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Article
Publication date: 2 November 2020

Pablo Farías

This study identifies the factors that affect the knowledge of mortgage loans' total cost.

Abstract

Purpose

This study identifies the factors that affect the knowledge of mortgage loans' total cost.

Design/methodology/approach

Empirical research utilizing a survey administered through in-home interviews was conducted. This study adopts the elaboration likelihood model (ELM) theory to analyze the influence of information shortcuts and borrowers' abilities and motivations on the knowledge of mortgage loans' total cost.

Findings

The results support that the use of the price–quality cue and brand credibility have negative and positive effects, respectively, on the knowledge of mortgage loans' total cost. Households' primary income earners have a higher knowledge of mortgage loans' total cost. The results also show that the household's primary income earners who are price conscious and brand nonbelievers have more knowledge of mortgage loans' total cost.

Originality/value

Price knowledge studies in financial services, especially in the mortgage loan industry, are scarce. Consequently, understanding the price knowledge level for mortgage loans and its potential antecedents has been insufficient.

Details

International Journal of Bank Marketing, vol. 39 no. 1
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 3 April 2018

Margaret Kristin Merga and Saiyidi Mat Roni

This paper aims to provide insights into the characteristics of avid non-fiction book readers, exploring their typical demographic characteristics in relation to reading…

Abstract

Purpose

This paper aims to provide insights into the characteristics of avid non-fiction book readers, exploring their typical demographic characteristics in relation to reading volume and frequency. It also investigates their comparative library usage in relation to avid fiction readers, as well as their motivation to read, and barriers to reading. Findings from the subset of self-identified avid non-fiction readers from the 2015 International Study of Avid Book Readers are interrogated to provide insights into this under-researched group.

Design/methodology/approach

The authors have used a single-stage mixed-methods approach, using data from both qualitative and quantitative items in an international survey.

Findings

The quantitative data analysis of this study suggests that avid non-fiction book readers were more likely to be men and older than avid fiction readers, and that they also tended to read less frequently, though avid non-fiction readers tended to read a greater volume of books. Avid fiction readers reported greater library usage, and thus unsurprisingly were found to have a greater borrowing tendency than non-fiction readers. Our qualitative findings around reading motivation identified a range of recurrent themes. The authors also found three key barriers to reading: time, book access and concentration.

Originality/value

The findings of this study provide unique insights into the characteristics, preferences and motivation of avid non-fiction readers, with the relationship between pleasure and the reading of non-fiction of particular interest.

Details

Collection and Curation, vol. 37 no. 2
Type: Research Article
ISSN: 2514-9326

Keywords

Book part
Publication date: 2 March 2011

Ki C. Han, Sukhun Lee and David Y. Suk

When faced with a financial crisis, debtor countries rarely choose to default on their international financial obligations. Instead, they typically choose to renegotiate…

Abstract

When faced with a financial crisis, debtor countries rarely choose to default on their international financial obligations. Instead, they typically choose to renegotiate their debt service obligations. According to a number of economists, the main motivating factor behind borrowers' and creditors' willingness to restructure is the benefit associated with preserving international trade ties. This raises an interesting question: is the benefit associated with maintaining international trade ties shared equally between the borrower and creditor banks? Or is the outcome dependent on a so-called ‘bargaining game’ between the borrower and creditor banks, and if so, can we identify these variables? According to our analysis, as a borrower's trade ties with developed countries strengthen, the borrower's (and/or creditor's) bargaining power diminishes (strengthens) and it thereafter agrees to restructure at less favourable terms. However, even after controlling for trade ties, we found that major borrowers were able to extract more concessions from the lenders.

Details

The Impact of the Global Financial Crisis on Emerging Financial Markets
Type: Book
ISBN: 978-0-85724-754-4

Keywords

Book part
Publication date: 2 December 2013

Angelina Nikitenko Christie

To provide a selective review of most recent developments in experimental economics of banking and lending and to summarize and synthesize the experiment designs and…

Abstract

Purpose

To provide a selective review of most recent developments in experimental economics of banking and lending and to summarize and synthesize the experiment designs and results in banking under asymmetric information.

Methodology

The review includes recently published or working papers (2006–2013) that exclusively employ experimental economics methodology, especially for studying the impact of formal or informal institutions on lending in credit markets.

Findings

The results of the reviewed experimental studies provide support for the important role of both informal (e.g., relationship banking and reputation) and formal (e.g., third-party enforcement; collateral) institutions and their impact on credit market performance, as well as the importance of studying the interaction of the two types of institutions.

Research limitations/implications

The number of studies reviewed is fairly small but growing, indicating that this is the area of growing significance.

Practical implications

Controlled economic experiments are better able to address the questions regarding the direction of causality in empirical relationships. Economic experiments are particularly useful in studying complex markets like credit and capital and in eliciting specific effects of institutions on credit market performance. Such well-established empirical relationships will be able to provide guidance for policy making for financial market reform.

Originality/value

This is the first review of laboratory research in banking and lending under asymmetric information that aims to call attention to this area of research and serves as a starting point for an interested researcher and provide future direction.

Details

Experiments in Financial Economics
Type: Book
ISBN: 978-1-78350-141-0

Keywords

Article
Publication date: 14 May 2019

Amber Gul Rashid and Lalarukh Ejaz

The purpose of this study is to examine the impact of interest free micro credit loans on the lives and business of the female borrowers.

Abstract

Purpose

The purpose of this study is to examine the impact of interest free micro credit loans on the lives and business of the female borrowers.

Design/methodology/approach

Both primary and secondary data have been used. Case studies of four different female entrepreneurs have been included as part of the research. The observation was conducted over an extended period of time. Subsequently, interviews were conducted with four beneficiaries to know the role played by interest free micro credit loans in improving (or not!) their lives and businesses.

Findings

Interest free micro credit loans played a significant role in bringing a positive change in the lives of the borrowers. Clients mentioned that “zero interest rate” and “flexible repayment schedules” were the main reason for obtaining loans from this source. Further, they suggested that there is a need for training/workshops, feedback/monitoring, networking and online repayment system to make interest free micro credit loans more successful.

Research limitations/implications

The focus of the study is limited to only four female borrowers in Karachi. Future studies can include other cities and cross-gender comparisons for better understating.

Practical implications

This study will help microfinance organizations to assess the problems faced by the borrowers; it will also shed light on the motivations of borrowers.

Originality/value

Interest free micro credit loans were provided to women entrepreneurs in a social experiment and implications were observed.

Details

Journal of Islamic Marketing, vol. 10 no. 3
Type: Research Article
ISSN: 1759-0833

Keywords

Article
Publication date: 8 April 2014

Emmanuel Dechenaux, Aaron Lowen and Andrew Samuel

The aim of this paper is to study the role of bribery in subsidized credit markets in developing countries. First, the authors use the data to test whether more productive…

373

Abstract

Purpose

The aim of this paper is to study the role of bribery in subsidized credit markets in developing countries. First, the authors use the data to test whether more productive borrowers will pay larger or smaller bribes since the theoretical literature offers conflicting findings regarding the relationship between the size of the bribe and the productivity of borrowers. Second, the authors test whether being eligible to borrow from a microfinance institution affects the frequency or the magnitude of the bribe paid when borrowing from a (non-microfinance) subsidized bank.

Design/methodology/approach

The empirical analysis is based on existing theoretical models of bribery. The data set uses publicly available survey data from the Bangladesh Institute for Development Studies. The primary linear model is estimated using OLS. Because left-censoring affects the data, the authors also estimate a Tobit model. Finally, to correct for potential selection bias, the authors also estimate a Heckman selection model.

Findings

The authors find that more productive borrowers pay lower bribes than less productive borrowers and that being MFI-eligible affects the frequency of bribery, but not the magnitude of the bribe.

Originality/value

To the authors' knowledge, the paper is the first empirical study of bribery in subsidized credit markets.

Details

Indian Growth and Development Review, vol. 7 no. 1
Type: Research Article
ISSN: 1753-8254

Keywords

Article
Publication date: 1 November 2008

Kien Tran Nguyen and Makoto Kakinaka

This paper analyzes an individual lending credit market in a rural society, where potential borrowers have a dynamic incentive of strategic default, and a benevolent…

Abstract

This paper analyzes an individual lending credit market in a rural society, where potential borrowers have a dynamic incentive of strategic default, and a benevolent lender gives them a credible threat to cut future credit when loands are not repaid. A crucial issue is that social sanction of default depends on the default rate in the society. Our analysis suggests that for a relatively small financing cost, a credit market exists where borrowers have little motivation to default voluntarily, associated with intense social sanctions. The results also reveal that a relatively large financing cost causes the credit market to collapse, since it raises motivation of default, associated with less intense social sanctions. These results could justify government support to reduce the lender’s financing cost. The model further illustrates the plausibility of two equilibria: a low default rate associated with a low lending rate and intense social sanctions, and a high default rate with a high lending rate and less intense social sanctions. This could explain the possibility that the default rate is different from village to village even though these societies seem to share an almost identical environment.

Details

Agricultural Finance Review, vol. 68 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 1 February 2022

Kanwal Anil and Anil Misra

This is an original piece of research holding the promise to position itself as a pioneering research to showcase the evolving role of Artificial intelligence (AI) in the…

Abstract

Purpose

This is an original piece of research holding the promise to position itself as a pioneering research to showcase the evolving role of Artificial intelligence (AI) in the Indian peer-to-peer lending (P2P) markets. The research effectively uses the holistic multiple case study design to highlight the phenomenon of how AI as the holy grail of investments is proving to be a game changer for the Indian P2P markets.

Design/methodology/approach

The study uses a unique research design and curates six Indian licensed Non-Banking Financial Company (NBFC)-P2P as exemplary cases to cull out unique contextual findings on how AI has penetrated the Indian P2P market and road ahead. The research is based on a total of 18 semi-structured interviews of six NBFC-P2P founders and 12 Fintech and P2P industry experts. These interviews were used as alternate sources of evidence for data triangulation along with within case analysis, cross-case analysis to achieve well-rounded results.

Findings

The findings have been propounded in the form of unique, context specific results achieved with a bouquet of six NBFC-P2P cases and supplemented through triangulation of data done through multiple industry experts. Findings indicate that AI has reached that tipping point in India.

Research limitations/implications

There is a scope of further refinement of our results with a larger sample size. Therefore future researches could consider conducting a comprehensive study including all existing NBFC-P2Ps in the space.

Practical implications

The research builds perspective for improving the practice in many ways. It shows the way to the other P2Ps still stuck to manual underwriting and see merit in AI-driven processes. It would guide them to embrace new technology driven business models to enhance customer experience and champion service transformation by making financial processes faster and secure. It also highlights how some of the P2Ps are scaling up and improving their visibility and outreach through strategic partnerships.

Social implications

The research would assist in creating awareness about the unique P2P sector and AI solutions for individual investors, particularly the “new to credit customers” and “thin file borrowers”. AI led initiatives in the P2P space validate a certain amount of sophistication thereby giving sanctity to the sector and would therefore enforce confidence in the minds of new age investors and borrowers.

Originality/value

This original research unravels avenues for novel and untraversed area in the Indian settings where paucity of extant literature and structured data highlighted a research gap and hence necessitated this study. AI as a form of disruptive innovation offering predictive intelligence to the Indian P2P space and empowering it with process efficiency, cost optimization and client engagement is definitely paving the way for an exponential growth in the Indian Fintech Industry.

Details

International Journal of Emerging Markets, vol. 17 no. 4
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 26 February 2018

Simplice Asongu and Jacinta Nwachukwu

The purpose of this paper is to investigate how bank size affects the role of information asymmetry on financial access in a panel of 162 banks in 39 African countries for…

Abstract

Purpose

The purpose of this paper is to investigate how bank size affects the role of information asymmetry on financial access in a panel of 162 banks in 39 African countries for the period 2001-2011.

Design/methodology/approach

The empirical evidence is based on instrumental variable fixed effects regressions with overlapping and non-overlapping bank size thresholds to control for the quiet life hypothesis (QLH). The QLH postulates that managers of large banks will use their privileges for private gains at the expense of making financial services more accessible to the general public. Financial access is measured with loan price and loan quantity whereas information asymmetry is implicit in the activities of public credit registries and private credit bureaus.

Findings

The findings with non-overlapping thresholds are broadly consistent with those that are conditional on overlapping thresholds. First, public credit registries have a decreasing effect on the price of loans with the magnitude of reduction comparable across all bank size thresholds. Second, both public credit registries and private credit bureaus enhance the quantity of loans. Third, compared with public credit registries, private credit bureaus have a greater influence in increasing financial access because they have a significantly higher favorable effect on the quantity and price of loans Fourth, the QLH is not apparent because large banks are not associated with lower levels of financial access compared to small banks.

Originality/value

Studies of public credit registries and private credit bureaus in Africa are sparse. This is one of the few to assess linkages between bank size, information asymmetry and financial access.

Details

International Journal of Managerial Finance, vol. 14 no. 2
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 11 March 2022

Md Aslam Mia, Gary John Rangel, Mohammad Nourani and Rajesh Kumar

Measuring the success of microfinance institutions (MFIs) using a single efficiency value and then exploring its determining factors might be misleading. Hence, this study…

Abstract

Purpose

Measuring the success of microfinance institutions (MFIs) using a single efficiency value and then exploring its determining factors might be misleading. Hence, this study decomposed the efficiency measure into three divisions, namely operational, financial sustainability and social outreach. Subsequently, the authors identified factors affecting these efficiencies in the second stage regression analysis.

Design/methodology/approach

This study employed the network data envelopment analysis approach to evaluate each division of efficiency of 90 MFIs from 2013 to 2018 and used second-stage regression techniques (Tobit and Truncated) to examine the effect of institutional factors.

Findings

The authors’ efficiency analysis revealed that financial sustainability and social outreach were responsible for the low overall efficiency. The second stage analysis revealed the negative influence of institutional factors such as efficiency wage (particularly among small MFIs) on financial sustainability, social outreach and overall efficiencies. Staff turnover reduced operational, financial and overall efficiencies, particularly for large MFIs. The presence of female board members and staff improved the efficiency of MFIs, thus highlighting the pivotal role of women in the success of MFIs. Besides, the effects of regional location of MFIs, regulation and legal status on efficiencies were further discussed.

Originality/value

The study has uniquely evaluated three different types of efficiency in MFIs and employed conventional techniques for the second-stage regression to identify the determinants of efficiency. The findings will enable managers to make appropriate decisions to enhance their organisational efficiency.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

Keywords

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