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Hassan Mazengera - One of the best experts on this subject based on the ideXlab platform.
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DERIVATION OF A STOCHASTIC Loan Repayment MODEL FOR VALUING A REVENUE-BASED Loan CONTRACT
Annals of Financial Economics, 2017Co-Authors: Hassan MazengeraAbstract:In this paper, we derive a stochastic Loan Repayment model, that will be used to quantify or ascertain the maximum borrowing capacity for a firm. Initially, we derived the revenue and then the stochastic Loan Repayment model. The derived stochastic Loan Repayment model is a function of the generated revenue. We also show that the model is consistent with our expectations, that is [Formula: see text], the proportion of revenue that goes toward Loan Repayment is a very important parameter as far as ascertaining default is concerned. Under stochastic Loan Repayment model, a firm will be highly likely to default the moment [Formula: see text] which approaches one. Technically, this means that all the revenue is used in Loan Repayment. Finally, we show that when financial institutions lend using the fixed Repayment regime, fixed periodic installments must be less than or equal to stochastic Repayment amount, otherwise there will be a default. From this analysis, we ended up with a very crucial boundary relationship between the Loan amount, [Formula: see text] and the stochastic Loan Repayment amount. The derived stochastic Loan Repayment model works well in a less volatile environment. When volatility exceeds 100%, we may need more frequent revenue values to achieve the desired results.
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DERIVATION OF A STOCHASTIC Loan Repayment MODEL FOR VALUING A REVENUE-BASED Loan CONTRACT
Annals of Financial Economics, 2017Co-Authors: Hassan MazengeraAbstract:In this paper, we derive a stochastic Loan Repayment model, that will be used to quantify or ascertain the maximum borrowing capacity for a firm. Initially, we derived the revenue and then the stochastic Loan Repayment model. The derived stochastic Loan Repayment model is a function of the generated revenue. We also show that the model is consistent with our expectations, that is α, the proportion of revenue that goes toward Loan Repayment is a very important parameter as far as ascertaining default is concerned. Under stochastic Loan Repayment model, a firm will be highly likely to default the moment α which approaches one. Technically, this means that all the revenue is used in Loan Repayment. Finally, we show that when financial institutions lend using the fixed Repayment regime, fixed periodic installments must be less than or equal to stochastic Repayment amount, otherwise there will be a default. From this analysis, we ended up with a very crucial boundary relationship between the Loan amount, L and the stochastic Loan Repayment amount. The derived stochastic Loan Repayment model works well in a less volatile environment. When volatility exceeds 100%, we may need more frequent revenue values to achieve the desired results.
J. A. Afolabi - One of the best experts on this subject based on the ideXlab platform.
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Analysis of Loan Repayment among Small Scale Farmers in Oyo State, Nigeria
Journal of Social Sciences, 2010Co-Authors: J. A. AfolabiAbstract:The study analysed Loan Repayment among small scale farmers in Oyo State, Nigeria. It specifically identified socio-economic characteristics of the respondents and quantitatively determined some socio-economic characteristics of these farmers that influence their level of Loan Repayments. A multi stage sampling technique was used to select 286 respondents in the study area and structured questionnaire administered on them to collect data. Descriptive statistics was used to analyse the socio-economic characteristics of the respondents while multiple regression using Ordinary least square (OLS) was used to quantitatively determine the socio-economic characteristics that influence the level of Loan Repayment among small scale farmers in the study area. The result showed that 60.23% of the respondents were more than 50 years old and 92.35% of them were males. Analysis also revealed that 83.92% of these farmers operated 4.9 hectares or less as farmland. About 82.17% of the respondents obtained their Loans from informal sources while 17.83% patronized formal sources. The result of the Repayment function showed that the included regressors explained 68.4% in the variation of the regressand.
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Analysis of Loan Repayment Among Small Scale Farmers in South Western Nigeria- A Discriminant Approach
Journal of Social Sciences, 2008Co-Authors: J. A. AfolabiAbstract:The study examined Loan Repayment among small scale farmers in South Western Nigeria. It specifically identified the socio-economic characteristics that discriminate between Loan defaulters and non...
Sabina Wangia - One of the best experts on this subject based on the ideXlab platform.
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factors affecting Loan Repayment performance of smallholder farmers east hararghe ethiopia
2012Co-Authors: Million Sileshi, Rose Adhiambo Nyikal, Sabina WangiaAbstract:This paper examined the determinants of Loan Repayment performance among smallholder farmers in East Hararghe zone, Ethiopia specifically Kombolcha and Babile districts. In the study area, the Regional Government through Oromiya Saving and Credit Share Company, and Non-Governmental organizations have extended credit facilities to farming households to narrow the gap between the required and the owned capital to use improved agricultural technologies that would increase production and productivity. However, there is serious Loan Repayment delinquency in the study area, which discourages the rural finance from promoting and extending credit. A structured questionnaire was used to gather information from 140 smallholder farmers from two districts, using the multistage sampling technique. The study revealed that of the total sample households 71.4 percent and 28.6 percent households were partial Loan defaulters and complete non-defaulters, respectively. A two-limit tobit regression model was applied to identify factors that influenced Loan Repayment . The results indicate that agro ecological zone, off-farm activity and technical assistance from extension agents positively influenced the Loan Repayment performance of smallholder farmers, while production loss, informal credit, social festival and Loan-to-income ratio negatively influenced the Loan Repayment of smallholder farmers (p<0.05). Based on the findings policy implications were drawn for improving Loan Repayment performance and sustainability of credit services and institutions in the study areas. Key words: Loan Repayment, smallholder farmers, and two - limit tobit model
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Factors Affecting Loan Repayment Performance of Smallholder Farmers: East Hararghe, Ethiopia
2012Co-Authors: Million Sileshi, Rose Adhiambo Nyikal, Sabina WangiaAbstract:This paper examined the determinants of Loan Repayment performance among smallholder farmers in East Hararghe zone, Ethiopia specifically Kombolcha and Babile districts. In the study area, the Regional Government through Oromiya Saving and Credit Share Company, and Non-Governmental organizations have extended credit facilities to farming households to narrow the gap between the required and the owned capital to use improved agricultural technologies that would increase production and productivity. However, there is serious Loan Repayment delinquency in the study area, which discourages the rural finance from promoting and extending credit. A structured questionnaire was used to gather information from 140 smallholder farmers from two districts, using the multistage sampling technique. The study revealed that of the total sample households 71.4 percent and 28.6 percent households were partial Loan defaulters and complete non-defaulters, respectively. A two-limit tobit regression model was applied to identify factors that influenced Loan Repayment . The results indicate that agro ecological zone, off-farm activity and technical assistance from extension agents positively influenced the Loan Repayment performance of smallholder farmers, while production loss, informal credit, social festival and Loan-to-income ratio negatively influenced the Loan Repayment of smallholder farmers (p
Nabilah Rozzani - One of the best experts on this subject based on the ideXlab platform.
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STREAMLINING MOBILE BANKING INTO Loan Repayment SYSTEM FOR MICROFINANCE INSTITUTIONS
2019Co-Authors: Afifa Malina Amran, Intan Salwani Mohamed, Sharifah Norzehan Syed Yusuf, Nabilah RozzaniAbstract:The competitive environment of microfinance industry has indeed forced microfinance institutions (MFIs) to balance their dual goals of outreach and sustainability. Based on this, the focus of this current research is placed on its objective to study how the implementation of mobile banking would be better to streamline the accounting information system for MFIs, specifically with regards to Loan Repayments. To better understand the current practice of mobile banking in IMFIs, this study was conducted using a qualitative case study on Amanah Ikhtiar Malaysia (AIM), one of the biggest MFIs in Malaysia. It was found from the study that the usage of mobile banking can streamline AIM’s Loan Repayment system and increases its productivity by having shorter meeting times with recipients. Findings from this study shed lights on the critical role of accounting information system to adapt with applications of new technology, which could also be relevant for other organisations in various financial sectors. This study has highlighted the role of accounting information system in MFIs, especially with regards to its Loan Repayment system. As such, practitioners will be able to consider whether the lessons learnt from this case study can help them to solve similar issues within the context of their organisation. Findings from this study has significantly contributed to the microfinance industry by focusing on the role of mobile banking to improve Loan Repayment system in MFIs for service enhancement, hence becoming model institutions which practice modern accounting techniques through the usage of technology.
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Streamlining mobile banking into Loan Repayment system for microfinance institutions / Afifa Malina Amrana … [et al.]
2019Co-Authors: Afifa Malina Amran, Intan Salwani Mohamed, Sharifah Norzehan Syed Yusuf, Nabilah RozzaniAbstract:The competitive environment of microfinance industry has indeed forced microfinance institutions (MFIs) to balance their dual goals of outreach and sustainability. Based on this, the focus of this current research is placed on its objective to study how the implementation of mobile banking would be better to streamline the accounting information system for MFIs, specifically with regards to Loan Repayments. To better understand the current practice of mobile banking in IMFIs, this study was conducted using a qualitative case study on Amanah Ikhtiar Malaysia (AIM), one of the biggest MFIs in Malaysia. It was found from the study that the usage of mobile banking can streamline AIM’s Loan Repayment system and increases its productivity by having shorter meeting times with recipients. Findings from this study shed lights on the critical role of accounting information system to adapt with applications of new technology, which could also be relevant for other organisations in various financial sectors. This study has highlighted the role of accounting information system in MFIs, especially with regards to its Loan Repayment system. As such, practitioners will be able to consider whether the lessons learnt from this case study can help them to solve similar issues within the context of their organisation. Findings from this study has significantly contributed to the microfinance industry by focusing on the role of mobile banking to improve Loan Repayment system in MFIs for service enhancement, hence becoming model institutions which practice modern accounting techniques through the usage of technology.
Neema Mori - One of the best experts on this subject based on the ideXlab platform.
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Effects Of Collateral On Loan Repayment: Evidence From An Informal Lending Institution
Journal of African Business, 2016Co-Authors: Goodluck Charles, Neema MoriAbstract:We examine the effect of the collateral informal lenders use to ensure Loan Repayment. Specifically we measure how the use of movable and immovable assets affects Loan Repayment and delinquency rate, and assess the extent to which guarantorship and relationship-lending act as collateral to improve Loan Repayment. With a dataset of 835 individual borrowers drawn from an informal Tanzanian lending institution, we run descriptive and econometric models. The results suggest that movable assets increase the likelihood that borrowers perceived to be less creditworthy will obtain Loans from informal sources and repay them. We also find a small proportion of customers to have pledged immovable assets as collateral when borrowing from informal lenders. The results also show the positive effect of referral, which implies that relationship lending and social collateral is key to increasing access to finance through informal lenders. Our results contribute to the advancement of economic theory, specifically in the ex-ante and ex-post-related literature.