...report as laid out in the templates (remember to reference any facts that you are basing your research on). This will set the scene for your Research Problem statement, so that you can write a clear, stand alone Research Problem. 3. A Research Problem is not the same as a business problem, ie it is not a “problem” in the normal sense of the word; it is research jargon that happens to be a bit confusing. You can think of your Research Problem as the unknown part of your business problem. 4. We prefer Research Problem statements to have an outcomes based verb at or near the beginning. Some good outcome based verbs are: Identify define relate describe review...
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...late has become very scarce for smallholder farmers owing to a number of reasons. Credit institutions argue that smallholder farmers involve only themselves and are never willing to work collectively which limits the success of their business to where their skills and knowledge end. The nature of agribusiness itself leaves a lot to be desired as far as agricultural credit is concerned. Most agribusinesses have slow response to price changes, long-term production cycles, seasonality of production and are further susceptible to climate changes which culminate in cash flow problems and low long-term profitability hence posing high risk of default in payment of credit. On another note, though there are numerous credit institutions in Swaziland, loan processing is slow. Business enterprises in the country at times have to wait for months before their loans are approved (Dlamini 2001 in Ngcamphalala 2005). Although, there is an outcry of the scarcity of farm credit for smallholder farmers, other farmers do obtain funding from institutions that offer farm credit either in cash or in kind through the value chain finance instruments. Through some instruments, funds are advanced to farmers to be repaid usually in kind at harvest time yet through some instruments agricultural inputs are advanced to farmers or others in the value chain for repayment at harvest or other time with the cost of credit usually embedded into the price. Still through other instruments sales agreements between farmers...
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...AND PAIGE MARTA SKIBA** I. Introduction Pawnbroking is the oldest source of credit.1 There is growing public interest in day-to-day pawnbroking operations, as evidenced by the popularity of reality shows such as “Pawn Stars” and “Hardcore Pawn.”2 Television viewers’ curiosity about an old credit institution may be due to the fact that 7% of all U.S. households have used pawn credit.3 Although pawnshops predate biblical times, researchers know surprisingly little about this ancient form of banking and its customers.4 We fill this gap by documenting detailed information on pawnshop loan repayment and default, and by discussing how pawnshop borrowers’ behavior is consistent with various behavioral economics phenomena. Pawnshop loans are small, short-term, collateralized loans typically used by low-income consumers. The borrower leaves a possession, or “pledge,” as collateral in exchange for a loan, typically of $75–$100.5 Interest rates vary by state and range from 2 Assistant Professor, Office of Economic and Manpower Analysis, United States Military Academy. susan.carter@usma.edu. The views expressed in this paper do not necessarily represent those of the United States Military Academy, the United States Army, or the Department of Defense. ** Associate Professor of Law, Vanderbilt University Law School. paige.skiba@vanderbilt.edu. We would like to thank Margaret Blair, Anna Skiba-Crafts and Kip Viscusi for valuable...
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...AND PAIGE MARTA SKIBA** I. Introduction Pawnbroking is the oldest source of credit.1 There is growing public interest in day-to-day pawnbroking operations, as evidenced by the popularity of reality shows such as “Pawn Stars” and “Hardcore Pawn.”2 Television viewers’ curiosity about an old credit institution may be due to the fact that 7% of all U.S. households have used pawn credit.3 Although pawnshops predate biblical times, researchers know surprisingly little about this ancient form of banking and its customers.4 We fill this gap by documenting detailed information on pawnshop loan repayment and default, and by discussing how pawnshop borrowers’ behavior is consistent with various behavioral economics phenomena. Pawnshop loans are small, short-term, collateralized loans typically used by low-income consumers. The borrower leaves a possession, or “pledge,” as collateral in exchange for a loan, typically of $75–$100.5 Interest rates vary by state and range from 2 Assistant Professor, Office of Economic and Manpower Analysis, United States Military Academy. susan.carter@usma.edu. The views expressed in this paper do not necessarily represent those of the United States Military Academy, the United States Army, or the Department of Defense. ** Associate Professor of Law, Vanderbilt University Law School. paige.skiba@vanderbilt.edu. We would like to thank Margaret Blair, Anna Skiba-Crafts and Kip Viscusi for valuable...
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...Need and Analysis of LGD: Why is it important?? Literature Review I Submitted for the Research Paper at SIMSR On subject Risk Management By Manisha Jain (22) PGDM-FS Trimester IV To Professor A.K. Pradhan Year-2012-14 Literature Review * Introduction LGD (Loss Given Default) is the ratio of the losses to exposure to default for incurred by the bank when an obligor does not repay the debt back.LGD is the loss incurred after the default of an account i.e. when an account turns an NPA and the bank writes off the account the loss on that account is referred to as LGD. For calculation of LGD default is a must.LGD is a component of the Internal Rating Based approach given by Basel Norms 2 which allows the banks to calculate the credit risk capital requirements. IRB mainly has four components: probability of default (PD), Exposure at default (EAD), Maturity (M) and Loss Given Default (LGD). Researchers have deeply studied on the concept of LGD because NPA is great point of concern for the banks or the lending institutions these days. * Literature Review The Basel norms 2 were developed to better align regulatory capital with the underlying risk in a bank’s credit portfolio. It allows banks to compute their credit risk capital in two ways: a revised standardized approach based on the original 1988 Capital Accord, and two versions of an internal ratings based (IRB) approach whereby banks are permitted to develop and use their own internal...
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...Objective of the Study 3 1.3.1 General Objective 3 1.3.2 Specific Objectives of the study 3 1.4 Research Questions 3 1.5 Scope of the Study 4 1.6 Significance of the Study 4 1.7 Limitation of the Study 4 2. REVIEW RELATED LITERATURE 5 2.1 Introduction 5 2.2 Credit Assessment 5 2.3 Credit Appraisal 6 2.4 Credit Documentation 6 2.5 Collateral 7 2.6 Interest Rate 7 2.7 Size of Loan 8 2.8 Purpose of Loan 8 2.9 Loan Period 8 2.10 Disbursement 9 2.11 Repayment of Bank Loans 9 2.12 Monitoring and Follow up 9 2.13 Factoring of Debtors through Credit Bureaus 10 2.14 Portfolio Management 10 3. RESEARCH METHODOLOGY 11 3.1 Research Method 11 3.2 Method of Data Collection 11 3.3 Determination of Population Size of the Study 12 3.4 Sample Size 12 3.5 Method Data Analyses 12 4. TIMELINE 12 5. BUDGET BREAKDOWN 13 6. REFERENCES 13 1. INTRODUCTION 1.1 Back Ground of the Study Bank lending is guided by credit policies which are guidelines and procedures put in place to ensure smooth lending operations. Bank lending if not properly assessed, involves the risk that he borrower will not be able or willing to honor their obligations (Feder & Just 1980). In order to lend, banks accept deposits from the public against which they provide loans and other form of advances. Since they bear a cost for carrying these deposits, banks undertake lending activities in order to generate revenue. The major sources of revenue comprise margins, interests, fees and commissions...
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...AN INVESTIGATION OF THE RELATIONSHIP BETWEEN NON-PERFORMING LOANS, MACROECONOMIC FACTORS, AND FINANCIAL FACTORS IN CONTEXT OF PRIVATE COMMERCIAL BANKS IN BANGLADESH by Syeda Zabeen Ahmed ID # 0120269 An Internship Report Presented in Partial Fulfillment of the Requirements for the Degree Bachelor of Business Administration INDEPENDENT UNIVERSITY, BANGLADESH April 2006 An investigation of the relationship between Non-performing Loans, Macroeconomic Factors, and Financial Factors in context of Private Commercial Banks in Bangladesh by Syeda Zabeen Ahmed ID # 0120269 has been approved April, 2006 _________________ Shubhankar Shil Lecturer School of Business Independent University, Bangladesh TABLE OF CONTENTS Page List of Tables Abstract 1. Introduction 2. Problem Statement 3. Purpose of the Study 4. Limitations of the Study 5. Research Timeline 6. Review of Literature 6.1 Non-performing Loans 6.2 Development of hypotheses 6.3 Macroeconomic factors and NPLs 6.4 Bank specific indicators and NPLs 6.5 Terms of Credit and NPLs 7. Methodology 7.1 Research Approach 7.2 Sampling Method 7.3 Measure of variables 7.4 Data Collection Procedure 7.5 Data Analysis 8. Results 8.1 Descriptive 8.2 Correlations 8.3 Regression 9. Significant of the Study 11. Conclusion Reference Appendix 1 I 1 1 2 2 3 3 3 4 5 6 7 7 8 8 8 8 9 9 10 10 11 12 13 13 14 16 List of Tables Page 1. Demographics of respondents 2. Occupational experience of respondents 3. Responsibility statements 4. Reliability...
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...CREDIT RISK MANAGEMENT BY COMMERCIAL BANKS IN KENYA, A COMPARATIVE STUDY OF KCB AND COOPERATIVE BANK, CHUKA BRANCHES BY AMULYOTO FRANKLIN UNGAYA (BB1/02596/10) A Research Proposal Submitted to the Department of Business Administration in Partial Fulfillment of the Requirement for the Award of the Degree of Bachelor of Commerce (Banking and finance option) of Chuka University CHUKA UNIVERSITY AUGUST, 2013. DECLARATION AND APPROVAL This research proposal is my own original work and has not been presented for a degree in any other university, either in part or a whole. Amulyoto, F. U. Signature……………………………… Date…………………………………… APPROVAL This research has been submitted for examination with the approval of the following university supervisor: MR. NGENO K. W. A. Department of Business Administration Chuka University Signature………………………… Date……………………………… ACKNOWLEDGEMENT The writing of this proposal was made possible through support and encouragement from various persons. I sincerely thank my creator, the Almighty God who has given me grace to carry out my research study. I would also like to thank my supervisor Mr. Ngeno. Through his guidance and correction I was able to come up with this proposal. The gratitude is profound. Special thanks to everyone else who’s input in this work cannot go unmentioned. DEDICATION This research is dedicated to my mother, Mrs. Judith Amulyoto. TABLE OF CONTENTS ...
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...2.1Introduction This section discusses some empirical and theoretical literature on the effect of credit risk management on financial performance, and introduces an overview of BancABC and its credit risk management practices 2.2Brief Company overview ABC Holdings Limited is the parent company of a number of banks operating under the BancABC brand in Sub-Saharan Africa, with operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe. A group services office is located in South Africa.Historically, BancABC was a merchant bank offering a diverse range of services including wealth management, corporate banking, treasury services, leasing, asset management, and stock broking.ABC Holdings had Its primary listing on the Botswana Stock Exchange, and a secondary listing on the Zimbabwe Stock Exchange (BancABC annual report 2009) During 2014, the ABC Holdings Group was acquired by Atlas Mara. As at 31 December 2014, Atlas Mara had a 98.7% equity stake in ABC Holdings, held directly (60.8%) and indirectly (37.9%). Subsequent to the takeover, ABC Holdings was delisted from the Botswana Stock Exchange on 30 January 2015, and from Zimbabwe Stock Exchange on 12 February 2015.Atlas Mara is a British Virgin Islands registered company with a standard listing on the London Stock Exchange(BancAbc Annual report 2014) The seeks to review the credit risk management methods implemented by the bank . Definition of terms 2.3.1Credit According to Onyeagocha (2001), the term credit...
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...CHAPTER TWO LITERATURE REVIEW 2.0 Introduction This chapter reviews literature related to this study. This was done with the expectation that relevant information would be obtained to help shape and enrich the study, knowledge of what has been done on this topic is important in helping to clarify issues. The following topics were reviewed for the study; definition of loan, definition of SME, general principles of lending, loan monitoring and control, access to credit as well as repayment performance: theory and practice. 2.1 Definition of loan A loan is a type of debt like all debt instruments, a loan entrails the redistribution of financial assets over time, between the lender and the borrower. The borrower initially receives an amount of money from the lender which they pay back, using but not always in regular installment. Types of loans There are many different types of loans you can take out. When you are looking to borrow money, it’s important that you know your options. i. Open-ended loans: they are loans that you can borrow over and over again. Credit cards and lines of credit are the most common types of open-ended loans. With both of these loans, you have a credit limit that you can purchase against. Each time you make a purchase, your available credit decreases. As you make payments, your available increases allowing you to use the same credit over and over. ii. Closed-ended loans: this cannot be borrowed once they have been repaid. As you make payments on...
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...first condition of sustained and rapid economic progress. Among various indicators of financial stability, banks’ non-performing loan (NPL) assumes critical importance since it reflects on the asset quality, credit risk and efficiency in the allocation of resources to productive sectors. Nonperforming loans (NPLs) refer to those financial assets from which banks no longer receive interest and/or installment payments as scheduled. They are known as non-performing because the loan ceases to “perform” or generate income for the bank. Choudhury et al. (2002: 21-54) state that the nonperforming loan is not a “uniclass” but rather a “multiclass” concept, which means that NPLs can be classified into different varieties usually based on the “length of overdue” of the said loans. NPLs are viewed as a typical byproduct of financial crisis: they are not a main product of the lending function but rather an accidental occurrence of the lending process (Woo, 2000: 2). This is because NPLs can bring down investors’ confidence in the banking system. Only for a few defaulting borrowers, the banks suffer, depositors suffer, performing borrowers suffer, shareholders suffer, Government suffers and consequently economy and the people of the country suffer. The latest data reveal that in Bangladesh banking sector the amount of NPL is Tk 2572.65 crores (7.17% of total loans) up to September 2011. The ratio of NPL was as high as 41.1% in 1999, which came down gradually to the present level as mentioned...
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...The Influence of Internet Finance for SME Financing in China Introduction Currently, SME (Small And Medium-size enterprises) is the foundation of promoting national economy development, constructing the subject of market economy and promoting the development of social stability in China (Wang, 2011). In recent years, the economic situation has experienced dramatic change and this huge variation stimulates financing needs of SMEs in China greatly. Nevertheless, the majority of SMEs have financing difficulties due to their personal limitations and insufficient external support. As a result, it is hard for them to have a further development. With the advent of the information technology revolution, Internet Finance is considered as a new effective way to solve the financial difficulties of SMEs and it brings about many positive influences, although there are some negative aspects to improve. This essay will firstly inform background information about the reasons for SME financing difficulty as well as Internet finance’s current condition. Additionally, it will give evidence for the main argument that there are more positive influences than negative influences of Internet finance on minor enterprises’ financing issue. Finally, some practical suggestions will be put forward, helping Chinese SMEs to find the optimal choice in financing. Background There are more SMEs in China than before in accordance with the relevant statistics. According to Wang (2011), SMEs account for 99...
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...Available online 19 July 2007 Abstract This paper examines the ex post and ex ante benefits of accounting conservatism to lenders and borrowers in the debt contracting process. I expect conservatism to benefit lenders ex post through the timely signaling of default risk, as manifested by accelerated covenant violations, and to benefit borrowers ex ante through lower initial interest rates. Consistent with these predictions, I find that more conservative borrowers are more likely to violate debt covenants following a negative price shock, and that lenders offer lower interest rates to more conservative borrowers. r 2007 Elsevier B.V. All rights reserved. JEL classification: M41; G32 Keywords: Conservatism; Debt contracting; Covenant violation; Spread 1. Introduction While positive accounting theory suggests that accounting conservatism enhances efficiency in the debt contracting process (Watts and Zimmerman, 1986; Watts, 2003a, b), there is little empirical evidence on the debt contracting benefits of conservatism. In this paper, I provide evidence on the ex post and ex ante benefits of conservatism to lenders and borrowers. Specifically, I document that conservatism benefits lenders ex post through the timely signaling of default risk, as manifested by accelerated covenant violations, and benefits borrowers ex ante through lower interest rates. $ This paper is based on my dissertation at Massachusetts Institute of Technology. I would like to thank the members of my dissertation committee...
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...Literature Review The literature that will follow will include the reasons for the global financial crisis and what steps the government is taking to overcome or recover from the crisis. One of the main reasons emphasized in the following text for the crisis is lack of effective regulations. Moreover the most important financial alteration that various committee’s around the world are taking is strengthening the regulatory requirements on the financial institutions. Hereafter it could be settled that government intervention could have played a huge role in avoiding the crisis. Many countries around the world have to decide whether to regulate or not to regulate their accounting standards. Supporters of regulation usually state that the free market notion states that accounting information is like an economic good so it is best to leave the markets to decide what and how much information is needed. This will help achieve efficient market system, however this kind of a system exists only in theory and not in reality, and so then what is the point of a free market system when it cannot be efficient? (Y. Hong, 2007) The rewards of free market system are realized only when it is executed in isolation. But in reality, markets cannot be left completely on its own and some regulation or government intervention is required. Government intervention even at its minimum will not be able to achieve efficient markets and thus it is better to have a well regulated system. Free market system...
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...Running head: CAUSE OF ECONOMIC CONDITIONS IN THE UNITED STATES AND THE UNETHICAL BUSINESS THAT LED TO IT Final Paper James Smith Hodges University GEB/PAD 6376 Dr. Forrer Week Due: 14 Due: 08/14/2011 Submitted: 08/10/2011 INTRODUCTION (Part 1) Why has the unemployment rate been above 12 percent for the last several years? Why have so many prior successful businesses closed in the last four years? Why have so many major corporations and publicly traded companies filed for bankruptcy? Why did a house that used to cost $200,000.00 just sell for $40,000.00? Why are foreclosures at the highest rate in US history? Maybe the question to ask is what has caused all of this? There are so many questions to be answered when it comes to the economic conditions in the United States. How did it get into the current condition? What were the signs of slipping into the crisis (economic indicators)? Whose actions were responsible? Was the responsible party also guilty of unethical behavior (big issue) or was it accidental. How long will it take for the economy to get back to being productive? In the past, America has been a very productive, successful country. There have been other recessions and a depression that have affected the U.S. but for some reason this current crisis was started by a completely different chain of events. What was the chain of events that triggered this...
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