Repayment Terms Research Articles

Launching a Text Message Intervention to Assist Student Loan Borrowers with Repayment Decisions

Student loan debt has become a financial burden for many young adults in the United States. Previous research has found that many college student borrowers do not understand repayment terms and options. This multistate collaboration among Cooperative Extension Specialists sought to develop a way of supporting and informing recent college graduates on the process of student loan repayment. Text messaging was used as the intervention strategy. The purpose of this article is (i) to explain the process and methods of developing the student loan repayment text messaging campaign and (ii) present suggestions for someone interested in launching this type of intervention. Also, the article provides initial participation numbers across the nine land‐grant universities that were participants in the intervention.

An Optimal Prediction Model’s Credit Risk: The Implementation of the Backward Elimination and Forward Regression Method

The purpose of this paper is to verify whether there is a relationship between credit risk, main threat to the banks, and the demographic, marital, cultural and socio-economic characteristics of a sample of 40 credit applicants, by using the optimal backward elimination model and the forward regression method. Following the statistical modeling, the final result allows us to know the variables that have a degree of significance lower than 5%, and therefore a significant relationship with the credit risk, namely the CSP (Socio-occupational category), the amount of credit requested, the repayment term and the type of credit. However, by implementing the second method, the place of residence variable was selected as an impacting variable for the chosen model. Overall, these features will help us better predict the risk of bank credit.

FINANCIAL LIQUIDITY OF AGRICULTURAL HOLDINGS

The liquidity of the agricultural holding makes it possible to establish to what extent it is possible for it to cover its liabilities in the near future. The company can focus on sticking to certain values ​​of these indicators - these are values ​​that according to the financial management of the company if achieved, it will mean that there will be no significant problems in terms of repayment of current obligations. The purpose of the research is after measuring the state of financial liquidity of agricultural holdings and capturing the trend, to analyze whether current ratios are enough for covering short-term expenses. The study has included representatives of the micro business in Bulgaria using survey and comparative analysis. The results reveal satisfactory levels of liquidity and managed to capture a descending trend comparing the levels of liquidity for the researched period.

PROBLEMS OF LEGAL REGULATION OF CREDIT CONDITIONS

Objective. The objective of the article is to research the problem of consumer crediting. As crediting plays an important part not only in ensuring the social requirements of the population, but also in influencing the development of the state’s economy in all sectors, from the production and sale of goods and services to the activities of partial divisions of the financial system. Methods. The tasks are solved with the help of such methods as the consideration and generalization of scientific, popular science literature and normative legal. Results. The authors offer to introduce some changes and improvements in the cur- rent legislation, which regulates the legal relations in the industry, and the introduction of new, modern provisions on crediting, because consumer crediting is the most popular and common type of banking operations in different countries of the world. For example, it wouldn’t be a bad thing to adopt modern amendments to the Law on Consumer Crediting, which should establish legible criteria for a consumer loan, the amount of notice that a bank should devote to a consumer, as well as establish special accountability of financial institutions for failure to comply with the obligation to provide relevant information, etc. The authors conclude that there is an urgent need to develop a modern Crediting Regulation, which defines the definitive agreements and general provisions for the conclusion of transactions, because bank lending has become widespread, because due to lack of funds from citizens, increased pricing, many Ukrainians are forced to take loans from banks to buy real estate, home appliances, etc. In the presence of the definitive arrangements of the loan agreement: credit (cash), repayment term, payment of interest — the loan agreement is affected by the nature, determinative and opposing agreements on the part of state regulation, which occurs through the methods and forms of state regulation of economic function and banking regulation. At present, such methods and forms are obliged to be defined and compared to the system in the legislation, in the intersection of partial groups of economic activity, that is — the activity of banks.

Dynamics of Public Debt and Economic Growth in Nigeria

The study examined the Dynamics of Public Debt and Economic Growth in Nigeria, from 1980 to 2018. The study adopted Vector Auto Regressive Analysis in estimating the Data obtained from World Bank Development Indicator and Central Bank of Nigeria (CBN) statistical Bulletin, Annual Report and Statement of Account for the year 2018. The variables used in the study are GDP proxy for economic growth which serves as the dependent variable and External debt, Domestic debt, Government expenditure and Exchange rate form the independent variables. However, from the result it was deduced that, external debt, and domestic debt has a negative impact on economic growth in Nigeria. This is shown by the negative coefficient of EXDBT, and DDEBT. However, government expenditure and exchange rate has a positive impact on economic growth in Nigeria, and jointly, all the variables were significant as seen with the probability statistics. The VAR, estimates was able to show the extent of dynamics between public debt and economic growth especially when debts are disaggregated into external and domestic debt. It was concluded that, while domestic debts sign negatively with Nigeria’s gross domestic product, external debts sign negatively with it. The results contradict a-priori expectation of positive relationships based on theoretical postulation of the advantageous effects of leverage both at corporate and national levels, however, the results might probably have emanated from the fact that external debts are often associated with stringent repayment terms. They also embody other trade conditionality’s which may turn out to be counter-productive and inimical to the growth of less developed economies. However, it was recommended that, Nigeria should concentrate on inward financing of her economic growth by utilizing mostly, domestic debts Keywords: Public Debt, External Debt, Domestic Debt, Economic Growth DOI : 10.7176/JESD/10-24-03 Publication date: December 31 st 2019

The Graying of American Debt

Between 2003 and 2015, real aggregate debt in the hands of Americans aged 50 to 80 increased by 59 percent. Meanwhile, real debt held by Americans in their twenties and thirties was approximately flat. Using data from the Federal Reserve Bank of New York’s Consumer Credit Panel, we describe the extent of this debt increase and the distribution of debt growth by loan type. Real per capita home-secured debts held by older consumers show the steepest growth, though older borrowers have increased their obligations in all major debt categories. For long-held debts, these developments lead us to ask how such changes emerged: did older borrowers carry more debt through the Great Recession, after which access to consumer credit declined for new borrowers of all ages? Alternatively, have loan originations since the Great Recession favored older over younger borrowers? While our results indicate that the stock of long-held, home-secured debt sits largely with older borrowers, we also uncover evidence of a decisive tilt of new auto and mortgage originations away from younger borrowers and toward borrowers in their fifties, sixties, and even seventies. The motivation behind older consumers’ substantial new borrowing, often with long repayment terms, is the focus of ongoing research.

Determinants of Loan Repayment among Small-scale Cassava Farmers in Akpabuyo Local Government Area of Cross River State, Nigeria

This study investigated the determinants of loan repayment among small-scale cassava farmers in Akpabuyo Local Government Area of Cross River State, Nigeria. Data were collected with structured questionnaire from 160 randomly selected farmers. Data were analyzed using simple descriptive statistics, multiple regression and likert scale. Results showed that males were dominant (56.6%) in cassava production and majority (37.5%) were between 41-50 years. About 50% had farm income of less than N100,000.00 while about 46.3% had less than N50,000.00 as their off-farm income. Also, the results found that majority (44.4%) obtained loans from informal sources. Factors that significantly affected loan repayment include off-farm income and interest rate (p ≤ 0.05) and farm income (p ≤ 0.05). The major causes of loan diversion were seasonal activities in the agricultural sector (66.9%) and inadequate sustainable income (65.6%) among others. The major constraints faced by the farmers in terms of loan repayment were high interest rate and short period of repayment among others. Government should encourage the formal loan sources to open branches in the rural areas for easy loan accessibility by farmers and to obtain loan with moderate interest rate.

Setting defaults for online banking transactions: Experimental evidence from personal loan repayment terms

As more people use online tools to assist financial decision-making, it is important to understand how the design of these tools influences consumers’ choices. We conducted an experiment (N=180) using a simulated product comparison tool for personal loans, which tested whether choices were affected by the default settings for properties of the loan. The results show that changing the default repayment term from 1 year to 5 years led to 12%–16% more consumers choosing a repayment term of 4 years or longer, which would cost each of them a minimum of €470 on a €10,000 loan. These findings imply that subtle presentational features of online tools may have systematic effects on important financial decisions.

A Comparative Analysis on Efficiency of the Student Loan Repayment Policy in Ghana, Kenya, Tanzania, Rwanda and Nigeria

The Ghanaian student loan has been touted as an innovative policy to enhance human development yet the policy is contending with inherent inefficiencies. With the general objective of this study, to critically analyze the success and sustainability of the SLTF loan in Ghana through the repayment and recovery rate using the relative efficiency index (REI=Repayment Ratio / Recovery Ratio) as compare to other Africa countries. This research analyzed the repayment mechanism used in the Ghanaian SLTF and the other countries under study, focusing on a payment schedule, time-frame and the interest rate applied. From the research, although the repayment ratio is high mean, the value of loan amount is also high this suggests that there are gaps to be filled in terms of repayment. Loan repayment is also affected by the interest rate and the salary as shown in the data. The researcher recommends that the loan amount should be reviewed upwards while the repayment period of the student loan remains 10years. With trending issues based on others literature on student loans, the researcher can predict that the loan efficiency would be positive if a high percentage of the loans are paid by student borrowers within the repayment period.

Банковская система России в современной экономике

according to the Federal law «On banks and banking activities» the Bank is a credit institution that has the exclusive right to carry out the following banking operations in the aggregate: attracting deposits of individuals and legal entities, placing these funds on its own behalf and at its own expense on the terms of repayment, payment, urgency, opening and maintaining Bank accounts of individuals and legal entities.

Creditors Attitude towards Clients Sustainability Reporting Practices in India

The research is aimed at “To evolve a method of sustainability reporting practices for social expenditure incurred by business organizations so that the information to the creditor and stakeholders becomes “impact measurable” thereby, becomes more meaningful & relevant.”Since sustainability reporting practices are getting more & more adopted by many companies there is a great need to come out with an appropriate method for reporting which may cover quantitative & qualitative aspects & also measure the impact of such contribution. In contrast to financial reporting,  the history of sustainability reporting  (SR)  is comparatively recent.  The proposition that organizations,  and business organizations  in particular,  should supplement their financial accounting with accounting on their environmental,  social and other  'non-financial'  performance  -  or  'sustainability reporting'. Responding to the increasing media attention to environmental problems, most reports focused on environmental policies and performance. This present research paper attempts to evaluate the Creditors' participation in framing sustainability reporting practices in India. Result Mean weighted score towards awareness on sustainable reporting practices (SRP) of their clients is 3.71, i.e.74.2 percent level of awareness that provides satisfaction on their client’s repayment terms to the extent of 3.10 score or 62 percent only. Therefore, it can be concluded that the impact of sustainable reporting practices of SENSEX companies on their creditors’ terms is significant statistically. Hence, it is suggested to the creditors to examine the variables (such as ASRP, PSA, and SDI) which have a negative impact on the creditors and further it should improve the variables (CEPCD, CSSR, G, AG & Q) which have a positive impact but not significant statistically.

The excessive receivables of the enterprises: causes and consequences for the financial system of Ukraine

In accordance with the established approach, excessive receivables are a manifestation of the crisis situation with inter-company settlements whose fundamental reason is the lack of liquidity and capital in the economy. Freezing cash into receivables slows down capital flows in the economy, generates systemic risks and negatively affects the companies' investment activities. In this article, excessive receivables are defined as the excess of the share of receivables in assets over its normal level, which is typical for a particular country's model of business financing, with due regard to sector specificity. The author analyzes causes and consequences of the abnormally high amounts of recei¬vables in Ukraine. Among the reasons for excessive receivables in the assets of Ukrainian companies are low payment discipline and difficulties in recovering debts, whose manifestations include a large proportion of overdue and bad debts. The emphasis is made on slowing settlements and increasing burden of receivables in the country. Decomposition of aggregated receivables for goods, works and services based on company size shows a shift in the non-payment burden towards small and medium-sized businesses, whose manifestation is the extension of repayment terms. At the same time, more than a half of the receivables in Ukraine's companies accounts for other receivables that are not directly related to the companies' operative activities, which is one of the manifestations of business financialization. Compared to foreign countries, the above share in Ukraine is abnormally high, due to the active use of shadow loan capital schemes by companies, including the laundering of "dirty" funds and the injection of capital from offshore to support business liquidity. Solving the problem of excessive receivables requires overcoming the existing liquidity shortage in Ukraine, increasing money supply based on gradual reduction of this government debt dependence and restoring business confidence in the banking system of Ukraine. The publication is prepared for the implementation of the planned project of the Department of Finances of the Reals Sector in the Institute for Economics and Forecasting of the National Academy of Sciences of Ukraine: "Financial Risks of Doing Business in Ukraine: Sector of Nonfinancial Corporations" (state registration No 0118U006088).

УПРАВЛІННЯ ЗОВНІШНІМ ДЕРЖАВНИМ БОРГОМ УКРАЇНИ

У статі розкрито сутність та економічний зміст категорії зовнішнього державного боргу. Зокрема, представлені різні підходи сучасних науковців-економістів стосовно дефініції зовнішній державний борг. Виявлено, що серед дослідників зовнішньої заборгованості немає єдиного підходу до трактування терміну «зовнішній державний борг». Це пояснюється тим, що державний борг характеризують з різних позицій.
 Проаналізовано сучасний стан та проведено ретроспективний аналіз формування боргових відносин в Україні. За результатами дослідження виявлено 8 етапів формування зовнішнього боргу України та представлено їх коротку характеристику. Наведено основні причини нарощення зовнішнього державного боргу серед яких наявність дефіциту бюджету протягом останнього десятиріччя, наявність боргових зобов’язань у значних для нашої держави розмірах перед країнами-кредиторами, зниження боргової безпеки у контексті невирішеного до сих пір військового конфлікту на сході держави. На сучасному етапі існує необхідність покриття дефіциту бюджету, рефінансування раніше здійснених державних запозичень тощо.
 Досліджено структуру зовнішньої заборгованості з різних позицій, а саме: у розрізі валют погашення та за типом кредитора. Аналіз структури зовнішнього боргу за типом кредитора дав змогу виявити основних кредиторів, якими являються міжнародні фінансові організації. Щодо валютної структури українських запозичень, то вона є деформованою, оскільки значну частку станолять позики, здійсненні у доларах США. Враховуючи вищесказане, система управління боргом знаходиться у прямій залежності від валютної політики держави та умов, які визначають кредитори, піклуючись про повернення позичених коштів.
 На основі аналізу поточної ситуації з заборгованістю в Україні, запропоновано практичні рекомендації щодо досягнення прийнятного рівня боргового навантаження в рамках оптимізації існуючої системи управління зовнішніми запозиченнями.

Joint-liability and dynamic incentive mechanisms in microlending: Evidence from lab-in-the-field experiments in Thailand

The mechanisms of joint liability and dynamic incentive in microfinance institutions are often cited as the key factors that lead to the low default rate in loan repayment in developing countries. The study tested the effects of joint-liability lending and dynamic incentive mechanisms on risk preferences and loan repayment. Through the conduct of microfinance lab-in-the-field experiments with 256 microfinance clients in Thailand, this study found that joint liability without dynamic incentive performs better than individual lending in terms of loan repayment. The dynamic incentive mechanism reduces risk-taking behavior and promotes loan repayment, however, combination of joint-liability and dynamic incentives enhances moral hazard through risk-taking. Further, participants tended to be more risk-taking when they perceived that their partners were risk-lovers.

High Deductibles and Living Paycheck-to-Paycheck: A Loan-Based Model for Primary Care Coverage

To date, healthcare funding models have been limited to insurance, savings programs, and unreimbursed care, with insurance being the dominant model. However, many modern insurance panels include deductibles which are fundamentally incompatible with the reality that many Americans live paycheck-to-paycheck. By reexamining old assumptions of how healthcare should be funded, in the context of a modern society with ubiquitous information technology, a new model could alleviate a common source of frustration for voters while preserving recent policy advancements. This paper outlines a proposal which could bridge the coverage gap created by high deductible levels, which are common in both ACA exchange plans and many employer provided plans today, using a loan-based approach. Such an approach would seem to greatly reduce the rather substantial transaction costs in healthcare by simplifying most transactions and provide a more patient-centered approach for common transactions up to a deductible limit. A specific proposal of how to implement such a proposal, using existing systems, is presented and payment scenarios are also presented. On the provider-side, debit card processing systems, which are widely used to process health savings account (HSA) payments, could be combined with something like the federal student loan program for loan repayment. The federal student loan program provides substantial funding with highly flexible repayment terms in a manner which is currently slightly profitable to taxpayers. Combining these two existing systems could provide much needed relief to patients in a way which is more patient-centered, reduces cost, expands coverage, and at minimal cost to taxpayers. Additionally, we show how the current health savings account framework could facilitate this if IRS regulations we modified to: 1) allow accounts to carry negative balances and 2) make interest expense related to medical care an allowable expense.

Corruption Significantly Increases the Capital Cost of Power Plants in Developing Contexts

Emerging economies with rapidly growing population and energy demand, own some of the most expensive power plants in the world. We hypothesized that corruption has a relationship with the capital cost of power plants in developing countries such as Bangladesh. For this study, we analyzed the capital cost of 61 operational and planned power plants in Bangladesh. Initial comparison study revealed that the mean capital cost of a power plant in Bangladesh is twice than that of the global average. Then, the statistical analysis revealed a significant correlation between corruption and the cost of power plants, indicating that higher corruption leads to greater capital cost. The high up-front cost can be a significant burden on the economy, at present and in the future, as most are financed through international loans with extended repayment terms. There is, therefore, an urgent need for the review of the procurement and due diligence process of establishing power plants, and for the implementation of a more transparent system to mitigate adverse effects of corruption on megaprojects.

Insolvency Proceedings for Natural Persons: Why is Latin American Innovating?

The benefits of commercial insolvency proceedings have been acknowledged globally. However, commercial insolvency proceedings are driven only by economic concerns. When the insolvent is a human being other concerns must be considered, such as: satisfaction of basic needs of the debtors and their families, relief from stress and health problems caused by over indebtedness, incentives to remain productive and to maintain or help debtors re-entry the economic market. Many international organizations had developed recommendations and principles for effective business insolvency regimes, but insolvency for non-business natural persons was left behind. However, the 2008 recession alerted of the dangers of excessive household debt. Accordingly, international organizations recommended revisions to insolvency laws dealing with natural persons. In Latin America only a few countries have implemented a special insolvency system for individuals. This paper will compare and analyze key features of the insolvency proceedings for natural persons implemented by Colombia and Chile. The analysis will be made by examining the statistics each country has provided, and by discussing the weight that: (a) access requirements, (b) renegotiation terms, (c) repayment terms and requirements for approval of repayment plans, and (d) costs have played in the results. The renegotiation proceedings implemented by Colombia and Chile have a special feature that has played a key role in achieving restructuring agreements with creditors: failure to reach an agreement during the negotiation stage leads to bankruptcy, and bankruptcy grants a discharge. However, statistics show that there are around 35% more filings in Chile than in Colombia, and that around 30% more repayment plans have been approved in Chile than in Colombia. Access requirements and costs have played an important role in these results. In Colombia individuals may not file for insolvency until their overdue debt equals 50% (fifty percent) of their total indebtedness. In contrast, Chilean filing requirements for a renegotiation agreement set forth a minimum debt amount, but do not require that the overdue obligations meet a percentage of the total indebtedness. Additionally, in Chile individuals with indebtedness below the required minimum amount may always file for the liquidation proceeding without having to meet any test, so debtors always have access to some form of relief. The fees and costs also make a difference in the number of filings and in the number of approved repayment plans. The proceeding in Colombia is more expensive, as debtors must pay a private mediator. In contrast, in Chile the renegotiation proceeding is free, as it is handled by public officers that cannot charge debtors or creditors for their services. Moreover, if a repayment plan is not approved debtors are lead to bankruptcy in both systems, where they must pay a liquidator. These causes that debtors in Colombia are bound to pay at least 2 professionals: the mediator and then a liquidator, but if debtors are not able to pay for any of those professionals their proceeding will be stalled. In Chile liquidators’ fees always have a cap when the parties do not approve a repayment plan but do approve the distribution of debtors’ assets for liquidation, and in the event the debtor cannot afford the liquidator’s fees the fees are paid by the Insolvency Authority from the public budget. These prevents insolvency proceedings from being stalled indefinitely in Chile and forces them to end, making sure individuals get a discharge upon termination of the proceeding. Renegotiation and repayment terms, as well as, requirements for approval of repayment plans do not seem to have a relevance influence in the results.

Factors Determining the Selection Criteria for Financing Avenues by Startup Entrepreneurs in India

There is an increasing importance to identify the factors that determine the selection criteria for financing avenues by startup entrepreneurs in India. The financing landscape in India has undergone significant changes in recent years, with the emergence of new financing avenues such as venture capital, angel investing, crowdfunding, and government-sponsored schemes. However, despite the availability of multiple financing options, many startup entrepreneurs continue to face significant challenges in securing funding for their ventures. Many entrepreneurs prefer lenders who were known for their credibility and had a good reputation in the market. The flexibility of repayment terms was also an important consideration, with many entrepreneurs preferring financing options that provided them with more time to repay the loan. The level of support provided by the lender, including mentorship, networking opportunities, and access to resources, was also an essential factor that influenced financing decisions. By understanding these factors, startup entrepreneurs can make more informed financing decisions and increase their chances of success. Policymakers and stakeholders in the startup ecosystem could work together to create a more conducive financing environment that addresses the challenges faced by startup entrepreneurs in accessing capital.

‘We will never escape these debts’: Undergraduate experiences of indebtedness, income-contingent loans and the tuition fee rises

This article critically examines how undergraduate students in a red brick university in the North of England have experienced the threefold rise in tuition fees since 2012, with particular attention on how they have begun to understand and negotiate the process of indebtedness. Drawing on a corpus of 118 interviews conducted with a group of 40 undergraduates across their whole student lifecycle, analysis is directed toward examining how students have variously sought to respond to the policy, reconcile the debt with their decision to study at university and, begin to negotiate a life of everyday indebtedness. The findings are located in the context of wider neoliberal policy trends that have continued to emphasise ‘cost-sharing’ as a mechanism for increased investment within the higher education sector generally, and individual fiscal responsibility specifically. Given the lack of any other viable career pathways for both lower and higher income students, they had to accept indebtedness as inevitable and take what comfort they could from the discourses of ‘foregone gain’ that they had been presented with. Evidently, and as the students in our sample well recognised, whether those discourses actually reflect the future remains to be seen. There is also no evidence within our data that students anticipated the subsequent changes to the repayment terms and conditions – a fact that is likely to compound feelings of economic powerlessness and constrain their capacity for financial agency yet further.

A Segmentation Study of Non-Performing Loans Rates in Turkish Credit Market

Non-performing loans (NPLs) rate is one of the main risks in commercial banks and is also a critical measure of the bank’s financial performance and stability. Banks meet the growth rate of NPLs when the debtors are not able to meet their financial obligations in terms of repayment of loans. Regional diversification can impact NPLs rate as well as macroeconomic and bank-specific factors. The purpose of this study is to detect homogeneous credit risk groups by geographical locations. Diversification across regions can help banks and financial institutions to determine appropriate market areas and identify effective diversified investment strategies by reducing the overall risk of the credit portfolios.