Banking systems based on the fractional reserve banking process have been in use for several hundred years. However textbook models of these systems do not include either loan repayments or loan defaults, and predict the evolution over time of a stable, asymptotically converging process governing credit and money supplies to the general economy for which there is no empirical evidence in long r...

Sustainability of microfinance institutions has been at the centre many studies in industry because it provides a promising direction for improved access to financial services. This paper examines determinants sustainability North “A” district Zanzibar. The specific objectives study were establish operational self-sufficiency MFIs, institutions, and determine factors influencing self-sufficienc...

Introduction In the January consultative package (CP), an underlying tenet of the proposed IRB approach for corporate exposures is that the source of repayment of the loan is based primarily on the ongoing operations of the borrower, rather than the cash flow from a project or property. In this context, assets pledged as collateral serve as a risk mitigant and as a secondary source of repayment...

Research background: Microfinance institutions (MFIs) play an important role in alleviating poverty. Thus, MFIs should be efficient order to ensure that their objectives on social welfare and financial performance can achieved by identifying the potential determinants, specifically globalisation.
 Purpose of article: This paper examines impacts globalisation dimensions interpersonal, infor...

Present paper intends to measure the determinants of performance of Indian financial sector. The performance variables of banking sector and microfinance institutions in India are studied over a study period of six years i.e. 2006-07 to 2011-12. The financial sector of India is gaining strength over the years and its contribution to growth is overwhelming. Banks are considered the main componen...

We analyze the role of debt in persuading an entrepreneur to pay out cash ows, rather than to divert them. In the Žrst part of the paper we study the optimal debt contract—speciŽcally, the trade-off between the size of the loan and the repayment—under the assumption that some debt contract is optimal. In the second part we consider a more general class of (nondebt) contracts, and derive suffic...

Recent evidence suggests heterogenous impacts of microfinance loans, with limited average effects on enterprise growth among the poor. One possibility is that the rigidity of the classic microcredit contract – widely held to be important for reducing default – inhibits investment in microenterprises. To explore these trade-offs, we provide experimental estimates of the consequences for client r...

Many households in developing countries lack formal financial histories, making it difficult for banks to extend loans, and for potential borrowers to receive them. However, many of these households have mobile phones, which generate rich data about behavior. This paper shows that behavioral signatures in mobile phone data predict loan default, using call records matched to loan outcomes. In a ...