I n this study we designed to test the remarkable repayment performance of Akhuwat in Pakistan; the most successful Islamic Microfinance Institution (IMFI), which offers interest-free loans in order to improve the quality of life and alleviate poverty. The model of Akhuwat is based on Muakhaat (brotherhood) and Qard-e-Hasan (offering financial assi...

We study a controlled corporate experiment in which loan officers were compensated to engage in loan prospecting in addition to the traditional loan screening. Loan prospecting led to larger loan sizes (+15%) and higher origination rates (+31%) while keeping the traditional credit quality threshold and interest rate intact. Loan officers attempt to influence the decision making process: loan of...

In offering a loan, banks have several considerations. This is because Standard Basel has regulations and requirements for to offer loans. relates the bank’s minimum capital liquidity requirements. factor includes external internal factors. important be noted factors contain risks inherent in financial instruments. Risk management one of things that executive most concerned about taking policy....

This study focuses on the supplemented strategies of microfinance institutions (MFIs), in which the MFI offers nonfinancial services, such as entrepreneurship related knowledge, in addition to financial services to impoverished borrowers at the bottom of the pyramid (BoP). We examine two contextual factors–foreign direct investment (FDI) and loan defaults–to better understand the relationship b...

Purpose – Banks are the major suppliers of external funds for companies in China. The purpose of this paper is to examine whether Chinese banks exercise effective monitoring over borrowers in two lending decisions, including loan interest rates and loan renewals. Design/methodology/approach – Using a sample of Chinese public industrial firms from 2000 to 2005, the authors perform multivariate r...

This study was conducted with the objective of identifying the major determinants of loan repayment in Small Scale Enterprises (SSEs) with particular reference to SSEs in one of Kenya’s most dynamic informal business hub, Kariobangi Division in Nairobi. In order to achieve this objective, primarily data were collected from 50 randomly selected respondents by using questionnaires. Descriptive st...

This paper analyzes how the movements of the policy interest rate affect bank-relevant variables through changes in the composition of the loan portfolio. Using a computational approach that fully accounts for borrowers’ heterogeneity, we show how the variety of bank customers changes and how this change affects the bank’s cash influx, making it more volatile. The paper also sheds light on how ...

Abstract We use a dataset of 12 million residential mortgages to investigate the loan default behavior in several European countries. model occurrence as function borrower characteristics, loan-specific variables, and local economic conditions. compare performance set machine learning algorithms relative logistic regression, finding that they perform significantly better providing predictions. ...

There is strong evidence that the interest rates charged by banks on the flow of newly extended Commercial & Industrial (C&I) loans predict future loan performance and CAMEL rating downgrades by bank supervisors. While internal risk ratings have little explanatory power for future loan performance, they do help predict future CAMEL downgrades. These findings suggest that supervisors might consi...

Hundreds of independent, local, quasi-charitable microcredit societies, or $loan funds,# were lending to as many as 20% of Irish households in the mid-nineteenth century. Monitored by a central regulatory authority, funds in the system were successful in mitigating informational, moral hazard and enforcement problems, and thus operated at a surplus in a market where intermediation by the banks ...