Non-bank Financial Institutions Research Articles

INSTITUTIONAL AND SEGMENTAL ASPECTS OF UKRAINE’S FINANCIAL MARKET DIGITALIZATION

The article deals with the development analysis of certain segments of Ukraine’s financial market in the context of digitalization processes. The positions of modern foreign and domestic scientists regarding the digitalization impact on economic and financial relations are outlined. The key disproportions of the financial market at the institutional and segmental levels are highlighted. In particular, at the institutional level – the long-term and unchallenged dominance of banks over non-banking financial institutions; absence or minimal development of certain types of financial institutions; weakness of stock exchanges and exchange infrastructure in general; low level of financial inclusion. At the segmental level – imbalances in the lending market development, insufficient volume of the corporate securities market; weakness of leasing lending segments, factoring services, etc. It is argued that in the post-war reconstruction of Ukraine, the financial market should become an effective mechanism for the distribution of capital, therefore it is important to conceptually change the emphasis in its development on the digital technologies basis. It has been established that nowadays, the participants of various segments of the financial market are adapting their own strategies to the digital economy’s requirements. However, the degree of such adaptation and digitization level of certain segments of the financial market of Ukraine differ significantly. These disparities largely determine the strategic prospects of various segments of the domestic financial market. A similar conclusion was made regarding the digitalization strategy of financial institutions in Ukraine. For many financial institutions, the digitization of operations has become one of the important competitive advantages, but there are other approaches – in particular, in terms of digital technologies’ use for unfair competition and systemic violations of the rights of investors and consumers of financial services.

THE CONTRIBUTION OF ISLAMIC CAPITAL MARKET AND ISLAMIC INSURANCE TO INCLUSIVE ECONOMIC DEVELOPMENT IN INDONESIA

The study aims to identify the contribution of some Islamic financial instruments from Islamic capital markets and Islamic non-bank financial institutions to inclusive economic development in Indonesia. While some studies have examined the contribution of some Islamic financial instruments to a single measure of economic indicators, this study tries to fill the gap in the context of multi indicators to explain economic development, so the authors propose an inclusive economic development index that consists of 21 indicators. This study employed a quantitative research method using secondary data from 2011-2020 from several sources (Financial Service Authority, the Ministry of Finance Republic Indonesia, and the Ministry of National Development Planning (BAPPENAS)). The main variables used are the Jakarta Islamic Index (JII) market capitalization, total outstanding Sukuk, Islamic insurance total claim, and inclusive economic development index. The research data is analyzed using multiple regression linear models. The result found that only the total outstanding Sukuk significantly impacted inclusive economic development. In contrast, the others variables are insignificant.

Is Macroprudential Policy Instrument Blunt? Empirical Analysis Based on Japan's Experience from the 1970s to the 1990s

AbstractMacroprudential instruments, especially sectoral instruments, are considered to be precise tools that work only in areas of concern. However, it has not yet been fully tested in practice whether they affect only the targeted sectors and do not have undesirable spillover effects on nontargeted sectors. To fill this gap, we empirically study the impact of an instrument called Quantitative Restriction (QR), a policy tool used in Japan in the 1990s to curb excessive land price rises by requiring banks to contain real estate lending. We use narrative records to construct QR shocks and estimate their impact using a factor‐augmented vector autoregression (FAVAR). Our findings are summarized as follows. First, contractionary QR shocks reduced not only real estate lending and land prices, but also lending to other industries, putting downward pressure on the macroeconomy and lowering bank solvency. Second, industry groups and banks with balance sheets that were more exposed to changes in land prices and real estate transactions responded greater to these shocks, illustrating the role of balance sheet composition in spillovers and the importance of choosing the right timing for implementation following these shocks, suggesting that there may have been leakages through these institutions. Third, some nonbank financial institutions that were not required to report the loan results to the authorities did not reduce their lending following these shocks, which accords with the view that there were leakages through these institutions.

Various Sources Working Capital Financing For The Sustainability Micro, Small And Medium Enterprises (MSMEs) Business In Rancabungur-Bogor

Micro, Small and Medium Enterprises (MSMEs) are the object of community service activities, which are located in the Rancabungur area, West Java. Small, Micro and Medium Enterprises (MSMEs) businesses need to understand various alternative sources of working capital financing, so that it is hoped that micro, small and medium enterprises (MSMEs) can find solutions to financing working capital within the framework of development and maintenance of the business in order to continue to be sustainable. The purpose of this community service activity is to provide training for micro, small and medium enterprises (MSMEs) to get various alternative sources of financing both from commercial banks/Islamic banks or from non-bank financial institutions. For this reason, activities team community service Universitas Mercu Buana Jakarta with the topic: “MSMEs Management Development of Achieve Business Sustainability Viewed from Various Management Perspectives (Marketing, Finance, Human Resources, and Operation)”

CONCEPT AND CLASSIFICATION OF NON-BANKING FINANCIAL INSTITUTIONS

The purpose of this article is to define the concept and classification of non-bank financial institutions. Subject of the research – concept and classification of non-bank financial institutions. The concept of a non-banking financial institution is presented; the characteristics of a financial institution are defined; the classification of non-banking financial institutions has been carried out; the classification of financial intermediaries has been carried out; the concept of investment funds is defined; the classification of NFIs by lending method has been carried out; the functions performed by financial intermediaries between creditor and borrower are defined; the concept of a credit union is presented. Credit unions are a relatively new and under-studied type of financial institution. Looking at them in the context of the system of subjects of administrative law, it should be noted that they occupy a special place because, thanks to them and their activities, the state in a certain way performs its functions and tasks. Credit unions do not exist in a legal vacuum, they are not completely separated from the state, they are not subject to regulation by only one branch of the law, nor are they the subject of research in only one branch of the law. Credit unions are in constant close interaction with the state, its bodies, systematically feel its influence or the influence of the legal and political processes taking place in the state. Methodology – the article uses general scientific methods of formal logic (analysis, synthesis, deduction, induction, analogy, abstraction and modelling). Results. The concept of a non-banking financial institution is defined – as a legal entity that is not a bank, has a special legal status of a financial intermediary, is registered in the Unified State Register of Financial Institutions on the basis of a licence issued by the National Bank of Ukraine, provides one or more financial services in the markets of insurance, credit cooperatives, accumulating pension funds, attracting investments from business entities and the population; has been classified as a non-banking financial institution; has demonstrated that important elements of the system of administrative and legal regulation and supervision are in place: requirements for reporting by NFIs, conducting scheduled and unscheduled inspections of their activities and ensuring compliance with legal requirements, in particular by applying certain influence measures in case of detection of violations of legislation.

Upaya Pengentasan Kemiskinan Melalui Lembaga Keuangan Syariah Di Provinsi Sumatera Selatan

Poverty is a problem in various countries around the world that makes their governments look for solutions to alleviate the ruins. In the Islamic economy there are tools that can deal with the problem of poverty, namely through the distribution of zakat and capital development through Islamic bank and non-bank financial institutions. South Sumatra has 97.17% of the population who adhere to the Muslim religion, it should be able to have a positive impact on alleviating poverty locally and nationally. The biggest thing that caused chaos to increase in South Sumatra was the occurrence of a comprehensive disaster in various countries, namely COVID 19 which changed new conditions where people had to be able to adapt. Distribution of zakat and business development through BMT is one way out to minimize this poverty.

DE-SHADOWING OF THE ECONOMY IN THE FIELD OF NON-BANK FINANCIAL INSTITUTIONS

The purpose of the article is to define the de-shadowing of the economy in the sphere of non-bank financial institutions. The author presents the peculiarities of the domestic shadow economy and defines the concept of the shadow economy in the non-banking financial sector, identifies the components of the shadow economy, and proposes measures to overcome shadow economic processes. Subject of the research – de-shadowing economy in the sphere of activities of non-banking financial institutions. The shadow economy in the NFI is a complex socio-economic phenomenon, which is presented as a set of uncontrolled and unregulated, both illegal and legal, but immoral financial and economic relations in the sphere of activity of the NFI, which are in conflict with the legislation in force and are characterised by deliberate illegal acts of individuals, committed with the aim of concealing their income from the state and its bodies, making profits, evading taxes, etc. The shadow economy has three components: the informal, the hidden and the underground (criminal) economy. The informal economy is characterised by unregulated production of goods and provision of services; the hidden economy is the legal production and sale of unregistered goods and services; the underground (criminal) economy – prohibited activities (corruption, drug trafficking, etc.). Methodology – the article uses general scientific methods of formal logic (analysis, synthesis, deduction, induction, analogy, abstraction and modeling). It should be noted that the content analysis method made it possible to determine the influence of the shadow economy on the commission of violations in the field of activity of NFIs, to show in a qualitative and quantitative ratio, in general, the trends in the level of spread of violations in their activities. Results. The definition of the concept of the shadow economy in the non-banking financial sphere is given – it is a complex socio-economic phenomenon, which is a set of uncontrolled and unregulated, both illegal and legal, but immoral financial and economic relations in the sphere of activity of NFIs, which are in conflict with the legislation in force and are characterised by deliberate illegal actions of persons with the purpose of concealing their income from the state and its bodies, making profits, evading taxes, etc.; the components of the shadow economy are defined; it has been proved that Ukraine has a fairly extensive shadow economy in its economy, which actually serves as the basis of the country's entire financial policy. The NBU acts as a state regulator of social relations arising during the conduct of economic activities related to finance (public or private).

Categorical Modeling of Determinants of Financial Inclusion and Financial Literacy of Women MSMEs in Pacitan

Preliminary research data prior to the Covid-19 pandemic, namely that 150 women MSME had unique characteristics in terms of sociodemographic factors and levels of financial literacy and inclusion. It can be empirically proven that these three variables will have an important role in each other through the multiInomial logit categorical equation model according to the Bayar et al. research procedure. al. (2020). The important result to be achieved is that the researchers want to prove the business potential of women SMEs in Pacitan, which so far has not been exposed to BI UMKM as a common market place for all SMEs in Indonesia. There is a stigma that the low financial literacy and inclusion (OJK) score of MSME actors is a negative effect of less exposure to the business potential of MSME actors in the local area. The results of this study succeeded in describing the sociodemographic profile of women MSME in Pacitan with several characteristics, namely the dominance of having a productive age of 40-55 years, the majority having high school education; have a turnover of over 10 million per month and most of them have used access to bank and non-bank financial institutions, usually pawnshops for storage and credit applications. Furthermore, this study succeeded in proposing a categorical equation model with multinomial logistic regression through STATA 13.0 software on the three attributes of low, medium and high financial literacy and inclusion referring to the research model from Bayar et.al. (2020) and managed to find that the sociodemographic variable of age is always a determining factor in each model panel. The implication is that individually, women MSME actors with high financial literacy can make financial decisions more quickly than just participating in mentoring or the community in such area.

MODERN TRENDS OF DEVELOPMENT OF THE INSURANCE MARKET OF UKRAINE UNDER CONDITIONS OF IMPROVING PROFESSIONAL RESPONSIBILITY

The article is aimed at identifying the main trends in the development of the insurance market in Ukraine in the context of increasing professional responsibility. It has been substantiated that legislation and strategic documents on the organization of activities and insurance in Ukraine are the main prerequisites for the development of such a market. The dynamics of changes in the number of banks, non-bank financial institutions and insurance companies in Ukraine and the volume of their assets over the past three years has been analyzed. Based on the analysis of the structure of the insurance market, the most common types of insurance portfolio have been identified. It is noted that special attention on the part of insurance is required for various types of professional activities, which are rapidly developing in the context of digitalization of activities, informatization, convergence and uncertainty, which is due to the growth of risks of unintentional mistakes or negligence of employees of the organization, as a result of which harm may be caused to life and health, property and property interests of clients or business partners. The foreign experience in the development of insurance liability of medical workers is considered, which made it possible to substantiate the need for the development of protective medicine relations in Ukraine, taking into account the experience of other countries to increase the economic stability of cranes and the safety of members of the economic community.

Peran Dakwah Ekonomi Syariah dalam Pemberantasan Riba (Studi Kasus Bank Muamalat Indonesia)

Bank Muamalat is a pioneer of Islamic banking. With the existence of Bank Muamalat, other Islamic banks are now mushrooming. Besides that, Islamic banks promise to create economic stability.
 Islamic banks are one of the avengers of punishment from Allah SWT for perpetrators of usury eating, and Islamic banks always invite people to stay away from eating usury. So avoid punishment.
 Bank Muamalat always tries to be at the forefront of eradicating usury through its sharia banking. Bank Muamalat facilitates office space by building places of worship, such as small prayer rooms whose capacity is used according to the number of employees. Ordaining Islamic law not only limited to the problem of restricting usury, but it will always try to also adhere to other Islamic teachings, such as inviting employees to pray in the congregation when they are in the office, as well as temporarily closing office activities during prayer hours, such as at midday and midday prayers.
 The impact of Da'wah in the field of Islamic Economics at Bank Muamalat can be felt today. With the Islamic economic approach as a medium of da'wah run by Bank Muamalat as a pioneer in Indonesia, we can see the spread of the Islamic system in various bank and non-bank financial institutions so that people can choose a service model. the services needed, whether banking, leasing, insurance, cooperatives, all exist with operational principles and sharia services.
 Indicators of the role of Islamic economic da'wah in eradicating usury with the rise of bank and non-bank financial institutions, businesses, and sharia markets show that the influence of the sharia system has developed and grown widely in the people of the nation and state of Indonesia, so that it can be interpreted as the contribution of da'wah in eradicating usury has provided benefits to the Muslim community in particular, and the Indonesian people in general.
 The contribution of the Islamic economy in eradicating usury by being the oldest bank that carries sharia principles, bank Muamalat has set an example for the Indonesian nation, how an Islamic financial institution whose work was doubtful at first, can survive decades and continue to grow to this day. To build an economy and finance based on Islamic religious law.

The Effects of Service Quality Performance on Customer Satisfaction for Non-Banking Financial Institutions in an Emerging Economy

This study aims to explore the effects of service-quality dimensions on the customer satisfaction of non-banking financial institutions in an emerging economy by adopting the renowned SERVPERF model. To verify the proposed model, data was collected from thirteen non-banking financial institutions in Bangladesh using a questionnaire survey with a purposive random sampling method. Through the Smart PLS 2 software, the partial least squares structural equation modelling approach was used to analyze the collected data. Research findings reveal that, among the six dimensions of the revised SERVPERF model, assurance, reliability, responsiveness and tangibility have significant effects on customer satisfaction, but accessibility and empathy do not for the non-banking financial institutions in Bangladesh. According to the research results, implications and suggestions have been discussed for non-banking financial institution managers.

The Measurement of SMEs Perception and Awareness in Banten Province, Indonesia

The research aims to study about the awareness and perceptions of the SMEs palm sugar in Lebak district, Banten Province-Indonesia on Fintech model such as Peer-to-Peer lending and crowd funding in developing their business. The researchers designed as many as 17 questions to conduct a survey related to the research variable. Descriptive analysis is applied by using Microsoft Office Excel data processing. Frequency distribution and central size are used for data analysis. The results show that awareness level of the most respondents is still insufficient on Peer-to-Peer lending and crowd funding as alternative financing instruments. The majority of them have a positive perception of FinTech development. It can be concluded that the level of awareness of most respondents is still very limited, especially on P2P loans, Crowdfunding and other FinTech services provided by non-bank financial institutions. They need to increase awareness level of palm sugar SMEs by related parties such as the government.

Determinants of efficiency of non-bank financial institutions: an empirical evidence from Bangladesh

PurposeThe purpose of this study is to evaluate the effect of some internal features that influence the efficiency of non-bank financial institutions (NBFIs) in Bangladesh.Design/methodology/approachThe study selected the top 15 Dhaka Stock Exchange (DSE)-listed NBFIs according to purposive sampling. The study period was from 2016 to 2020. Secondary data were collected from annual reports. The cost-to-income ratio was a dependent variable that was used as a proxy of operational efficiency. The ordinary least square regression technique was applied to measure the impact of firm-specific factors on efficiency.FindingsResults showed that number of employees, branch number, firm size and deposit ratio have a significant effect on efficiency at 5% level. The number of branches and employees showed a negative impact, whereas firm size and deposit ratio showed a positive effect on the firms' efficiency. The deposit ratio is negatively related because deposit interest expenses were more than offset by interest income generation through the conversion of deposits into loans.Practical implicationsThe study has practical and policy implications on NBFIs' managers, employees, shareholders, depositors, clients, regulatory authorities and government as efficiency enhancement would bring financial soundness.Originality/valueThis study shed light on some firm-specific factors that can be changed to increase operational efficiency or reduce the cost-to-income ratio. The novelty of the study is that it identified some significant associations between firm-specific factors and the operational efficiency of NBFIs.

Kelayakan Kekayaan Intelektual Sebagai Agunan Pembiayaan

Creative economic growth as the basis for national economic growth must be supported by various parties. Intellectual property as a result of creative economic actors needs to be developed through added value in order to provide greater economic benefits. The government has issued regulations on the creative economy and its implementing regulations. The hope is that it will provide a strong foundation for the parties to support the development of the creative economy. The purpose of this study was to determine the feasibility of financing the creative economy with intellectual property guarantees. This research is a qualitative descriptive study using a normative juridical method by examining several legal rules that support the theme of this research. The results of the study show that intellectual property as a source of income for creative economy actors, in its implementation is still not optimal to be used as collateral for bank and non-bank financial institutions, in order to help finance the creative economy. The main obstacle is related to the issue of valuation of intellectual property rights, where it is still necessary to have several parties who have the competence to carry out the valuation. The community does not yet have an adequate understanding of intellectual property as collateral for credit/financing, therefore a continuous education program is needed in the future..

Law Enforcement of the Financial Services Authority against Customer Rights on Fraudulent Promissory Notes Issued by Non-Bank Financial Institutions

The development of the economy in Indonesia requires large funds so that it is necessary to provide facilities for the provision of funds needed by the community, so that the creation of financial institutions, one of which is a non-bank financial institution. Non-Bank Financial Institutions are business entities in the financial sector that are allowed to collect and distribute funds to the public but not in the form of savings, demand deposits or time deposits. Promissory Notes are commercial securities that are regulated by law, in this case a non-bank financial institution that issues promissory notes as a means of transaction must obtain permission from financial institutions, namely the Financial Services Authority and Bank Indonesia. Based on the background of the problems above that have been explained, the issue that will be raised is how is Law Enforcement from the Financial Services Authority against fraudulent promissory note customers from Non-Bank Financial Institutions that do not have a license. The method used is normative juridical which is carried out to obtain the necessary legal materials related to the object of research. The results of this study are based on the Financial Services Authority Regulation Number 35/POJK.05/2018 concerning Conducting a Financing Company Business spurring the growth of the performance of the financing industry which is considered not optimal.

The Effect of Firm Size on Financial Performance of Firm: Evidence from the Non-bank Financial Institutions of Bangladesh

This paper intends to find out the effect of the factors determining the firm’s size on the financial performance of a firm. Non-bank Financial Institutions (NBFIs) play a predominant role as a supplement to the banks by providing financial aid to society. The positive financial growth of the NBFIs certainly attaches value to the economic growth of any country. That’s why the article endeavors to investigate whether size has an impact on the profitability of the NBFIs of Bangladesh. To conduct the analysis, relevant data from all the non-bank financial institutions listed on Dhaka Stock Exchange (DSE) have been taken from the year 2012 to 2021. Pooled OLS regression has been used to find out the relationship between financial performance measured by Return on Asset (ROA) and Return on Equity (ROE) and the factors determining the size of a company (total asset, total sales, number of employees, number of branches) and some other profitability determining factors (age of a firm, and percentage of independent director of a firm). According to the analysis, a firm’s size-specific factors have a positive impact on the profitability of a firm. Keywords: size, ROA, ROE, profitability, total asset, total sales, non-bank financial institutions. DOI: 10.7176/RJFA/14-4-04 Publication date: February 28 th 2023

Pengaruh Kebijakan Countercyclical Yang Dikeluarkan Oleh Otoritas Jasa Keuangan Akibat Penyebaran Covid-19

The covid-19 pandemic has had an impact on the global economic downturn in all types of economic business, including insurance in Indonesia. The purpose of this study was to analyze the effect of countercyclical policies issued by the Financial Services Authority due to the spread of covid-19. The method used is normative juridical which is descriptive analytical by describing the implementation and problems surrounding the effect of countercyclical policies issued by the Financial Services Authority due to the spread of covid-19. Covid-19 has had an impact on Indonesian insurance. The Financial Services Authority issues countercyclical policies for non-bank financial institutions through Letter Number S-11/D.05/2020 concerning Countercyclical Policies for the Impact of the Spread of Covid-19 for Insurance Companies. The issuance of this rule by the Financial Services Authority will affect the parties in the insurance agreement, namely the insured and the insurer.

Edukasi Financial Ilegal Dalam Bentuk Pinjaman Online dan Investasi Online Berdasarkan Penilaian Otoritas Jasa Keuangan (OJK) Pada Koperasi Kelompok Wanita Tani “Melati Jaya” Kelurahan Sukamenanti Baaru Kecamatan Kedaton Kota Bandar Lampung

Currently, Fintech does not only enter Banking Financial Institutions, but also Non-Bank Financial Institutions. This can be seen in Financial Technology products circulating on social media, namely online loans and online investments. This condition actually provides convenience to the community, but there is also a negative impact, namely people who are trapped in online loans and online investments. There are many findings of online loan products and illegal online investments, this creates unrest in the community. Therefore, there is a need for education regarding illegal online loans and illegal online investments in collaboration with the Financial Services Authority (OJK) so that the public, especially mothers, are more careful in choosing to use online loan services and online investment. The method we use in this PkM activity is to provide education to participants regarding illegal online loan products and illegal online investments based on the assessment of the Financial Services Authority (OJK). The purpose of this PkM activity is to provide education regarding illegal online loan products and illegal online investments based on the assessment of the Financial Services Authority (OJK) so that they are more careful in choosing online loan services and online investments. The object of this PkM activity is the Women Farmers Group "Melati Jaya" Sukamenanti Baru Village, Kedaton District, Bandar Lampung City.

The effect of psychological contract breaches and self-efficacy on employee performance

PT Pegadaian (Persero) Lampung Area is a non-banking financial institution that provides credit to the public on mortgage laws in Indonesia. Psychological contract breaches are problems often found in companies where employees feel that the company violates promises made to contracts. In addition, employees' self-confidence level can influence the level of sound performance or vice versa. Performance appraisal is carried out transparently and objectively to see and evaluate employee performance. At the beginning of each financial year, PT Pegadaian (Persero) Lampung sets a Key Performance Indicator (KPI) for each work unit. The purpose of this study was to find out whether Psychological contract breaches and self-efficacy have a partial effect on employee performance at PT Pegadaian (Persero) Lampung area. Methods of data collection is using primary data. For the data analysis, we used simple linear regression and t-test; using the help of IBM SPSS version 25 software. The sample in this study was 125 respondents with a probability sampling technique and a simple random sampling method. The results of this study support the hypothesis that psychological contract breaches have a negative and significant effect on employee performance, and self-efficacy has a significant positive effect on employee performance at PT Pegadaian (Persero) Lampung Area.

Does corporate governance quality improve credit ratings of financial institutions? Evidence from ownership and board structure

PurposeThe purpose of this paper is to examine to which extent ownership and board structure improve financial institutions’ credit ratings.Design/methodology/approachOrdered Probit regression models were used to examine the association between corporate governance attributes and banks’ credit ratings. The sample consists of 97 publicly traded financial institutions on Gulf Cooperation Council (GCC) stock exchange markets and cover the period 2010–2019. All GCC countries were considered in this study which are United Arab Emirates, Saudi Arabia, Bahrain, Oman, Kuwait and Qatar.FindingsThe results show that banks’ credit ratings are positively associated with the size of the board of directors and with the number of female directors serving in the board of directors. And it is negatively associated with the frequency of board meetings. Furthermore, this study finds evidence that nonbank financial institutions’ credit ratings are positively associated with CEO duality and with frequency of board meetings. Also, this study shows that their credit ratings are negatively associated with the ownership percentage held by the major five shareholders and with the number of board members serving in the board of directors.Originality/valueUnlike previous research, this study focuses on the effect of the role of two different corporate governance dimensions, namely, ownership and board structure on the rating of financial institutions. This paper contributes to the extant literature in various ways. It bridges the gap of this topic in the GCC region. And, unlike previous research, this study focused on the financial sector and divided the sample into banks and other financial institutions to examine both subsamples separately. Also, this study introduced new ownership and board structure variables for the purpose of investigating the impact of corporate governance on financial institutions’ credit ratings such as the presence of women in the board of directors.