Small Credit Research Articles

Financial Management of Microfinance Companies in India

Abstract: History of microfinance can be traced back to the middle of 1800s when the theorist Lysander Spooner was writing of about benefits of small credits to entrepreneurs. It is the source of financial services to small scale business lacking access to banking and related services. Microfinance refers to a variety of financial services that target low-income clients particularly women since the clients of microfinance companies (MFCs) have lower incomes and often have limited access to other financial services, microfinance products tend to be for smaller monetary amount than traditional financial services. These services include loans, savings, insurance and remittance. Microfinance loans are given for variety of purposes frequently for microenterprise development. This also reflects in diversity of products and services offered. Because of varied needs and because of the industry’s focus on the poor, microfinance often use nontraditional methodologies such as group lending or other forms of collateral securities not employed by the formal financial sector. Keywords: Microfinance, Financial Management, JLG, SHGs.

Book review: Rajesh S.N. Raj and Subash Sasidharan, Small Firm Ownership and Credit Constraints in India

Rajesh S.N. Raj and Subash Sasidharan, Small Firm Ownership and Credit Constraints in India (New York and London: Routledge, 2020), 216 pp.

Кредитные учреждения Области войска Донского в пореформенный период

The defeat in the Crimean War, the devastated post-war national economy and the recession in the economy cast great doubt on the future of the Russian Empire as a European power. Overcoming of the technological and military-technical lag of Russia from the leading European powers, the Tzarist government saw in the development of the banking system as well. Modernization in the financial sector contributed to the emergence of the State Bank, which carried out various accounting and loan operations to support different categories of the population. In the Don region lending to sectors of the local economy was carried out by the Rostov office of the State Bank. The economic specificity of the Don Cossack Army Region caused lending primarily to representatives of the peasant population, traders and companies selling grain crops. The author examines the functioning of commercial banks in the framework of the development of capitalist relations in the Don Cossack Army Region and Russia as a whole. Separately, he outlines the influence of state banks on the formation of domestic mortgage lending in the post-reform period. The activity of small credit institutions and inter-credit societies to the accounting of bills, the issuance of loans and the reception, and storage of deposits is considered. The influence of the Rostov City Public Bank on the Don economy is investigated.

ANALISIS PENGARUH BAURAN PEMASARAN TERHADAP KEPUTUSAN PENGAMBILAN KREDIT USAHA BAGI NASABAH DI SENTRA KREDIT KECIL PT. BRI (PERSERO) CABANG WATAMPONE

This study aims to influence the marketing mix on business credit decisions for customers in small credit centers of PT. BRI (PERSERO) Watampone Branch. This study was designed based on the objectives to be achieved through a descriptive and associative approach, namely describing descriptively the 7 P's marketing mix and purchasing decisions. Data were analyzed by Multiple Linear Regression Analysis. The results showed that product, price, distribution, promotion, human resources, physical appearance and process simultaneously significantly influence customer decisions in taking credit at BRI Bone Branch. Product, price, distribution, promotion, human resources, physical appearance and process, partially has a significant effect on customer decisions in taking credit at BRI Bone Branch

ANALISIS PENGARUH BAURAN PEMASARAN TERHADAP KEPUTUSAN PENGAMBILAN KREDIT USAHA BAGI NASABAH DI SENTRA KREDIT KECIL PT. BRI (PERSERO) CABANG WATAMPONE

This study aims to influence the marketing mix on business credit decisions for customers in small credit centers of PT. BRI (PERSERO) Watampone Branch. This study was designed based on the objectives to be achieved through a descriptive and associative approach, namely describing descriptively the 7 P's marketing mix and purchasing decisions. Data were analyzed by Multiple Linear Regression Analysis. The results showed that product, price, distribution, promotion, human resources, physical appearance and process simultaneously significantly influence customer decisions in taking credit at BRI Bone Branch. Product, price, distribution, promotion, human resources, physical appearance and process, partially has a significant effect on customer decisions in taking credit at BRI Bone Branch

Study on Environmental Impact Risk Assessment of Punjab Tunnel Construction

Vegetables have a great importance in agriculture sector. These crops share a great contribution to agriculture in national economy. There are many vegetables which can be grown in Pakistani climate and soil. Tunnel farming is a new technology for growing vegetables due to increase in population and small land for agricultural use. Government of Punjab is doing its effort to disseminate this technology among the farmers to enhance their vegetable production. Fruit and Vegetable Development Project (F&VDP) was also started by the Punjab government in 20 districts of the Punjab. The study was done in Faisalabad district of Punjab, Pakistan. In Faisalabad, there were 12 Farmer Field Schools (FFSs) under F&VDP, out of which six FFSs were randomly selected for the collection of data through interview schedule. From each selected FFS, 20 respondents were selected randomly making sample of 120 respondents. The data were analyzed through the computer software Statistical Package for Social Sciences (SPSS). Based on the findings of the present study, it was assessed that respondents got benefits from the project in term of increase in their income and their area under vegetable cultivation also increases. Similarly, farmers knowledge about plants growth also enhanced, quality of produce increased. It is suggested that the time period of the project should be extended and there should be facility of small credit schemes for poor farmers to ensure the timely availability of quality seeds, pesticides and fertilizers. It is proven that project has enhanced livelihood assets to sustain the family lives of farming community.

Credit Rating Model of Small Enterprises Based on Optimal Discriminant Ability and Its Empirical Study

As an important part of the national economy, small enterprises are now facing the problem of financing difficulties, so a scientific and reasonable credit rating method for small enterprises is very important. This paper proposes a credit rating model of small enterprises based on optimal discriminant ability; the credit score gap of small enterprises within the same credit rating is the smallest, and the credit score gap of small enterprises between different credit ratings is the largest, which is the dividing principle of credit rating of small enterprises based on the optimal discriminant ability. Based on this principle, a nonlinear optimization model for credit rating division of small enterprises is built, and the approximate solution of the model is solved by a recursive algorithm with strong reproducibility and clear structure. The small enterprise credit rating division not only satisfies the principle that the higher the credit grade, the lower the default loss rate, but also satisfies the principle that the credit group of small enterprises matches the credit grade, with credit data of 3111 small enterprises from a commercial bank for empirical analysis. The innovation of this study is the maximum ratio of the sum of the dispersions of credit scores between different credit ratings and the sum of the dispersions of credit scores within the same credit rating as the objective function, as well as the default loss rate of the next credit grade strictly larger than the default loss rate of the previous credit grade as the inequality constraint; a nonlinear credit rating optimal partition model is constructed. It ensures that the small enterprises with small credit score gap are of the same credit grade, while the small enterprises with large credit score gap are of different credit grades, overcoming the disadvantages of the existing research that only considers the small enterprises with large credit score gap and ignores the small enterprises with small credit score gap. The empirical results show that the credit rating of small enterprises in this study not only matches the reasonable default loss rate but also matches the credit status of small enterprises. The test and comparative analysis with the existing research based on customer number distribution, K-means clustering, and default pyramid division show that the credit rating model in this study is reasonable and the distribution of credit score interval is more stable.

Small credit through online platforms

ABSTRACT Small credit through online platforms bears the risk of excessive interest rates, high hidden costs and ruthless debt collection practices. At the EU level, they are partly unregulated, whereas Member States have taken specific measures to manage the risk or avail of general concepts of law that can be applied to small credit. Using specific credit offers for the sake of illustration, this article flags up relevant problems with small credit and current approaches to solve them. It also considers the current reform of the Consumer Credit Directive, which is expected to be adopted in 2023, and its potential effect on small credit providers. It concludes that substantive law already offers reasonable protection, and it will improve with the new Consumer Credit Directive, although there is much legal uncertainty in many usury laws. There is, however, a serious enforcement problem that allows dubious lenders to apply unlawful practices.

Credit supply shocks and household consumption in Russia

The paper presents a comparative analysis of the reaction of different consumer groups to the bank credit supply shocks. As parameters of consumer heterogeneity, we consider differences ( i ) in the form of home ownership (households with and without mortgages and tenants) and ( ii ) in the form of credit (households with large debt (mortgages, car loans), households with small (consumer) credit and without loans). For empirical analysis we use RLMS-HSE longitudinal Household Panel Survey for the period from 2006 to 2019, which covers two episodes of the credit crisis and post-crisis recovery. Bank credit supply shocks are estimated using the standard structural vector autoregression (SVAR) model, which also identifies aggregate supply and demand shocks and monetary policy shocks. Our results show that with a positive credit supply shock, which is equivalent to a 0.5 percentage point reduction in the interest rate on loans, households with mortgages increase their consumption by 2.1—2.5% more than households without mortgages. The observed effect is significant, since the average annual growth rate of consumption of households with mortgages in our sample is 3.8%. Our results indicate that the Bank of Russia’s macroprudential policy, which uses countercyclical capital buffers (Basel III) as a tool, can be very effective in smoothing the consumption of households with mortgage debt.

Daily supervisor support, engagement, and extra-role behaviors: The role of psychological attachment

In this paper, we integrate conservation of resources and relational cohesion theories, and test the mediating role of daily job engagement in the relationships of daily supervisor support (SupS) with prosocial behaviors such as interpersonal justice treatment and individually-directed organizational citizenship behaviors (OCBI). Additionally, we propose employees’ turnover intentions to minimize these effects when high. Employees of a small credit union were recruited to participate in a repeated survey spanning ten days of a two-week workday period. 50 employees (59.52% response rate) with a total of 293 survey responses contained usable responses that were used in our hypothesis tests. Daily job engagement was found to mediate the relationships of daily SupS with OCBI, not interpersonal justice treatment. Turnover intentions were also found to reduce the SupS-job engagement relationship and offset the indirect effect with OCBI only. The implications of these findings for future research are then discussed.

Analysis of Factors Affecting the Amount of Credit Distribution at Credit Unions

Capital is the most important thing in production activities. Without capital, it is impossible for a production activity to run as it should. Likewise for entrepreneurs, especially micro, small and medium entrepreneurs who generally experience problems in terms of capital. These capital giving institutions are generally handled by the banking sector. However, for various reasons, these micro, small and medium entrepreneurs rely more on credit originating from non-governmental organizations which are currently emerging in the community. The institution emerged to develop a small credit mechanism specifically for micro, small and medium entrepreneurs. Like the Credit Union, it is one of the credit providers for micro, small and medium entrepreneurs.

Prospects for Interest-Free Micro Finance in India: An Empirical Study

Despite the growth of Islamic banking and finance, in recent times due attention were given to the issue of Islamic microfinance. It is so because, as per various estimates over two billion people across globe are still living in a miserable poverty which is a global challenge and India not being an exception. Since the Poverty remains, a continuous challenge throughout the human history so as the efforts to overcome poverty. Among various efforts a conventional micro finance a “new model” received global recognition and a hope. But even if successful stories in bringing development and eradicating poverty by small credit tool to poor and by gaining growing attentions by world bank , still millennium development goal remains unachieved. The critics’ remains not only restricted to, in reaching all forms of poor rather high unbearable interest rates and avoidance by Muslims due to interest are on debate. As an alternative, Islamic finance has its operations both in Islamic and Non-Islamic countries along Islamic Micro finance. It is so because Islamic microfinance programs are complement to Islamic banking, both in ideological and in practical terms. Although IMF is still in infancy stage even though growing rapidly. Various experiments either on individual level or group level are mostly practicing Islamic micro credit products. But Islamic micro crediting has not been yet formally reached to people for India. Therefore this study aims to investigate the prospects based on determinants. The target population has been taken a potential benifacries of interest free micro finance. The paper adopts a Quantifiable approach as a Questionnaire distributed in paper format based on stratified sampling with 602 as final responses. The findings shows that in general the community is cognizant of the various terms used in Interest free microfinance but in respects of products/services existing by Islamic microfinance institutes, it indicates the level of awareness is very low.

Who Could We Blame? The Impact of Strategic Orientations on the Failure of Financial Institutions

We evaluate the impact of strategic orientation on the failure probability of financial institutions. Using the US credit union industry as the empirical setting, we find that credit unions which exhibit preferential treatment to borrowers are more likely to fail, whereas those who set operational strategies towards balancing the benefits between savers and borrowers experience a lower failure probability. The impacts appear to be more pronounced in small credit unions and in credit unions which have a lower operating experience. We also find that borrower-oriented credit unions generate lower interest margins while neutral behavior credit unions generate higher margins.

Research on Countermeasures and Financing Risk of Small and Medium-Sized Enterprises in China

SMEs have played an important role in deepening of construction of socialist market economy in China. Their contribution rate to our country's economy is rising continuously, they also stimulate technical innovation. However, because of their small scale, credit margin and other factors and imperfect market mechanism, SMEs are facing a severe situation in the process of financing, the huge financing risk has become the core problem restricting the development of SMEs. This paper employed the KMV model to make an empirical analysis. Then, the author puts forward corresponding suggestions for the financing of SMEs in the future.

Credit Card Fraud Detection using Machine Learning

Now a days credit card plays a very important role in the lives of the human being. It becomes an important part of the businessman, global activities and many more. Even using credit cards give us a most widely used of benefits when it used with the responsibility and carefully, and very small credit and financial harm is also caused by fraudulent activities or transactions. There are a lot of techniques are given to encounter the scope in credit. In spite of, whatever the methods are used they have the same goal of clog the card fraud and each one has its own advantage, drawback and the characteristics too. The deficiency and the good of the credit card detection-methodologies are description and dissimilarity. Moreover, a taxonomy of reference techniques are classified in two fraud-detection perspective, as misuse (supervised) and absurdity (unsupervised) is given. Again, a taxonomy of methods is presented supported caliber to process the categorical and numerical datasets. Other kind of datasets are made in the literature then mentioned and sorted in real and club into the group of the data and therefore the dominant and customary attributes are removed for prosecute application. Consequently, for the new researches, the issues for credit card fraud-detection are described as per the recommendations.

Bank Loan Strategy Based on Evaluation and Decision Model

In real life, in the face of small and medium-sized enterprises lacking mortgage assets, banks usually provide loans to enterprises with strong strength and stable supply-demand relationship according to credit policies, transaction notes information of enterprises and influence of upstream and downstream enterprises, and can give preferential interest rate to enterprises with high reputation and small credit risk. In order to better meet the application of the model in real life, the enterprise loan mode is introduced, and the risk assessment of each loan mode is carried out according to the actual situation. Finally, the fuzzy neural network model is introduced. The enterprise loan mode and three secondary indicators are taken as the input of the fuzzy neural network. Finally, a three-level index: loan risk assessment is obtained. Using Python program to preprocess the data, the original indicators in the given materials are extracted as the first level indicators, and then on the basis of the first level indicators, the main factor analysis and other methods are used to analyze the characteristics and scoring of the second level indicators. Then, the entropy weight is established to obtain the higher-level index loan tendency, and the loan propensity and enterprise reputation are used as parameters to establish the decision-making Model, step by step to get the bank’s quota allocation, interest rate, and finally get the bank allocation plan. In order to supplement the unknown data, this paper uses the known information to forecast the whole process of the unknown quantity, and then uses the data to forecast. First of all, it forecasts whether the default occurs, adds the predicted value to the whole eigenvalue, then forecasts the reputation rating, and finally completes the reasonable supplement of location data. TOPSIS model, SPSS software simulation machine learning, Fisher discriminant analysis

Game Analysis on the Difficulties of Small and Medium-sized Enterprises' Credit Financing in the Big Data Era

The effective use of social funds is an important guarantee for the benign development of the economy. The shortage of funds faced by the development of small and medium-sized enterprises (SMEs) and a lot of social capital sits idle are still one of the major contradictions that need to be resolved urgently. And the main source of funds for China’s real economy is still loans from commercial Banks. Through the analysis of the loan game between Banks and enterprises in the target economic environment we can find the crux of the problem. Which mainly lies in the market for enterprise information management demand and Market-based interest rate management to reduce market transaction costs and other regulatory construction issues. Therefore, in order to improve market transparency and reduce bank and corporate loan risks, the government and banks should make corresponding system management reforms in credit evaluation and classification and block management.

Effects of Microcredit on Crop Productivity in District Charsadda, Khyber Pakhtunkhwa

This study investigates the effects of microcredit on crop productivity in three villages located in district Charsadda, Pakistan. Khushali Bank, Pakistan, is an important institute that finances microcredit ranging from 15,000 to 50,000 PKR (Pakistani Rupees) per person. Sample size of 200 was choose for the analysis of this study, out of which 90 responded. Ninety farmers from three villages producing maize, tobacco, and sugarcane were interviewed. A paired sample t-test was applied to compare crop productivity in situations where microcredit was supplied with situations where it was not. Production per acre of all the three crops show a significant positive correlation with the amount of microcredit obtained from the bank. However, crop productivity remained significantly constant. Thus micro financing generally improves crop production; however, the constancy of crop productivity is explained by small credit volumes, by high interest rates, by lack of modern agricultural technology, by lack of productive ideas, and by bad monitoring through field officers of banks. The analysis of this study suggests some policy implications first, micro financing is a source of encouragement for the needy farmers, so local banks should advertise micro financing regularly. Second, the banks should increase its micro financing credit up to 200000 PKR, so that farmers can easily manage their expenses that will be more beneficial for local economy and individual profit. Third, Banks must decrease interest rate that will encourage needy farmers to take loans on regular basis. Keywords: Agricultural Technology, Microcredit, Productivity, Khushali Bank, KP, Pakistan.

PENGARUH INDUSTRI KECIL, TENAGA KERJA, DAN KREDIT TERHADAP PDRB DI KARESIDENAN KEDU TAHUN 2014-2018

This study aims to see how much influence the small industry, labor, and credit scores have on the PDRB in the Kedu Residency. This research uses a quantitative approach, by taking the object of research in the Kedu Residency Area within five years, namely in 2014-2018. The dependent variable in this study is the PDRB in the Kedu Residency Area and the independent variable of this study is the number of small industries, the number of workers, and credit. The rate of PDRB growth in the manufacturing sector and growth in the small industrial sector in the residency of Kedu tends to fluctuate. Considering that the majority of the processing industries in the Kedu residency are small industries, it can be said that the management of the potential of small industries in the Kedu Residency has not been explored properly. The results of this study indicate that the distribution of funds in the form of granting loans / credit significantly influences the PDRB in the Kedu Residency, while the number of small industries and labor does not significantly influence the PDRB in the Kedu Residency. Keywords : Industry, labor, PDRB, Kedu Residency

Sheep and Goat Production, Challenges and Opportunities in Southern Ethiopia

The study was conducted in Gedeb, Bule, Amaro, Gelana, Abaya and Dilla Zuria of southern Ethiopia to identify and describe Sheep and Goat production systems, production potentials and challenges. After a pilot survey, study districts were stratified based on agroecology and their potential. From each stratum, six districts were selected randomly and three kebeles were selected from each district; finally180 households participated in data collections. The overall mixed farming system was dominant and the average landholding per household was more than 4 hectares; the mean landholding per household in Gelana and Abaya districts was significantly higher (P<0.05) than those of other districts. Sheep production was dominant in Bule (33.3%) followed by Gedeb (30%), while Goats were slightly dominant in Amaro and Gelana, overall mean was significant (P<0.05) across the districts and breed. The number of the animal was significantly different in all districts. Almost all respondents were kept small ruminant for income generation. Grazing of natural pasture and crop residue were common in Bule and Gedeb, while communal land grazing and browsing were common for Abaya and Gelana. Overall most of the respondents were kept their animal adjacent to their family house (37.8%) followed by a separate room (27.8%) and living with family (24.4%). Lack of extension and credit support (21.7%) was a major problem across the district followed by disease, parasite, Lack of input and technologies and market problems (17.2%). Conducive environment, animal productivity and human population growth were major opportunities of small ruminant production in the study area. All respondents were responded small scale enterprises were not established. This study concludes that even if the environment of study areas were conducive for production of small ruminants, the production system is still backyard and there are no small scale enterprises engaged in small ruminant production, thus, extension service and credit should be facilitated and establishment of small scale on small ruminant production must be established in study districts. Keywords : Goat, Sheep, Southern Ethiopia. DOI: 10.7176/JBAH/10-19-03 Publication date: October 31 st 2020