Loan Recipients Research Articles

Poverty Reduction and Female loan Recipients: Comparing Non-Profit vs. For-Profit Microcredit Programs’ Supplemental Services

Poverty Reduction and Female loan Recipients: Comparing Non-Profit vs. For-Profit Microcredit Programs’ Supplemental Services

The impact of USDA’s business and industry loan guarantee program on tax revenue in Oklahoma communities

ABSTRACT Many public-sector programs are focused on economic development in rural areas, but few are formally evaluated. One often-overlooked component of effective rural development is the generation of local sales tax revenue, which helps fund city amenities and services. This paper evaluates whether the United States Department of Agriculture’s (USDA) Business and Industry (B&I) Loan Guarantee program impacted sales tax revenue for recipient Oklahoma communities. Sales tax revenue and demographic/business data for all Oklahoma communities that charged a sales tax between 2005 and 2015 are meshed with information on B&I loan recipients during that time. Coarsened exact matching (CEM) and multivariate regression techniques are then used to assess impacts on local sales tax revenues. The results demonstrate that the B&I program had a positive impact on total retail sales per capita over the full period, and that the effects were evident in recessionary but not expansionary periods. The evidence suggests that the B&I program can improve the financial health of recipient communities, and that their impacts are likely larger during economic downturns when tax revenue is even more vital for rural communities.

Impact of Race and Gender on the SBA Paycheck Protection Program (PPP) Loan Amounts

The Paycheck Protection Program (PPP) helped to preserve employment relationships during thesudden shutdown of economic activity due to the Covid-19 pandemic. In this paper, we analyzeaccess of the minority and women-owned businesses to PPP loans. Our quantitative results showthat a minority-owned business with 5 to 9 employees received a 21% smaller PPP loan thantheir white-owned business counterpart. A women-owned small business with 5 to 9 employeesreceived a 15% smaller PPP loan than a male-owned business. Using Lee bounds, we found thatwomen-owned businesses in rural counties received $2,634 and $8,856 smaller PPP loans thanthose in urban counties. From the interviews with PPP loan recipients in Northeast Ohio, welearned that businesses that received smaller loan amounts had more difficulty with the loanapplication process compared to businesses that received larger loans. The discrepancy in PPPloans to women- and minority-owned businesses may have stemmed from a lack of access andknowledge about the program itself.

They Do It Anyway: Detecting Indirect Evergreening

We identify a novel way of evergreening loans where a low-quality bank lends to a related party of an insolvent borrower, and the loan recipient transfers the funds to the insolvent borrower using internal capital markets. Internal capital market transactions, incremental investments, interest rates charged, and loan delinquency rates collectively indicate evergreening. These loans are unlikely to represent arm's length transactions or rescue of troubled related firms by stronger firms to prevent group-wide spillover effects. Indirect evergreening is less likely to be detected by regulatory audits. It has significant real consequences at the firm and industry levels.

PERLINDUNGAN HUKUM BAGI PEMBERI PINJAMAN ATAS RISIKO KREDIT DALAM PELAKSANAAN PINJAM MEMINJAM UANG BERBASIS TEKNOLOGI INFORMASI (PEER TO PEER LENDING)

The fastest growing financial technology (fintech) in Indonesia is peer to peer lending, where customers could obtain loans in a simple, easy, and fast way, yet without collateral. However, in practice, peer to peer lending has a very high credit risk because the ability of fintech companies in assessing prospective loan recipients is not as good as other financial institutions. Therefore, preventive and repressive legal protection are needed, especially for lenders, which are regulated in OJK Regulation Number 77/POJK.01/2016 concerning the Implementation of Information Technology-Based Lending and Borrowing and OJK Regulation Number 1/POJK.07/2013 concerning Consumers’ Protection in Financial Services Sector. With the two OJK Regulations, lenders have received sufficient legal protection, but it must be further strengthened, especially in terms of credit risk mitigation.Keywords: Legal Protection for Lenders, Peer To Peer Lending, Credit Risk

Perlindungan Hukum Terhadap Pihak Pemberi Pinjaman Akibat Terjadinya Gagal Bayar pada Peer to Peer Lending

The digital world has developed very rapidly and has had a lot of influence in various sectors, one of which is the presence of information technology-based lending and borrowing services, namely Peer to Peer Lending. However, it is possible that the implementation of Peer to Peer Lending carries a risk of a legal problem, namely the default from the Loan Recipient which will harm the Lender who funds the loan application on the Operator's platform. In this regard, the next study aims to identify and analyze legal protection for lenders related to the risk of default in peer to peer lending based lending services. In addition, this study also aims to explain dispute resolution due to default in peer to peer lending. The research method used in this research is normative legal research method. Legal protection for lenders with the formation of special regulations that provide protection for Peer to Peer Lending service users, namely the Financial Services Authority Regulation Number 77 / POJK.01 / 2016 in particular Article 37 and sanctions such as fines, imprisonment, and other additional penalties given after it occurs dispute. Settlement of disputes due to default in P2PL can be carried out outside or inside the court in accordance with Article 39 paragraph (1) POJK Number 1/POJK.07 / 2013.

Impact of the Paycheck Protection Program on dermatology practices during the COVID-19 pandemic

Impact of the Paycheck Protection Program on dermatology practices during the COVID-19 pandemic

THE EFFECTS OF PUBLIC R&D SUBSIDIZED LOANS ON FIRMS’ R&D OUTPUTS: EVIDENCE FROM CHINA

R&D subsidized loans (tiexi daikuan) is an effective market-driven solution to promote firms’ R&D outputs, including patent applications and new product sales, in China. However, empirical examination on the effects of subsidized loans is insufficient. Using a panel data of manufacturing firms of Jiangsu Province from 2010 to 2014, the study investigates the effects of R&D subsidized loans on firms’ R&D outputs in comparison to that of the direct R&D grants. The results show that R&D subsidized loan recipients significantly outperform those who only receive direct grants in terms of new product sales. Meanwhile, subsidized loans inhibit the recipients’ exploratory patent applications and discourage R&D activities with higher risks. This study contributes to R&D subsidy literature and extends the knowledge in the roles of different types of public sponsorships on firms’ innovation.

Bank Liquidity Provision Across the Firm Size Distribution

We use supervisory loan-level data to document that small firms (SMEs) obtain shorter maturity credit lines than large firms; post more collateral; have higher utilization rates; and pay higher spreads. We rationalize these facts as the equilibrium outcome of a trade-off between lender commitment and discretion. Using the COVID recession, we test the prediction that SMEs are subject to greater lender discretion. Consistent with this hypothesis, SMEs did not drawdown in contrast to large firms, even in response to similar demand shocks. PPP recipients reduced non-PPP loan balances, indicating the program bolstered their liquidity and alleviated the shortfall.

Credit Risk Management in Financial Institution: Comparative Study in Islamic and Conventional Banking

Credit and financing problems at conventional banks and Islamic banks are related to how businesses that have been financed by banks can be run, whether the loan recipient has actually run the business as stated in the contract or the business manager has been denied. The purpose of this study was to determine the differences in Non-Performing Loans in conventional banks and Non-Performing Financing of Islamic banks. Hypothesis testing techniques in this study used the first two choices of independent sample t-test if the data were normally distributed so the classical assumptions were tested first to ensure that the data used by researchers had a normal distribution and if the data were not normally distributed will use the Mann Whitney test to test the difference between Non Performing Loans and Non Performing Financing in Islamic commercial banks and conventional banks.. So the results of this study indicate that there are differences between PT. Bank Mandiri and NPF of PT Bank Syariah Mandiri, or it can be said there is a difference between ratios that indicate the ability of bank management in managing loans or financing problems provided by PT. Bank Mandiri and PT Bank Syariah Mandiri.

Stock market illiquidity, bargaining power and the cost of borrowing

Abstract We show that firms with illiquid stock have higher syndicated loan spreads. This result is invariant to measurement of stock illiquidity, and is robust to a wide set of cross-sectional loan and firm features, firm and time fixed effects. It also holds using a matched difference-in-differences estimator, at an exogenous reduction in the minimum tick size of major United States exchanges, and using a two-stage least squares estimator. Stock illiquidity is shown to increase spreads more when a lead lender has a high market share or a borrower has a low credit rating. It increases spreads less when a borrower has public rated debt and it diminishes the benefit to the loan recipient of a lending relationship. Measurements of stock price informativeness and firm-level governance do not affect the stock illiquidity and loan spread relation. A rationale for these findings is that stock illiquidity impairs the bargaining power of corporate borrowers, in negotiating a loan rate, as it raises the cost of alternatively raising funds by issuing equity.

How Trainees Finance Their Medical Education: Implications of Higher Education Act Reform.

The Public Service Loan Forgiveness (PSLF) program is among several repayment programs currently available for recipients of federal student loans. Medical education debt has continued to expand at a rapid pace in the decade since PSLF was created. Proposed changes to the Higher Education Act would substantially transform how future medical trainees finance and repay medical education debt. To better understand relationships between debt and personal stress, as well as between repayment- and forgiveness-program use, in the context of competing legislation. Surveys were sent to all Accreditation Council for Graduate Medical Education-accredited internal medicine residency programs (osteopathic and allopathic). From a potential pool of 579 residents, data were obtained from 403 unique respondents (response rate, 69.6%) at 12 residency programs, for a program response rate of 2.2%. Of these respondents, 290 (71.9%) completed the demographic portion of the survey. Median education debt was $225,000. Residents with the top quartile of debt burden were more likely to use PSLF (odds ratio [OR], 3.27; P=.02), more likely to enter loan forbearance (OR, 2.14; P=.03), and indicated a higher level of stress (OR, 5.94; P<.001) compared with those in the second and third quartiles. Proposed legislative changes to the Higher Education Act would scale back loan repayment options and also eliminate PSLF for future borrowers. Our data suggest that higher debt burdens are associated with increased debt-related stress. Given program popularity and growing use, along with growing concerns of physician burnout, policy makers should weigh the potential downstream effects of policy change on prospective future physicians.

FACTORS INFLUENCING THE INTENTION OF STATE FOUNDATION LOAN RECIPIENTS TO PAYBACK THE EDUCATION LOAN

The issues of loan repayment are still existing until today. One of the state foundations has reported the number of recipients that has not paid their loan are higher than the recipient who has done the repayment. Therefore, the main objective of this study is focusing on the factors that influences the recipient to pay back the loan. 48 questionnaires were distributed to the state foundation’s loan recipients and a small interview were also conducted. Findings showed that the respondents had the intention to repay their loan as they were aware of their responsibilities especially the recipient that have high integrity. However, the inability to secure a good paying job is one of the reasons why they are not able to do so. Parental influence was found to be significant in influencing the loan recipients to repay their loan. It is suggested that the state foundation should increase the sense of responsibility among loan recipients to pay their loan and reminders should be given to their parents in order to convince their children to repay the loan.

A Case of Capability Expansion or Capability Reduction? An Exploration of Loan Recipients’ Views of ICETEX: Colombia’s Higher Education Student Loans Institute

A government-established student loans institute known as Instituto Colombiano de Credito Educativo y Estudios Tecnicos en el Exterior (ICETEX) has been instrumental in improving access to higher education in Colombia. This article uses the capability approach to analyze the ways in which ICETEX has contributed to loan recipients’ well-being and identify which capabilities loan recipients have reason to value. Evidence from qualitative interviews with eight participants reveals that, due to an intersecting set of conversion factors and capabilities, ICETEX both enables and constrains participants’ capabilities.

The Principle of Pacta Sunt Servanda in Fintech Transactions is Reviewed Through The Perspective of Ushul Fiqh

The principle of Pacta Sunt Servanda as part of the legal principle, which is commonly described as "agreement as applicable to the author" carries its own implications in the practice of society, where the public must perform the agreement c onsistently, consequent , and full of responsibility. No exception in transactions in Financial Technology (Fintech), the applicability of this principle to be a reference for both parties to equally believe that the transaction process (lending) between them can be held accountable in terms of m oral-ethical laws. The purpose of this research is to describe the validity of the p acta s unt s ervanda of the agreement on Fintech and describe the p acta s unt s ervanda basis reviewed through the study of u s h ul fiqh to soften a concrete solution against l egal problematics that exist on Fintech. The methods used in this study are juridical-normative. The results of the research show that with the trend of ease carried by the Fintech can erode the essence of the principle of the law itself, and create a destructive mindset which is an agreement of the r egarded as administrative terms that need to be met when conducting transactions on Fintech, so that various provisions inherent to the unreached F intech agreements. In addition to the absence of strict supervision in the process of F intech transactions facilitate the occurrence of fraud against the initial purpose of granting Fintech funds by the loan recipients.

Role of Gambling in Payback Failure in Consumer Credit-Data from a Large Body of Material Regarding Consumer Loan Recipients in Sweden.

Indebtedness is associated with poor health outcomes, and problem gambling may contribute to indebtedness through consumer credits related to gambling expenses. The assessment of consumers’ applications for loans may be an opportunity to detect and prevent further problem gambling. The present study analyzed a number of variables including gambling-related transactions and their association with payback failure in 48,197 loans to 20,750 individuals in Sweden. Sums and frequency of gambling deposits or withdrawals generally did not predict failure to pay back loans. Instead, having a loan defaulted at some time was associated with a baseline pattern describing a theoretical loss-of-control gambling pattern (short-term intense gambling), with a higher ratio of gambling deposits or withdrawals per occasion, and with several instances of gambling in close association with a loan. While several group differences were modest, signs of rapid, short-term and intense gambling, rather than gambling itself, may identify risk of payback failure and risk of indebtedness. Implications for early problem-gambling detection and prevention, such as by gambling operators and financial institutes, are discussed and may promote better public health in relation to gambling indebtedness.

Financial integration and credit democratization: Linking banking deregulation to economic growth

We use a matching method that constructs synthetic counterfactual states to identify the channels that link bank deregulation to financial integration, and thereby to economic growth. We document a positive, but conditional, effect of financial integration on economic growth. We explore the heterogeneous effects of financial integration across states depending on the capital mobility in each state. Our results reveal a correlation between financial integration and subsequent banking sector changes related to an expansion in loan recipients. We show that financial integration democratizes lending and spurs economic growth.

PENENTUAN PENERIMA PINJAMAN KOPERASI MEKAR SURYA KARANGANYAR MENGGUNAKAN METODE TECHNIQUE FOR ORDER PREFERENCE BY SIMILARITY OF IDEAL SOLUTION (TOPSIS)

ABSTRACTThe problems arise in the form of less objective decision-making and require a long time for selection and there is no computerized system that supports the prioritization of loan recipients. The purpose of this study was to overcome the problem determination of loan recipients by providing objective assessments to prospective loan recipients at the Cooperative Mekar Surya Karanganyar using the TOPSIS method. Loan determination applications use the Visual Basic programming language. Research methods include data collection and analysis and system design. The formulation of this research problem covers how the loan determination at the Cooperative Mekar Surya Karanganyar uses the TOPSIS method and how to build a loan determination application system using the TOPSIS method using the Visual Basic programming language. Based on the test results by comparing the determination of customer loan recipients in the Mekar Surya Cooperative with the calculation of the TOPSIS method proves the application of determining the loan recipient has good performance.Keywords: TOPSIS, Determination of loan recipients, Cooperative

Bank Liquidity Provision across the Firm Size Distribution

Using loan-level data covering two-thirds of all corporate loans from U.S. banks, we document that SMEs (i) obtain much shorter maturity credit lines than large firms; (ii) have less active maturity management and therefore frequently have expiring credit; (iii) post more collateral on both credit lines and term loans; (iv) have higher utilization rates in normal times; and (v) pay higher spreads, even conditional on other firm characteristics. We present a theory of loan terms that rationalizes these facts as the equilibrium outcome of a trade-off between commitment and discretion. We test the model’s prediction that small firms may be unable to access liquidity when large shocks arrive using data on drawdowns in the COVID recession. Consistent with the theory, the increase in bank credit in 2020:Q1 and 2020:Q2 came almost entirely from drawdowns by large firms on pre-committed lines of credit. Differences in demand for liquidity cannot fully explain the differences in drawdown rates by firm size, as we show that large firms also exhibited much higher sensitivity of drawdowns to industry-level measures of exposure to the COVID recession. Finally, we match the bank data to a list of participants in the Paycheck Protection Program (PPP) and show that SME recipients of PPP loans reduced their non-PPP bank borrowing in 2020:Q2 by between 53 and 125 percent of the amount of their PPP funds, suggesting that government-sponsored liquidity can overcome private credit constraints.

Empowerment of Small Businesses through The Implementation of Qardhul Hasan Financing

The research aims to describe Qardhul Hasan financing and recognize the problems faced in micro businesses in the city of Malang. The study was conducted on two research objects. The first study was on a used motorcycle dealer business that received Qardhul Hasan during the 2016-2018 period. The second study in 2019, was the implementation of Qardhul Hasan in small-scale creative economy traders, whose source of funding came from 2.5 percent of profits from used motorcycle dealers. The results showed that the implementation of Qardhul Hasan financing was quite profitable. Qardhul Hasan who is allocated to the creative economy group indicates a feeling of happiness and calm because loan repayments are not burdened with costs, besides having flexibility from the time of repayment. Economic actors managed to collect savings from repaying loan installments. Qardhul Hasan funding received a reasonably good response from economic actors. Qardhul Hasan loan recipients should be able to maintain trust and uphold the agreements that have been built. This study has implications for the development of Qardhul Hasan, namely strengthening the concept of Qardhul Hasan as loan financing, and strengthening groups for small businesses to run the Qardhul Hasan management mechanism JEL Classification: D14, Q21, G51