...Mid-Term – Bank Loan Default I. Introduction The question requires us to understand what factors could lead to people defaulting on their loans. The variables that will be discussed include age, education, employment, address, income etc. An overview of the data will be provided along with assessing inter-relationships among variables as well as providing a good fit model. II. Overview of Data The sample includes 700 observations in the data set based on the summary. Below is the list of variables and the mean, minimum, maximum of the data. The average age of the people in the sample data is 34.86 or 35 years. The minimum is 20 years whereas the maximum age in the group is 56 years. The average level of education is 1.72 or 2 years. The minimum is 1 year and maximum is 5 years of education in the sample. The average years that a person stays with their current employer are 8.38 years. The minimum is 0 years and the maximum is 31 years with the employer. The average years that a person stays at their current address is 8.27 years. The minimum is 0 years and the maximum that someone will stay at their current address is 34 years. The average household income in thousands is 45.60. The minimum household income in the sample is 14 and the maximum is 446 thousand dollars. The average debt to income ratio (x100) is 10.26. The minimum debt to income in the sample is 0.4 whereas the maximum ratio was 41.3. The average credit card debt is 1.55. The minimum...
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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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...Rising Student Loan Default Rate: The Next Financial Crisis in the United States Rebecca Richards QBT1 - Language and Communication: Research October 1, 2012 Rising Student Loan Default Rate: The Next Financial Crisis in the United States Introduction Higher education is an important resource for career focused people here in the United States. In order to attend college, most students have to take out loans in order to cover the cost of attending. However, the rising rate of student loan defaults has recently become a serious issue that needs to be addressed. Economists agree that the rising amount of student loan default can prove to be a good indicator when seeking to predict future payments on student loans (Ismail, Serguieva, & Singh, 2011). Recent studies have shown that the growing rate of student loan default on higher education loans could cause another financial crisis in the United States because the loans are government backed, the cost of higher education is on the rise, and unemployment rates are on the rise preventing repayment. Taking on student loans can feel like and endless cycle of entrapment to the borrowers and they are often left with the belief that they have no other choice than to default on their loans. It is impossible to say with 100% certainty where the culpability lies for this unfolding crisis. One point of view is that the students may be at fault for not fully understanding the magnitude of the debt they are taking on...
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...CREDIT RATING SCALES – BANK LOAN / FACILITY RATING LONG TERM RATING SCALES AND DEFINITIONS RATING Blr AAA (blr Triple A) (Highest Safety) blr AA+, blr AA, blr AA(blr Double A) (High Safety) blr A+, blr A, blr A(blr Single A) (Adequate Safety) blr BBB+, blr BBB, blr BBB(blr Triple B) (Moderate Safety) Blr BB+, blr BB, Bank Loan/ Facilities rated in this category are adjudged to carry adequate safety for timely repayment/ settlement. This level of rating indicates that the loan / facilities enjoyed by an entity has adequate and reliable credit profile. Risk factors are more variable and greater in periods of economic stress than those rated in the higher categories. Bank Loan/ Facilities rated in this category are adjudged to offer moderate degree of safety for timely repayment /fulfilling commitments. This level of rating indicates that the client enjoying loans/ facilities under-performing in some areas. However, these clients are considered to have the capability to overcome the above-mentioned limitations. Cash flows are irregular but the same is sufficient to service the laon/ fulfill commitments. Risk factors are more variable in periods of economic stress than those rated in the higher categories. Speculative/ Non investment Grade Bank Loan/ Facilities rated in this category are adjudged to lack key protection factors, which results in an inadequate safety. This level of rating indicates loans/ facilities enjoyed by a client are below investment grade. However, clients may...
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...3 && status == 0); status=1; if (status==0) puts("Sorry, access denied."); else { puts ("You may now accessed to the temperature values for the month od March and July 2013.\n"); puts("Please select an option A, B or Q.\n"); do { showMenu1(); userInput=getch(); switch (userInput) { case 'a': case'A': puts("You have selected option A"); do { showMenu2(); userInput=getch(); switch (userInput) { case 'c': case 'C': getLowesttempA(); break; case 'd': case 'D': getHotdaysA(); break; case 'e': case 'E': getMeantempA(); break; case 'f': case 'F': getHottestdayA(); break; case 'l': case 'L': userInput='L'; break; default: puts("You have seleceted an invalid option.\n"); } } while (userInput!='L'); continue; case 'b': case 'B': puts("You have selected option B"); do { showMenu2(); userInput=getch(); switch (userInput) { case 'c': case 'C': getLowesttempB(); break; case 'd': case 'D': getHotdaysB();...
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...The Significance of Basel 1 and Basel 2 for the Future of The Banking Industry with Special Emphasis on Credit Information Abstract This paper examines the significance of Basel 1 and Basle 2 for the future of the banking industry. Both accords promote safety and soundness in the financial system with Basel 2 utilize approaches to capital adequacy that are appropriately sensitive to the degree of risk involved in a banks’ positions and activities. These approaches –and especially the one to measure credit risk- will require information from external credit assessment institution and information collected by banks about their borrowers creditworthiness. Maher Hasan Central Bank of Jordan To be presented in the Credit Alliance/ Information Alliance Regional Meeting in Amman 3-4 April 2002 1. Introduction The soundness of the banking system is one of the most important issues for the regulatory authorities. There are two main questions facing the regularity authorities regarding this issue: First, How should banking “soundness” be defined and measured? Second, What should be the minimum level of soundness set by regulators? The soundness of a bank can be defined as the likelihood of a bank becoming insolvent (Greenspan 1998). The lower this likelihood the higher is the soundness of a bank. Bank capital essentially provides a cushion against failure. If bank losses exceed bank capital the bank will become capital insolvent. Thus, the higher the bank capital the higher is...
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...Higher Education: An Investment or a Gamble? Higher education has been a staple in western civilization for those who wish to be part of the economically privileged. Social perception has modified the previous thought into believing that to enter the “middle class” that a person must have a college degree, more specifically a bachelor’s degree. Every year the amount of Americans attending higher education rises, yet the United States now has the highest college dropout rate in the world with only 56% of college students completing their bachelor’s degree within a six year timeframe (Pathways to Prosperity, 10-11). Each year the odds that an individual choosing to attend a four-year university will dig their own financial grave by not graduating increases due to the continuing steep rise in tuition. The long term effects of this will create an ever widening gap in our economic classes causing a continual imbalance of higher percentages of persons in the lower economic class and a lower percentage in America’s middle class. Several factors attribute to why this shift is continuing to increase speed with increased tuition costs at the epicenter. In 1980 the average cost for tuition, room, and board for a four year institution adjusted for 2010 inflation was $8756 (nces.ed.gov). This cost has risen almost 250% in constant dollars to $21,093 while the average middle class household income has only risen 11% when adjusted for 2011 inflation ($55,873 in 1980 to $62,434 in 2011)...
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...The speech, Kenyon Commencement Speech, by David Foster Wallace was delivered to the graduating class of 2005 at Kenyon College. Wallace talks about how important it is to have a degree that is more than “just a material payoff”. He tells the students that in order to be more successful, they must know how to think correctly. Wallace uses a story of two fish in which a young fish asks an older fish about the water. The older fish does not understand what the younger fish is talking about. He uses this story to show that often the most obvious things in life are often the hardest to see. Wallace tells students that in order for them to receive a full education they must first learn how to think. “[Learning how to think] means being conscious...
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...Pros and Cons of Today's College Education Student’s name: Institutional affiliation: The current state of higher education in United States In the recent past, the state of higher education in the United States has been under the spotlight of deteriorating quality, high costs and turnover rates. The top and bottom divisions of United States institutions of higher learning have become so dissimilar from each other that they have stopped being the single coherent social institution. Institutions belonging to the top strata have values, missions, funding and personnel that are different from those at the bottom. Universities and colleges that are in the middle class are torn between these extremes. Universities in the top strata have become a preserve for the minority few who are affluent. Attending universities like Harvard has been left to the few who can afford to pay the exorbitant fees. The divisions arising in institutions of higher learning have come to be viewed as a show of might and class, as well as a means by which the American plutarchy duplicates itself. Donoghue (nd) notes that top strata universities’ one year tuition fee is more than the average income of American citizens. Universities in the middle and bottom classes are continually grappling with budget cuts as the government strives to sustain the budget in times of economic downturns. Budget cuttings have severe implications for public colleges and universities as universities have to raise their...
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...a college degree really worth all the hassle? The thought of going back to school has always crossed my mind, but I kept putting it off because of all the fearful stories I’ve heard about student loans over the years. I myself was afraid to venture into the same fearful situation, I’ve always heard about and so I put going back to school on the back burner, because I wanted nothing to do with student loans. The year is 2018, and Americans today are more weighed down by student loan debt than any time in history, statistics show that Americans owe over $1.48 trillion in student loan debt, that’s stretched out over about 44 million borrowers. {“U.S. Student Loan Debt Statistics for 2018.” Student Loan Hero, studentloanhero.com/student-loan-debt-statistics/.} That amount is about $620 billion more than the total U.S. credit card debt. The average student from the class of 2016 graduates has $37,172 in student loan debt, A jump of six percent from the previous year. Here is how four-year or graduate degrees break down, percentage wise of overall...
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...Credit Risk Management Ken Brown Peter Moles CR-A2-engb 1/2012 (1044) This course text is part of the learning content for this Edinburgh Business School course. In addition to this printed course text, you should also have access to the course website in this subject, which will provide you with more learning content, the Profiler software and past examination questions and answers. The content of this course text is updated from time to time, and all changes are reflected in the version of the text that appears on the accompanying website at http://coursewebsites.ebsglobal.net/. Most updates are minor, and examination questions will avoid any new or significantly altered material for two years following publication of the relevant material on the website. You can check the version of the course text via the version release number to be found on the front page of the text, and compare this to the version number of the latest PDF version of the text on the website. If you are studying this course as part of a tutored programme, you should contact your Centre for further information on any changes. Full terms and conditions that apply to students on any of the Edinburgh Business School courses are available on the website www.ebsglobal.net, and should have been notified to you either by Edinburgh Business School or by the centre or regional partner through whom you purchased your course. If this is not the case, please contact Edinburgh Business School at the address below:...
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...yield on debt securities. Since many institutional investors can only own bonds above a certain rating, the rating also determines who will or will not buy the issue. A bond rating may also influence the value of a company’s common equity, since some common stock rating services take bond ratings into account when they rate stocks. A committee of the rating agency is responsible for ratings. Initially, in the case of corporate bonds, the company seeking a rating for a new issue makes a presentation to the rating agency. Based on these and other data, such as company visits, a bond analyst employed by the rating agency prepares a report on the company that measures the probability of trouble or loss for the investor, especially from default and poor marketability of the bonds. In this report, the analyst assesses the likelihood of earnings declining or turning negative, the likelihood of a company’s survival during a recession, and the likelihood that the issuer will be able to repay the principal borrowed and pay the interest owed at the times agreed upon. The analyst may suggest a rating to the rating committee. The rating agencies charge a fee for ratings requested by companies. Many companies contract with the agencies to do a preliminary rating and then, depending on what it is,...
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...Statistics and Econometrics Mid-Term – Bank Loan Default I. Introduction The question requires us to understand what factors could lead to people defaulting on their loans. The variables that will be discussed include age, education, employment, address, income etc. An overview of the data will be provided along with assessing inter-relationships among variables as well as providing a good fit model. II. Overview of Data The sample includes 700 observations in the data set based on the summary. Below is the list of variables and the mean, minimum, maximum of the data. The average age of the people in the sample data is 34.86 or 35 years. The minimum is 20 years whereas the maximum age in the group is 56 years. The average level of education is 1.72 or 2 years. The minimum is 1 year and maximum is 5 years of education in the sample. The average years that a person stays with their current employer are 8.38 years. The minimum is 0 years and the maximum is 31 years with the employer. The average years that a person stays at their current address is 8.27 years. The minimum is 0 years and the maximum that someone will stay at their current address is 34 years. The average household income in thousands is 45.60. The minimum household income in the sample is 14 and the maximum is 446 thousand dollars. The average debt to income ratio (x100) is 10.26. The minimum debt to income in the sample is 0.4 whereas the maximum ratio was 41.3. The...
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...RECOGNITION FOR THE YEARS 2011, 2012 & 2013 THREE YEAR CONTRACT VALUED @ 64,000,000.00 EXPECTED COST 46,000,000.00 YEAR DEGREE OF COMPLETION REVENUE RECOGNISED EXPENSES RECOGNIZED PROFIT 2011 7,200,000.00 16% 10,017,391.30 7,200,000.00 2,817,391.30 2012 20,100,000.00 44% 27,965,217.39 20,100,000.00 7,865,217.39 2013 18,700,000.00 41% 26,017,391.30 18,700,000.00 7,317,391.30 TOTALS 100% 64,000,000.00 46,000,000.00 18,000,000.00 Question 4-22 The revenue recognition criteria for the sale of goods require the following conditions to be met before any revenue from the sale of an item can be recognised. They are as follows: • There has been transfer of the risk and rewards to the buyer. • The company no longer has managerial involvement or control over the goods sold. • Revenue can be easily measured. • It is likely that economic benefits from the transaction will flow to the seller • The cost incurred or to be incurred with respect to the transaction can be reliably measured. In this instance the seller has entered in to a “Layaway” agreement with the buyer which should run 6 months to a year; the agreement further state that a storage fee of $35 is payable and a possible default fee of $100.00 which will be used to reduce the final payment if all monthly payments are made on schedule. At a glance it might seems plausible to recognise the...
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...information do you have about the claims? What is the expertise of the author, if any? Is the author biased and untrustworthy, or unbiased and trustworthy? The article I chose is, Greece Nears the Precipice, Raising Fear by Landon Thomas Jr., Published: September 19, 2011 - NY Times. http://www.nytimes.com/2011/09/20/business/global/as-greece-struggles-the-world-imagines-a-default.html?ref=economy I chose this article for its argumentative but explanatory explanation on the topic of Greece’s debt problems. This article describes the recent economic troubles in Greece and possibilities of default on government debt. The article claims that if Greece does not act upon its debt and default larger problems can arise in their economy as well as other parts of Europe. The article states, "My view is that it is very much in Greece’s interest to default now, as there is no prospect that it can repay its debt,” said Desmond Lachman, a former I.M.F. economist at the American Enterprise Institute. “If it is inevitable that an insolvent Greece is going to have to restructure, it would be better for Greece to do it now.” This is a powerful closing at...
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