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With a population of over 150¹ million, Bangladesh provides a large consumer market for potential industries. Moreover, it holds one of the lowest wage structures in the world. The comparative advantage of Bangladesh lies primarily in its agro-processing industries. But besides agriculture, the rural-based microenterprise (MEs) sector in Bangladesh is a potentially lucrative field of investment (IPPF, 2001). In spite of its major contributions toward economic development, the rural-based microentrepreneurs in Bangladesh suffer from lack in working capital, institutional credit facilities, and poor management. There are many formal and informal financing organizations that are functioning in the money market of Bangladesh. Formal financing institutions like government and privately owned commercial banks normally give loans to large- and medium-scale industries (Alam, 2009). Cooperative banks in the country, although giving loans to the rural-based microenterprises, confine their credit giving activities mainly to the members of the bank (BIDS, 1981, 1988, 1989, 1990). One of the specialized and well-known microcredit giving organizations in Bangladesh called “Grameen Bank” (Yunus, 1993; Nabi, 1990) also gives microcredit to the rural-based microentrepreneurs, especially to the rural poor women. Besides many NGOs, moneylenders in rural Bangladesh are also an important source of lending funds to the rural-based microentrepreneurs.

The aim of this study is to understand the determinants of relationship between banks and nonfinancial corporations within Poland (which are considered relationship banking from this point onward).

The main sources of data used in the study are the large credit database (credit register of the National Bank of Poland (NBP)) and other aggregated data, including data from the Warsaw Stock Exchange and the NBP. Econometric panel logit methods have been used to test how different factors affect bank–firm relationships. Three main groups of factors have been investigated: the characteristics of the firm (i.e., size, ownership type, and R&D activity); the characteristics of the financial sector (i.e., competition in the banking sector); and macroeconomic conditions.

The findings demonstrate that Polish firms readily establish single-bank relationships, and firms with the highest quality of credit portfolios borrow often from multiple creditors. All conducted estimations demonstrated that the relationship between financing from a single bank and from foreign capital had a positive sign. Also, a decrease in concentration in the banking sector, which may be identified with an increase in competition, supports the establishment of relationship banking.

The study was performed using the data from large exposure database collected for supervisory purposes. Exposures (credits, derivatives, etc.) larger than 500 thousand PLN (approx. 120 thousand EUR) were only considered. Future research on bank–firm relationships should focus on the influence of financing costs, maintaining relationships when the borrower is in a difficult financial position, and other unique features of banks using the strategy of relationship financing.

The understanding of the characteristics of bank–firm relationships can help to improve banking practice and supervisory policy in Poland.

This study makes a noticeable contribution to the understanding of the banking sector and its relationships with nonfinancial corporations in Poland. It is the first empirical study on such a large sample of panel data from Polish banking sector and industries, too.

The aim of writing this paper is to demonstrate how societal sector institutions influence the lender‐borrower network relationships.

The objectives are achieved by analyzing data based on an “Institutional Network” theoretical frame of references. The methodological approach used in the research is of a qualitative nature.

The research result shows that the societal sector institutions, like country culture, religion, political system, legal system, government, and family/clan, have direct and indirect impact on the lender‐borrower network relationship, especially in the case of financing rural‐based small and cottage industries by interest‐free banks.

The ideas of an interest‐free banking system and its financing towards rural‐based small and cottage industries. The research is useful both to financing organizations based on interest free principles and also to small and cottage industry owners in developing as well as developed nations, where this specific financing system is working.

The purpose of this paper is to demonstrate a comparative study of financing small and cottage industries (SCIs) by interest‐free banks in different countries like Turkey, Cyprus, Sudan and Bangladesh.

The objectives are achieved by analyzing data based on an “institutional network” theoretical frame of references. The methodological approach used in the research is of a qualitative nature.

The research result shows that the lender–borrower network relationship, especially in case of financing rural‐based SCIs by interest‐free banks, differ from one country to the other even though the basic principles of interest‐free financing remains the same.

The ideas of interest‐free financing system (IFS) and its specific mode of lending funds towards rural‐based SCIs. The research is useful to both financing organizations based on interest‐free principles also small and cottage industry owners in developing as well as developed nations, where the Shariah‐based IFS is working.

The purpose of this paper is to investigate the lender-borrower relationship as it relates to Sannong loans for agricultural and rural financial markets by Rural Credit Cooperatives (RCCs) and other rural lenders. This paper is motivated by recent reforms to the rural credit market designed to encourage increased lending, particularly to farmers. Little is understood about the lender-borrower relationship in rural China. This paper fills that gap.

The paper investigates relational attitudes between 120 loan officers at RCCs in China's costal Shandong province, paired with a field survey using matched questions to 394 farm households in the same region. Pairing lenders’ perception toward borrowers regarding RCC microcredit lending mechanism, against borrowers’ perception toward lenders and how themselves were perceived by lenders in the same regards, the paper investigates the degree of disconnect between lenders and with distinct cluster groupings based on their perceptions, the paper analyzes the influence of demographics on the borrower and lender cluster memberships.

The paper identifies four borrower clusters and two lender clusters. Borrower clusters are segmented on credit access and satisfaction with their rural lender. The paper also identifies two lender clusters, segmented principally on financial incentives and lending activities. While all lenders view farming with higher regard than farmers believe they do, one cluster is clearly pro-farmer while the second is somewhat indifferent. Indifference is more related to current portfolio activities. The paper draws conclusions that policy initiatives should be put in place at RCCs that close the gap between lender and borrower in their credit relationship. Rural lenders should concentrate on advocating RCCs’ care and trust toward agriculture and farm households. At the institutional level, effort should be extended to train a dedicated team of loan officers that specialize in servicing farm households with standardized lending practices. This research provides financial institutions with outreach mechanisms to borrowers, while also training lenders to borrowers’ sensitivities.

Management studies of RCCs are few. This is the first paper that the authors are aware of that studies farmer and lender attitudes on the same scale.

This paper examines the influence of relationship lending on the financial performance of Savings and Credit Co-operative Societies (SACCOS) in Tanzania.

A panel data of 460 observations representing 115 SACCOS from Tanzania was used. Descriptive statistics and panel regression models were employed to analyse the data.

The results show that the duration of the relationship is negatively and significantly related to SACCOS financial performance, substantiating the relationship lending theories. The number of relationships has an insignificant effect on financial performance.

The study focused on the duration and the number of relationships as aspects of relationship lending. The paper is limited in the sense that other aspects of relationship lending such as the concentration of relationships that could affect financial performance are not included in this study. The results apply to SACCOS and not to other microfinance institutions with strong bargaining power.

This study positions relationship lending in the SACCOS context where the market for the wholesale loan is less competitive.

The purpose of the paper is to present the result of an empirical review as to how and to what extent the interest‐free microfinance to micro entrepreneurs contributes in minimising different cots of both the lender and the borrowers. An institutional‐network theoretical approach is used to study the phenomenon. A qualitative nature of research methodology is used while studying this particular phenomenon. A multiple explanatory case study was adopted as a research strategy in order to focus on contemporary phenomenon within the real life context of different rural‐based micro entrepreneurs and their relationships with the lending organisations. Interest‐free microfinance by Islamic banks is characterised by a close supervision and an in‐kind type of financing, which contributes greatly in promoting lender‐borrower network relationships between the bank and the rural based micro entrepreneurs. Such network relationships result in minimising exchange costs and other business related costs of both the borrowers and the lending organisations. The study was mainly concerned with rural‐based micro entrepreneurs who are engaged in grass‐root type entrepreneurs like poultry and diary firm, handloom industry, etc. Particular reference is made here to the facts of rural‐based micro entrepreneurs and their relationships with Islamic banks in Bangladesh.

Points out that the small and cottage industry (SCI) sector is often neglected despite its potential for contributing to economic development, especially in the third world; and reports an investigation of the use of the Bai‐Muajjal (BM) method of financing in the Bangladesh SCI sector. Explains the theoretical basis and methodology of the study, the possible sources of funds for SCI owners, the particular characteristics of Islamic banks and the fund investment methods they offer. Describes the BM lending activities of one such bank with 40 “grass root level” SCIs (poultry farming and handloom industry), which require borrowers to create groups, undergo monitoring and open savings accounts; and assesses their effects on SCI owners’ saving habits and the mobilization of savings towards productive ends. Identifies many social and economic advantages in the BM system and welcomes it as a way to channel savings productively and reduce poverty.

Organic outputs have been increasing at much lower rates than growth in consumer demand. Organic farmers’ debt aversion hinders them from obtaining business funds through borrowing. The purpose of this paper is to clarify that the farmers’ reluctance to use debt as a funding option can be more attributed to gaps in existing borrower-lender relationships, beyond sustainability principles.

Empirical evidence collected from organic farmers and farm lenders establish differing expectations and perceptions that reinforce the organic farmers’ debt aversion. The farm lender survey data set was analyzed using the Heckman approach applied to two lenders’ decisions: their interest in lending to organic farm borrowers and loan amounts approved for successful loan applicants. The econometric results were reconciled with the compiled inputs provided by organic farmers interviewed.

Results validate the farmers’ lower reliance on loans due to suspicions that lenders lack knowledge and consideration of organic farming conditions and principles. Farm lenders must depart from employing a uniform credit risk appraisal model and adopt borrower-specific versions of the model, but not necessarily delineating organic-conventional farming dichotomy that may not substantially affect credit risk measurement. Organic farms, on the other hand, need to better understand the credit risk appraisal principles and use their inherent business strengths to compete for loans with conventional farms without any special consideration.

Borrower-lender relationships can improve if information gaps between lenders and borrowers can be minimized with more extensive outreach education efforts. Better relationships would increase organic farms’ credit access to effectively address an impending supply gap in an expanding industry.

To the knowledge, a specific focus on organic farms in understanding farm borrower-lender relationships has never been explored in literature.

The purpose of this paper is to examine the use of single vs multiple lenders by Kansas farms. Previous studies suggest that as the risk level of the firm changes, borrowers desire to enhance the probability of obtaining credit at the lowest possible cost may cause them to use multiple lenders.

A model is adopted from the banking literature to describe farm behavior in obtaining credit from a single vs multiple lenders. Using farm-level data from the Kansas Farm Management Association, an empirical model analyzes how farm characteristics affect the number of lending relationships. A model is developed to analyze the number of lending relationships effect on the profitability of the farm.

It is found that highly leveraged farms seek additional lending relationships supporting the theoretical model and that additional lending relationships correlate to a decrease in profitability. Roughly, 50 percent of Kansas farmers that borrow use a single lender. Roughly 48 percent use from two to four lenders, with the remaining 2 percent using more than four lenders.

Provides empirical results to support developed theoretical framework on the number of lending institutions. This study helps understand factors correlated to a farmer's decision to use multiple lenders. Analyzing the number of lending relationships helps understand how farmers manage their debt to maintain access to credit when needed at the lowest possible cost.