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1 – 10 of 303Akanksha Goel and Shailesh Rastogi
This study aims to formulate a behavioural credit scoring models for Indian small and medium enterprises (SME) entrepreneurs using certain behavioural and psychological…
Abstract
Purpose
This study aims to formulate a behavioural credit scoring models for Indian small and medium enterprises (SME) entrepreneurs using certain behavioural and psychological constructs. Two separate models are built which can predict the credit default and wilful default of the borrowers, respectively. This research was undertaken to understand whether certain psychological and behavioural factors can significantly predict the borrowers’ credit and wilful default.
Design/methodology/approach
A questionnaire survey was undertaken by SME entrepreneurs of two Indian states, i.e. Uttar Pradesh and Maharashtra. The questionnaire had two dependent variables: wilful default and credit default and nine independent variables. The questionnaire reliability and validity were ensured through confirmatory factor analysis (CFA) and further a model was built using logistic regression.
Findings
The results of this study have shown that certain behavioural and psychological traits of the borrowers can significantly predict borrowers’ default. These variables can be used to predict the overall creditworthiness of SME borrowers.
Practical implications
The findings of this research indicate that using behavioural and psychological constructs, lending institutions can easily evaluate the credit worthiness of those borrowers, who do not have any financial and credit history. This will enhance the capability of financial institutions to evaluate opaque SME borrowers.
Originality/value
There are very few numbers of studies which have considered predicting the credit default using certain psychological variables, but with respect to Asian market, and especially India, there does not exist a single significant study which has tried to fulfil such research gap. Also, this is the first study that has explored whether certain psychological factors can predict the wilful default of the borrowers. This is one of the most significant contributions of this research.
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The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act…
Abstract
The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act (which has been amended by the Sex Discrimination Act 1975) provides:
Debate is growing around the expansion of risk-based regulation. The regulation scholarship provides evidence of regulatory failure of the risk-based approach in different…
Abstract
Purpose
Debate is growing around the expansion of risk-based regulation. The regulation scholarship provides evidence of regulatory failure of the risk-based approach in different domains, including financial regulation. Therefore, this paper aims to provide cautionary evidence about the risk of regulatory failure of risk-based strategy in the financial regulation while using enterprise risk management (ERM) as a meta-regulatory toolkit.
Design/methodology/approach
Based on interview data gathered from 30 risk managers of banks and five regulatory personnel, combined with secondary data, this study mainly explores the challenges for meaningful use of ERM based self-regulation in regulated banks. The evidence helps to assess the risk of regulatory failure of the risk-based regulation while using ERM.
Findings
The evidence reflects that regulated banks face diverse challenges arising from both peripheral and internal environments that limit the true internalization of ERM-based self-regulation. Despite this, the regulator uses this self-regulation as a meta-regulatory toolkit under the risk-based regulation to achieve the regulatory aims. However, the lack of true internalization of ERM based self-regulation is likely to raise the risk of regulatory failure of risk-based regulation to achieve the regulatory goals. Risk-based regulation is an evolving strategy in the regulatory regime. Therefore, care should be taken while using ERM as a regulatory toolkit before relying on it substantially.
Originality/value
The paper provides empirical insights about the challenges for effective use of ERM as a meta regulatory toolkit that might be useful practically both to the regulators and regulated firms.
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Ahmad Kaleem and Rana Abdul Wajid
Islam prohibits interest as a source of income or profit. The purpose of this paper is to explore the possible application of Bai Salam contract (forward sale agreement) as an…
Abstract
Purpose
Islam prohibits interest as a source of income or profit. The purpose of this paper is to explore the possible application of Bai Salam contract (forward sale agreement) as an alternative financial instrument in the agriculture sector of Pakistan.
Design/methodology/approach
A survey was conducted in four districts of the Punjab with a specifically designed questionnaire. A convenient sampling technique was used to gather farmers' concerns related to crops inputs, output and credit requirements.
Findings
Empirical findings conclude that agriculture income represents only up to 60 percent of the income of an average farm household. About 70 percent of farmers participate in the credit market. They need money to purchase crops inputs, to pay the labour and to hire rental machinery. Farmers believe that they can save up to 25 percent in costs if they purchase inputs on cash. The survey also discloses that middlemen are the larger financers and buyers of crops in the rural economy whereby only 10 percent of transactions are conducted on a purely cash basis. Farmers usually return the money after the sale of the crop.
Research limitations/implications
The concept of the paper can be extended to areas where large landlords dominate the scene. Alternatively, it can be extended towards non‐farm activities such as cattle raising and poultry.
Originality/value
The paper is a first comprehensive effort to explore the possible application of an Islamic banking instrument in the agriculture sector of Pakistan. It also suggests three possible models for financing under a Bai Salam contract. Some policy recommendations are also given.
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The area of consumer safety is focused on, with regard to foodmanufacturers′ and retailers′ responsibilities. A number of judgments incourt cases concerning contraventions of the…
Abstract
The area of consumer safety is focused on, with regard to food manufacturers′ and retailers′ responsibilities. A number of judgments in court cases concerning contraventions of the Food and Drugs Acts, Consumer Safety Acts and Trade Descriptions Act are described together with their implications for food manufacturers and retailers. Some of the most significant provisions of the new Food Safety Act are addressed.
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The Departmental Committee appointed to inquire into the use of preservatives and colouring matters in the preservation and colouring of food, have now issued their report, and…
Abstract
The Departmental Committee appointed to inquire into the use of preservatives and colouring matters in the preservation and colouring of food, have now issued their report, and the large amount of evidence which is recorded therein will be found to be of the greatest interest to those concerned in striving to obtain a pure and unsophisticated food‐supply. It is of course much to be regretted that the Committee could not see their way to recommend the prohibition of all chemical preservatives in articles of food and drink; but, apart from this want of strength, they have made certain recommendations which, if they become law, will greatly improve the character of certain classes of food. It is satisfactory to note that formaldehyde and its preparations may be absolutely prohibited in foods and drinks; but, on the other hand, it is suggested that salicylic acid may be allowed in certain proportions in food, although in all cases its presence is to be declared. The entire prohibition of preservatives in milk would be a step in the right direction, although it is difficult to see why, in view of this recommendation, boric acid should be allowed to the extent of 0·25 per cent. in cream, more especially as by another recommendation all dietetic preparations intended for the use of invalids or infants are to be entirely free from preservative chemicals; but it will be a severe shock to tho3e traders who are in the habit of using these substances to be informed that they must declare the fact of the admixture by a label attached to the containing vessel. The use of boric acid and borax only is to be permitted in butter and margarine, in proportions not exceeding 0·5 per cent. expressed as boric acid, without notification. It is suggested that the use of salts of copper in the so‐called greening of vegetables should not be allowed, but upon this recommendation the members of the Committee were not unanimous, as in a note attached to the report one member states that he does not agree with the entire exclusion of added copper to food, for the strange reason that certain foods may naturally contain traces of copper. With equal truth it can be said that certain foods may naturally contain traces of arsenic. Is the addition of arsenic therefore to be permitted? The Committee are to be congratulated upon the result of their labours, and when these recommendations become law Great Britain may be regarded as having come a little more into line— although with some apparent reluctance—with those countries who regard the purity of their food‐supplies as a matter of national importance.
Istemi Demirag, Iqbal Khadaroo, Pamela Stapleton and Caral Stevenson
The UK government argues that the benefits of public private partnership (PPP) in delivering public infrastructure stem from transferring risks to the private sector within a…
Abstract
Purpose
The UK government argues that the benefits of public private partnership (PPP) in delivering public infrastructure stem from transferring risks to the private sector within a structure in which financiers put their own capital at risk, and the performance‐based payment mechanism, reinforced by the due diligence requirements imposed by the lenders financing the projects. Prior studies of risk in PPPs have investigated “what” risks are allocated and to “whom”, that is to the public or the private sector. The purpose of this study is to examine “how” and “why” PPP risks are diffused by their financiers.
Design/methodology/approach
This study focuses on the financial structure of PPPs and on their financiers. Empirical evidence comes from interviews conducted with equity and debt financiers.
Findings
The findings show that the financial structure of the deals generates risk aversion in both debt and equity financiers and that the need to attract affordable finance leads to risk diffusion through a network of companies using various means that include contractual mitigation through insurance, performance support guarantees, interest rate swaps and inflation hedges. Because of the complexity this process generates, both procurers and suppliers need expensive expert advice. The risk aversion and diffusion and the consequent need for advice add cost to the projects, impacting on the government's economic argument for risk transfer.
Originality/value
The expectation inherent in PPP is that the private sector will better manage those risks allocated to it and because private capital is at risk, financiers will perform due diligence with the ultimate outcome that only viable projects will proceed. This paper presents empirical evidence that raises questions about these expectations.
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Azira Abdul Adzis, Hock Eam Lim, Siew Goh Yeok and Asish Saha
This study investigates factors contributing to residential mortgage loans default by utilizing a unique dataset of borrowers' default data from one of the pioneer lending…
Abstract
Purpose
This study investigates factors contributing to residential mortgage loans default by utilizing a unique dataset of borrowers' default data from one of the pioneer lending institutions in Malaysia that provides home financing to the public. Studies on mortgage loan default have been extensively examined, but limited studies utilize the individual borrower's data, as financial institutions generally hesitant to reveal their customers' data due to confidentiality issue.
Design/methodology/approach
This study uses logistic regression model to analyze 47,158 housing loan borrowers' data for the year 2016.
Findings
The findings suggest that male borrowers, Malay and other type of ethnicity, guarantor availability, loan original balance, loan tenure, loan interest rate and loan-to-value (LTV) ratio are the significant factors that influence mortgage loans default in Malaysia.
Research limitations/implications
Future studies may expand the sample by employing data from other types of financial institutions that would give greater insights as findings might vary due to differences in objectives, functions and regulations. In addition, the findings are subjected to the censoring bias where future studies could perform the survival analysis to control for censoring bias and re-validating the findings of the present study.
Practical implications
The findings provide valuable insights for lending institutions and the government to formulate housing loan policy in Malaysia.
Originality/value
To the best of the authors' knowledge, this is the first study in the context of emerging economies that uses financial institution's internal data to investigate factors of mortgage loan default.
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The purpose of this paper is to report and comment on a High Court ruling where the Court had to decide certain preliminary issues of law arising out of a mis‐selling claim…
Abstract
Purpose
The purpose of this paper is to report and comment on a High Court ruling where the Court had to decide certain preliminary issues of law arising out of a mis‐selling claim brought against Royal Bank of Scotland Plc (hereafter “the Bank”) by Titan Steel Wheels Ltd (hereafter “Titan”) following losses incurred on two Euro/Sterling derivative products provided to Titan by the bank in June and September 2007.
Design/methodology/approach
The paper outlines the facts surrounding the case and comments on the decision.
Findings
The Judge's decision is given on three issues. The first issue – was Titan a “private person”? The second issue – did the Bank act in an advisory role to Titan on the two transactions in issue and hence owe a common law duty of care? The third issue – whether the Bank's terms of business were subject to the Unfair Contract Terms Act 1977?
Originality/value
This case offers interesting insights into the changing nature of the relationship between major corporate users of the derivatives markets with the products traded and business transacted in those markets. It also represents a classic attempt to use the legal system to reallocate losses resulting from the ultimate uncertainty that besets every market place and simply reasserts that ex ante contractual loss allocation agreed between commercial parties will not be lightly set aside.
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An Act to provide for the safety, health and welfare of persons on installations concerned with the underwater exploitation and exploration of mineral resources in the waters in…
Abstract
An Act to provide for the safety, health and welfare of persons on installations concerned with the underwater exploitation and exploration of mineral resources in the waters in or surrounding the United Kingdom, and generally for the safety of such installations and the prevention of accidents on or near them. [27th July 1971]