Search results

Personal bankruptcy is on the rise in Malaysia. The Insolvency Department of Malaysia reported that personal bankruptcy has increased since 2007, and the total accumulated personal bankruptcy cases stood at 131,282 in 2014. This is indeed an alarming issue because the increasing number of personal bankruptcy cases will have a negative impact on the Malaysian economy, as well as on the society. From the aspect of individual’s personal economy, bankruptcy minimizes their chances of securing a job. Apart from that, their account will be frozen, lost control on their assets and properties and not allowed to start any business nor be a part of any company’s management. Bankrupts also will be denied from any loan application, restricted from travelling overseas and cannot act as a guarantor. This paper aims to investigate this problem by developing the personal bankruptcy prediction model using the decision tree technique.

In this paper, bankrupt is defined as terminated members who failed to settle their loans. The sample comprised of 24,546 cases with 17 per cent settled cases and 83 per cent terminated cases. The data included a dependent variable, i.e. bankruptcy status (Y = 1(bankrupt), Y = 0 (non-bankrupt)) and 12 predictors. SAS Enterprise Miner 14.1 software was used to develop the decision tree model.

Upon completion, this study succeeds to come out with the profiles of bankrupts, reliable personal bankruptcy scoring model and significant variables of personal bankruptcy.

This decision tree model is possible for patent and income generation. Financial institutions are able to use this model for potential borrowers to predict their tendency toward personal bankruptcy.

Create awareness to society on significant variables of personal bankruptcy so that they can avoid being a bankrupt.

This decision tree model is able to facilitate and assist financial institutions in evaluating and assessing their potential borrower. It helps to identify potential defaulting borrowers. It also can assist financial institutions in implementing the right strategies to avoid defaulting borrowers.

The purpose of this paper is to study the determinants of the use of personal loans in small and medium‐sized enterprises (SMEs).

Personal loans are addressed as a function of the borrower and collateral. To empirically test the hypothesis of this study, a probit model was applied to a group of companies in Bahia Blanca, Argentina, with a previous analysis of the possible effects of sample selection.

Older companies, firms with lower expected growth rates, younger owners, those who seek to create value or growth, and owners who perceive low emotional costs associated with bankruptcy, are less likely to use personal loans to finance their operations.

This study is limited by the availability of data on SMEs in Argentina.

The results highlight the importance of financial aid programmes that focus on SME scarce availability of collateral.

This study makes three principal contributions: first, it investigates the phenomenon of personal loan utilisation in SMEs; second, it analyses financing decisions from both the supply and demand perspectives; and third, it presents a database that includes variables that have not been previously studied in Argentina or other emerging economies.

This study investigates the borrowing behaviour of public sector employees in Malaysia by focusing on religious belief and psychological factors. The first objective of the study is to examine the differences in the borrowing behaviour according to demographic and socioeconomic factors of the civil servants. The second objective of the study is to investigate the influence of religious belief, excessive consumption, materialism and financial literacy towards two aspects of borrowing behaviour: personal loans and credit card usage.

Primary data was collected using a digital survey which was distributed using a convenience sampling approach to public sector employees working in Putrajaya and Kuala Lumpur, Malaysia. A sample of 340 public sector employees was obtained for analysis.

The study found that civil servants of different education backgrounds and income levels tend to differ in their borrowing behaviour. Specifically, those with lower levels of education, or lower income levels, tend to have a higher tendency of borrowing through personal loans. Multiple regression analyses reveal that public sector employees with either higher religious belief or higher financial literacy have a lower tendency of borrowing either through credit cards or personal loans. However, those who spend excessively or those who have higher levels of materialism tend to display more aggressive borrowing behaviour in terms of credit card usage and personal loans.

The study contributes to the literature by exploring the role of religious belief on borrowing behaviour. In addition, the study contributes to the literature by examining a specific group in the Malaysian society, i.e. public sector employees, due to the perturbing state of indebtedness among civil servants in Malaysia.

Knight's Industrial Law Reports goes into a new style and format as Managerial Law This issue of KILR is restyled Managerial Law and it now appears on a continuous updating basis rather than as a monthly routine affair.

The purpose of this paper is to examine the use of emotional appeals in advertisements for loans and explored consumers’ perceptions of advertisements featuring such appeals in order to explore how emotional meanings are transferred to consumers via advertising.

Study 1 employed content analysis to examine the use of emotional appeals in loan advertisements. Over 2,900 editions of eight British newspapers were monitored for advertisements for loans containing emotional appeals. Study 2 employed 33 semi-structured interviews to explore consumers’ perceptions of emotional appeals in loan advertisements.

Loans were positioned as services providing relief, security and excitement. The use of negative emotional appeals such as guilt, fear and sorrow was sporadic. Loans that carried the most risk were advertised with positive emotional appeals the most frequently. Five dimensions of perceptions of emotional loan advertisements were conceptualised from the reported data in Study 2.

This is the first study in the UK to examine the use of emotional appeals in loan advertising and to explore consumers’ perceptions of loan advertisements featuring emotional appeals. The study identified five dimensions of perceptions of emotional appeals.

Given the large global investments made in FinTechs and the context of Brazilian credit (which has been suffering from the effects of the crisis in the last decade), the purpose of this paper is to study the propensity of consumption of credit services offered by FinTechs of loans. In order to discover the factors that influenced the propensity to apply for FinTech loans, a theoretical model was designed, which was tested by means of a survey given to individuals who might contract loans.

The final sample consisted of 507 individuals whose data were analyzed through structural equation modeling (SEM), with estimation of partial least squares.

From the results of the research, it was possible to draw a profile of the FinTechs of Brazilian loans and also to estimate the antecedents of the propensity to utilize this type of service.

The model proposed in this work was developed to measure the propensity to consume in relation to the credit services offered by lending FinTechs.

The consumer should intensify the use of these channels to shape financial products and services to their needs, thereby democratizing access to credit, which is often restricted in quantity and quality by policies of institutions that dominate the Brazilian lending market.

Aspects such as trust, personal innovation, perceived utility, ease of use and social influence, as well as the constructs that precede them like privacy, stigma and transactional distance, explain 41.5 percent of the propensity to use services from lending FinTechs in Brazil.

The purpose of this paper is to provide insights into peer-to-peer (P2P) lending which has served as one important tool to mitigate financial exclusion. The main proposition of this research is that P2P platforms, which in many ways resemble auctions, naturally instill competitive mindset among lenders; furthermore, given only limited objective decision criteria, certain borrower personal characteristics fuel interpersonal competition enough to impact lending decisions in suboptimal ways. The two experiments support this proposition. As the result, while P2P lending offers unprecedented financial opportunities to some consumer groups, it may unintentionally exclude others, and even pose threat to the financial well-being of lenders.

Two experiments were used to collect data and are reported here. Rigorous pretesting of manipulation stimuli preceded a pilot (exploratory) and the main experiment.

The authors generally find a significant age bias, where ceteris paribus, younger borrowers are offered lower loan amounts as lenders most likely infer greater risk and lower likelihood to repay loans on time. However, and perhaps more interestingly, when age is not a strong indicator of experience (as in the case with 30 something), the authors repeatedly find evidence of lending decisions driven by interpersonal competition: more attractive and financially successful loan applicants of the same gender as lenders are most likely perceived as a personal threat, decreasing lenders’ confidence, which subsequently results in lower amounts being invested into loans that are possibly the most promising.

To the best knowledge, this research is first to demonstrate the impact of interpersonal competition on decision making in the context of P2P lending. Furthermore, this paper contributes to better understanding of P2P lending as a tool to allay financial exclusion, while raising concerns of possible unintended exclusion of certain consumer segments due to the competitive nature of P2P platforms.

This paper asks whether enterprise programmes are overcoming the finance gap faced by their disadvantaged participants. Specifically, the paper seeks to assessthe level of finance invested by participants on a leading UK enterprise programme, the New Entrepreneur Scholarships (NES).

The paper draws on a postal and e‐survey of participants on a leading UK enterprise programme, reporting on 472 respondents. Three capital structure variables (personal investment, external private investment and grants) are employed to analyse the importance of various types of funding in NES businesses. These figures are compared with published data about use of different types of finance, including principal sources of funding, in UK start‐ups. Descriptive statistics of perceptions of under‐capitalisation, and needs for additional funding, are also reported.

NES Scholars make significantly lower start‐up investment than is typical in UK small businesses, particularly in terms of personal finance. Finance provided by the programme is important but does not compensate for poor access to personal and loan investment. Perhaps as a consequence, almost half of the Scholars were under‐capitalised.

Implications for policy are discussed at length. In particular, practical options for addressing the under‐capitalisation of businesses started under enterprise programmes are analysed, including increasing and targeting grant finance, providing soft‐loans, improving access to existing sources of public funding for small businesses, easing access to private finance, providing more support for the self‐employed through the welfare and tax credit systems and paying childcare subsidies.

The paper presents novel analysis of the capital structure of businesses started under an enterprise programme and employs this to explore the critical question of whether – and in what ways – these firms are under‐capitalised. It also presents new analysis of the policy options available for improving finance to disadvantaged groups. It fills gaps in the literatures relating to small business finance and small business and social inclusion.

The purpose of this study is to try to answer whether the banking system in Oman is fair for both depositors and entrepreneurs.

The interest margin decomposition is based on the methodology proposed in Randall (1998). The income statement of banks defines profits before taxes (P) as interest income (II), plus non-interest income (NII), minus interest expense (IP), minus operating costs (OC) and minus provision for loan losses (Prov). After rearranging this identity, the net interest revenue can be expressed as follows: II – IP = OC + Prov + P – NII. The above expression decomposes the margin into the following cost and profit components: reserve requirement costs, operational costs, loan loss provision costs, profitability and non-interest income (with a negative sign).

A trend analysis of commercial banks’ interest rate spreads in Oman exposes the following facts: First, the implicit interest margin is relatively small (in the neighborhood of 1 percentage point); second, profits constitute a substantial proportion of the margin; third, the share of operating costs in the margin has been broadly constant over time; fourth, reserve requirement costs have been reduced following the decline of the reserve requirement ratio; and fifth, the weighted average interest rate on deposits base is lower than the rate of inflation.

This work is original.

In this chapter, the authors focus on the development of the peer-to-peer (P2P) lending industry in China. As a modern borrowing platform, P2P lending allows clients to obtain funding from peer lenders for a multitude of loan purposes, including credit consolidation, personal purchases, and the development of business ventures. However, the speed at which this industry has grown has created numerous problems for regulatory agencies, particularly in China, the largest P2P lending market in the world. This chapter examines how lenders in the Chinese context continue to function as formal institutions regulating this sector continue to grow following a series of highly publicized illegal lending activities in recent years. Additionally, the authors determine whether implemented regulatory measures are providing an overall benefit or detriment to the Chinese P2P lending industry. Finally, the authors highlight the potential for positive social change and social entrepreneurship arising from P2P lending, particularly in terms of the empowerment of traditionally disadvantaged groups by providing access to capital. The authors use the P2P lending industry in the United States, currently the second largest in the world and one operating in a highly regulated financial industry, as a comparison for the Chinese case.