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Article
Publication date: 17 November 2020

Fredrick Onyango Odhiambo and Radha Upadhyaya

The purpose of this paper is to determine the level of flexibility in loan products offered to smallholder farmers in Siaya County in Kenya and to examine the effect of…

Abstract

Purpose

The purpose of this paper is to determine the level of flexibility in loan products offered to smallholder farmers in Siaya County in Kenya and to examine the effect of flexibility on access to credit.

Design/methodology/approach

The paper uses primary survey data from a sample of smallholder farmers in Siaya County in Kenya who had borrowed from various lending institutions within the study area. The paper develops an index variable of loan flexibility using multiple correspondence analysis (MCA) technique. The model is estimated using both OLS and truncated regression analyses. Access to credit is measured as the amount of loan borrowed by each farmer.

Findings

The authors find that the level of flexibility of loans offered to farmers is low. Furthermore, the authors find that the level of flexibility is not significantly correlated to access to credit. Further analysis using individual components of flexible loans show that refinancing and lines of credit are more likely to improve access to credit when farmers are more educated and wealthier, respectively. The age of a farmer, the type of lender, the type of loan, education and household wealth are the main determinants of access to credit.

Originality/value

The paper adds to the debate on access to credit by showing that theoretically, while loan flexibility should lead to higher credit access, this is not a key determinant of access to credit in this context.

Details

Agricultural Finance Review, vol. 81 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

Open Access
Article
Publication date: 13 June 2022

Zahid Iqbal and Zia-ur-Rehman Rao

To enhance the loan repayment performance of Microfinance Institutions (MFIs) in Pakistan, this study aims to analyze the direct impact of social capital and loan credit…

Abstract

Purpose

To enhance the loan repayment performance of Microfinance Institutions (MFIs) in Pakistan, this study aims to analyze the direct impact of social capital and loan credit terms on loan repayment performance and microenterprises’ business performance while considering the mediating role of microenterprises’ business performance on the relationship between social capital, loan credit terms and loan repayment performance.

Design/methodology/approach

The analysis was conducted based on the data gathered via a questionnaire distributed to 316 microenterprises owners. The respondents were selected using the stratified sampling technique by dividing the target population into three influential groups of manufacturing, trading and services microenterprises. The reliability and validity of the constructs were established using (1) factor loading, (2) Cronbach’s alpha, (3) composite reliability, (4) average variance extracted, (5) the variance inflation factor, (6) the Fornell–Larcker criterion and (7) the heterotrait–monotrait (HTMT) ratio. The structural equation modeling technique was then applied, and the hypotheses were tested based on the structure model generated through bootstrapping by using partial least squares structural equation modeling (PLS-SEM).

Findings

The results confirm the direct impact of social capital and loan credit terms on microenterprises’ business performance and loan repayment performance. It also supports the mediating role of microenterprises’ business performance toward the relationship between social capital, loan credit terms and loan repayment performance while considering the direct impact of microenterprises’ business performance on loan repayment performance.

Originality/value

To date, the direct impact of social capital and loan credit terms on microenterprises’ business performance and loan repayment performance has been hardly investigated in the context of Pakistan. This study also examines the mediating role of microenterprises’ business performance toward social capital, loan credit terms and loan repayment performance. The findings will enable both MFIs and microenterprises to improve their business performance and loan repayment performance through enhanced social ties and the development of more flexible credit products that protect the borrowers’ interests and the interest of lenders.

Details

Journal of Asian Business and Economic Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2515-964X

Keywords

Article
Publication date: 16 November 2012

Sandie McHugh and Rob Ranyard

Information concerning the long‐term consequences of credit repayment decisions is often not available for flexible credit facilities such as credit cards. The purpose of…

1336

Abstract

Purpose

Information concerning the long‐term consequences of credit repayment decisions is often not available for flexible credit facilities such as credit cards. The purpose of this paper is to investigate the role of such information in repayment decisions. A dual mental accounting model of money management predicted that repayments would be influenced by both total cost and loan duration information. Experiment 2 also investigated the role of key economic and psychological factors, including some related to a risk defusing operator model of risk management.

Design/methodology/approach

In two questionnaire‐based experiments bank customers (n=241; 300) were presented with credit card and remortgage repayment scenarios. In both studies, total cost and loan duration information were varied in a 2×2 randomised‐groups factorial design.

Findings

In both studies, analysis of covariance showed that information on the long‐term consequences of repayment decisions lead to significantly higher levels of repayment. However, in Experiment 2, it was found using hierarchical multiple regression that disposable income, level of education, and the perception of, and worry about, repayment difficulties had larger significant effects on repayment levels.

Research limitations/implications

The effects of long‐term consequence information were interpreted in terms of mental accounting and future‐oriented thinking. The effect of concern with future repayment difficulties suggests that borrowers choose lower repayments to control such risks.

Practical implications

Providing total cost and loan duration information for a range of repayment levels could help borrowers make better repayment decisions.

Originality/value

These novel findings contribute to our understanding of borrowers’ repayment behaviour.

Details

Review of Behavioural Finance, vol. 4 no. 2
Type: Research Article
ISSN: 1940-5979

Keywords

Book part
Publication date: 18 October 2011

Jørgen Goul Andersen

This chapter analyses the recovery of the Danish economy from the crisis of the 1980s, its elevation to a bit of an ‘economic miracle’ or at least an ‘employment miracle…

Abstract

This chapter analyses the recovery of the Danish economy from the crisis of the 1980s, its elevation to a bit of an ‘economic miracle’ or at least an ‘employment miracle’ from 1995 to 2005 and its subsequent decline during the financial crisis, which revealed more long-standing problems that precluded a quick recovery. The solution of Denmark's structural balance of payment problems in the early 1990s paved the way for long-term prosperity, and Denmark managed the challenges of globalisation and deindustrialisation almost without social costs. However, an accumulation of short-term policy failures and credit liberalisation facilitated a credit and housing bubble, a consumption-driven boom and declining competitiveness. In broad terms, the explanation is political; this includes not only vote- and office-seeking strategies of the incumbent government but also ideational factors such as agenda setting of economic policy. Somewhat unnoticed – partly because of preoccupation with long-term challenges of ageing and shortage of labour – productivity and economic growth rates had slowed down over several years. The Danish decline in GDP 2008–2009 was larger than in the 1930s, and after the bubble burst, there were few drivers of economic growth. Households consolidated and were reluctant to consume; public consumption had to be cut as well; exports increased rather slowly; and in this climate, there was little room for private investments. Financially, the Danish economy remained healthy, though. Current accounts revealed record-high surpluses after the financial crisis; state debt remained moderate, and if one were to include the enormous retained taxes in private pension funds, net state debt would de facto be positive. Still, around 2010–2011 there were few short-term drivers of economic growth, and rather unexpectedly, it turned out that unemployment problems were likely to prevail for several years.

Details

The Nordic Varieties of Capitalism
Type: Book
ISBN: 978-0-85724-778-0

Article
Publication date: 17 July 2009

Muhammad Azizul Islam and Martin Reginald Mathews

The aim of this paper is to establish a linkage between negative global media news towards Grameen Bank (GB), the largest microfinance organisation in the developing…

1516

Abstract

Purpose

The aim of this paper is to establish a linkage between negative global media news towards Grameen Bank (GB), the largest microfinance organisation in the developing world, and the extent and type of annual report social performance disclosures by GB, over the nine‐year period 1997‐2005.

Design/methodology/approach

Content analysis instruments are utilised to analyse GB annual report social disclosure.

Findings

The study finds that GB's community poverty alleviation disclosures account for the highest proportion of total social disclosures in the period 1997‐2005. The results of this study are particularly significant in relation to poverty alleviation – the issue attracting severe criticism from the Wall Street Journal (WSJ ) late in 2001. The community poverty alleviation disclosures by GB are significantly greater over the four years following the negative news in the WSJ than in the four years before. The results suggest that GB responds to a negative media story or legitimacy threatening news via annual report social disclosures in an attempt to re‐establish its legitimacy.

Originality/value

This paper contributes to the literature because in the past there has been no research published linking global media attention to the social disclosure practices of major organisations in developing countries.

Details

Asian Review of Accounting, vol. 17 no. 2
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 5 February 2021

Iftekhar Ahmed and Md Humayun Kabir

The paper deals with the challenges and opportunities of enabling resilience of the built environment through building regulations and codes in a developing country…

Abstract

Purpose

The paper deals with the challenges and opportunities of enabling resilience of the built environment through building regulations and codes in a developing country context. The purpose of this paper is to explore how voluntary compliance can be achieved, drawing from the views of key stakeholders in this field.

Design/methodology/approach

Dhaka, the capital city of Bangladesh, is a central hub of more than 20 million people. The city is growing rapidly in an unplanned manner to host the increasing population, creating vulnerability to different hazards including earthquakes, fires and building collapses. The Bangladesh National Building Code (BNBC) and the building and planning regulations of the Capital Development Authority are the key instruments for ensuring safety, but lack of compliance is widespread. The views of relevant stakeholders on issues relating to compliance of safe building codes for ensuring disaster resilience were documented and analysed.

Findings

It was found that those involved in construction activities are in most cases not aware of the BNBC; landowners were reluctant to follow regulations and codes to avoid extra cost; and construction workers were not interested in compliance as there were no incentives. While enforced deterrence is required, it has its limitations in a context such as Dhaka. Raising awareness and building capacity at all levels can offer a way forward for voluntary compliance. Incorporation of knowledge on regulations and codes for disaster resilience into university and technical education curricula are likely to allow developing the capacity of built environment professionals and widespread awareness can be raised through training, media and public events.

Originality/value

There are many publications on building regulations and codes, but few specifically focussing on disaster resilience. Also, much of the discussion on regulations and codes deals with compliance through enforcement, but hardly any deal with the idea of voluntary compliance. There are also a lot of publications on disasters in the case study city, Dhaka, but comparatively few on building codes and regulations specifically for disaster resilience.

Details

International Journal of Disaster Resilience in the Built Environment, vol. 12 no. 5
Type: Research Article
ISSN: 1759-5908

Keywords

Article
Publication date: 16 February 2022

Yaqin Yuan and Wei Li

This study aims to investigate the impact of supply chain risk (SCR) information processing capabilities (e.g. SCR information sharing and SCR information analysis) and…

Abstract

Purpose

This study aims to investigate the impact of supply chain risk (SCR) information processing capabilities (e.g. SCR information sharing and SCR information analysis) and supply chain finance (SCF) on supply chain resilience, as well as the moderating effect of environmental uncertainty in the relationship between SCF and supply chain resilience.

Design/methodology/approach

This paper proposes a theoretical model grounded on the information processing theory. Data collected from 216 Chinese firms are used to test the theoretical model by employing structural equation modelling.

Findings

The findings reveal that SCR information processing capabilities have a significant impact on both SCF and supply chain resilience. SCF plays a partial mediating role in the relationship between SCR information processing capabilities and supply chain resilience. In addition, environmental uncertainty moderates the relationship between SCF and supply chain resilience.

Originality/value

First, this paper enriches the knowledge of how information processing capability affects SCF and supply chain resilience as the study considers the more granular SCR information rather than general information that has been discussed in previous studies. Second, this is one of the first papers to establish the relationship between SCF and supply chain resilience in emerging economies. Next, the paper extends the theoretical framework of the antecedents and consequences of SCF. Moreover, the study further facilitates the understanding of the role of the external environment in SCR and SCF management.

Details

Journal of Enterprise Information Management, vol. 35 no. 6
Type: Research Article
ISSN: 1741-0398

Keywords

Article
Publication date: 26 July 2013

Ron Weber and Oliver Musshoff

Using a unique dataset of a commercial microfinance institution (MFI) in Madagascar, the purpose of this paper is to investigate how credit access probabilities and loan

2713

Abstract

Purpose

Using a unique dataset of a commercial microfinance institution (MFI) in Madagascar, the purpose of this paper is to investigate how credit access probabilities and loan volume rationing magnitudes for farmers change if the MFI switches to offer flexible microfinance loans, which can account for agricultural production specifics.

Design/methodology/approach

The authors estimate probit models for the probability of receiving a loan and Heckman models to investigate the magnitude of volume rationing for all micro loan applications and disbursements of the MFI, differentiating between farmers with standard microfinance loans and farmers with flexible microfinance loans.

Findings

The results reveal that agricultural firms with flexible microfinance loans have significantly higher credit access probabilities than non‐agricultural firms and agricultural firms with standard microfinance loans. Furthermore, it was found that agricultural firms with flexible microfinance loans are stronger volume rationed than non‐agricultural firms and agricultural firms with standard microfinance loans.

Research limitations/implications

Even if the authors can show that access to credit for agricultural firms in Madagascar can be enhanced by the provisioning of flexible microfinance loans, the investigated MFI only introduced flexible microfinance loans in 2011 and currently only offers them through five branch offices. Thus, the product is new to the MFI, and results might change with increasing outreach to other geographic regions in Madagascar. Furthermore, the conditions for agricultural production in Madagascar are unique, and the results might change in different country contexts.

Practical implications

The paper's findings suggest that flexible microfinance loans can contribute to the financial inclusion of farmers with seasonal production types. They also suggest that standard microfinance loans seem to be adequate for farmers with less seasonal production types, e.g. animal husbandry.

Originality/value

To the best of the authors' knowledge, this is the first paper to investigate the effects of flexible microfinance loan provision for credit access of small agricultural firms in developing countries in general, and in Madagascar in particular.

Details

Agricultural Finance Review, vol. 73 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

Case study
Publication date: 20 January 2017

Sergio Rebelo

California telecommunications company Wireworld is considering an acquisition of Nusantara Communications, a subsidiary of Indonesian conglomerate Bakrie & Brothers…

Abstract

California telecommunications company Wireworld is considering an acquisition of Nusantara Communications, a subsidiary of Indonesian conglomerate Bakrie & Brothers. Nusantara had invested $50 million in developing the advanced rural telephone system, which had the potential to provide much-needed telecommunications services to the mostly rural Indonesian population. If if were exported, the worldwide market for this product in the next five years was projected to be in the billions. Should Wireworld acquire this small company halfway around the world? Was it prepared to enter the Indonesian marketplace and beyond?

Students will examine a variety of data, including financial projections, in order to decide whether acquiring Nusantara will add value to Wireworld.

Details

Kellogg School of Management Cases, vol. no.
Type: Case Study
ISSN: 2474-6568
Published by: Kellogg School of Management

Keywords

Article
Publication date: 26 November 2021

Yaqin Yuan, Linlin Liu and Liu Liu

This paper aims to investigate the relationship between information integration, supply chain capabilities and credit quality of small and middle enterprises (SMEs) in…

Abstract

Purpose

This paper aims to investigate the relationship between information integration, supply chain capabilities and credit quality of small and middle enterprises (SMEs) in supply chain finance (SCF).

Design/methodology/approach

Grounded in the resource-based view (RBV) and signaling theory, this study proposes a theoretical model. Then, structural equation modeling and interview analysis are employed to test the theoretical model.

Findings

The results show that both two aspects of information integration, namely, information technology and information sharing, have positive effects on the SMEs’ credit quality in SCF, and these effects are mediated by supply chain capabilities.

Originality/value

First, the paper contributes to SCF literature by simultaneously examining the role of two dimensions of information integration (information technology and information sharing) in enhancing SMEs’ credit quality. Second, this paper enriches the existing theoretical research on SCF by integrating the SMEs perspective and SCF service provider perspective. Moreover, this paper explores the indirect effects of information integration on SMEs’ credit quality by incorporating supply chain capabilities as a mediating factor.

Details

Industrial Management & Data Systems, vol. 122 no. 2
Type: Research Article
ISSN: 0263-5577

Keywords

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