraints*

Theoretical models of lending and industrial organization theory predict that firm access to credit depends critically on bank market structure. However, empirical studies offer mixed results. Some studies find that higher concentration is associated with higher credit availability consistent with the information hypothesis that less competitive banks have more incentive to invest in soft information. Other empirical studies, however, find support for the market power hypothesis that credit rationing is higher in less competitive bank markets. This study tests these two competing hypotheses by employing for the first time a competition indicator from the Industrial Organization literature – the Lerner index – as an alternative to traditional measures of concentration. We test the information and the market power hypotheses using alternative measures and firm borrowing constraints. We find that the results are sensitive to the choice between IO margins and traditional concentration measures. In particular, the HHI seems to support the information hypothesis while the Lerner index supports the market power hypothesis. The Lerner index, however, is found to be a more consistent indicator of market power across different measures of financing constraints. Moreover, the Lerner index is found to exhibit the larger marginal effect on the probability that a firm is financially constrained among a large set of firm level, bank market and environmental control variables. Our results are robust to alternative measures of financial constraints and cast doubt on the validity of relying on concentration measures as proxies of competition in corporate lending relationships (247 words).

Using Repayment Data to Test across Models of Joint Liability Lending

Theories rationalising joint liability lending are rich in implications for repayment rates. We exploit this fact to test four diverse models. We show that the models’ repayment implications do not always coincide. For example, higher correlation of output and borrowers’ ability to act cooperatively can raise or lower repayment, depending on the model. Data from Thai borrowing groups suggest that repayment is affected negatively by the joint liability rate (ceteris paribus) and social ties, and positively by the strength of local sanctions and correlated returns. Further, the relative fit of the adverse selection versus informal sanctions models varies by region.

A Comparison of Unexplained Racial Disparities in Bank-Level and Market-Level Models of Mortgage Lending

Statistical models of mortgage lending have been used by both academics and regulators to assess the importance of racial discrimination in lending decisions. Models estimated by bank regulators are specified at a bank level, allowing regulators to focus on possible disparate treatment discrimination against minorities. In contrast, the academic literature has tended to estimate models combining data across many banks. We argue that the market-level approach uses a mis-specified model whose estimates do not clearly measure any well-defined concept of discrimination. Using data from eight banks, we find important differences between bank-level and market-level models, with market-level models producing larger estimated racial effects than bank-level models.

A costly state verification model with diversity of opinions

In simple models of borrowing and lending with ex-post asymmetric information, Gale and Hellwig (1985) and Williamson (1986) have shown that optimal debt contracts are simple debt contracts where borrowers repay a fixed interest rate whenever possible and lenders seize all the profit when borrowers default. In this note, we depart from their works by assuming that borrowers and lenders have heterogeneous beliefs, and show that simple debt contracts do not necessarily survive as optimal contracts.

Racial disparities in bank-specific mortgage lending models

We consider several methods of combining estimates of unexplained racial disparities in regulatory models of mortgage lending. Although models for individual banks do not provide statistically significant evidence of discrimination, effects for blacks are statistically and economically significant when combining data.

Structure-pricing linkages among singlemarket banks, controlling for credit quality

Structure-pricing linkages are estimated for single-market banks, to measure structure and pricing more accurately. Loan loss ratios are controlled for predicted to be important by information-theoretic models of lending. A strong structure-pricing linkage is found.