scholarly journals Interest Rate Liberalization and Capital Misallocations

2021 ◽  
Vol 13 (2) ◽  
pp. 373-419
Author(s):  
Zheng Liu ◽  
Pengfei Wang ◽  
Zhiwei Xu
Keyword(s):  
Interest Rate ◽  
Equilibrium Model ◽  
Private Firms ◽  
Aggregate Productivity ◽  
System State ◽  
Policy Reforms ◽  
Credit Access ◽  
Access To Credit ◽  
Interest Rate Liberalization ◽  
Liberalization Policy

We study the consequences of interest rate liberalization in a two-sector general equilibrium model of China. The model captures a key feature of China’s distorted financial system: state-owned enterprises (SOEs) have greater incentive to expand production and easier access to credit than private firms. In this second-best environment, interest rate liberalization can improve capital allocations within each sector but can also exacerbate misallocations across sectors. Under calibrated parameters, the liberalization policy can reduce aggregate productivity and welfare unless other policy reforms are also implemented to alleviate SOEs’ distorted incentives or improve private firms’ credit access. (JEL E43, E44, G32, L32, P24, P31, P34)

scholarly journals Determinants of credit access of cocoa farmers

2019 ◽  
Vol 13 (3-4) ◽  
pp. 73-78
Author(s):  
Nicholas Oppong Mensah ◽  
Edward Yeboah ◽  
Anthony Donkor ◽  
Frank Osei Tutu ◽  
Richard Kaanye Dier
Keyword(s):  
Interest Rate ◽  
Linear Regression ◽  
Multiple Linear Regression ◽  
Poverty Reduction ◽  
Sampling Procedure ◽  
High Interest Rate ◽  
Credit Access ◽  
Access To Credit ◽  
Coefficient Of Concordance ◽  
Cocoa Farmers

Access to credit is one of the critical areas that are of prime interest to development practitioners, agribusiness entrepreneurs and agricultural economists, mainly access to credit by farmers in order to increase their production and also reduce poverty. This study sought to analyze the determinants of credit access among cocoa farmers in the Asunafo North of the Ahafo Region of Ghana. The multistage sampling procedure was used to collect data from 100 cocoa farmers with the aid of a questionnaire. Sources of credit, factors influencing access to credit, and constraints to credit were analyzed with the aid of descriptive statistics, multiple linear regression, and Kendall’s coefficient of concordance respectively. The results of multiple linear regression revealed that, age, marital status, education, experience, and family size were significant factors that influenced access to credit. The constraints analysis with the aid of Kendall’s coefficient of concordance showed that, high interest rate was highly ranked with a mean score of 1.93 whilst the need for a guarantor was least ranked with a mean score of 7.40. Based on the results, the study recommended that a policy aimed at expanding formal and semi-formal financial institutions credit portfolio to embrace cocoa farmers by finding alternative to collaterals and also reducing the interest rate will improve credit access with a positive externality effect of poverty reduction among cocoa farmers in the study area. JEL Classification: Q14

scholarly journals The Impact of Interest Rate Ceilings on Microfinance Industry

2015 ◽  
Vol 2 (2) ◽  
pp. 10
Author(s):  
Ali Saleh Alshebami ◽  
D. M. Khandare
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Low Income ◽  
Secondary Data ◽  
Research Subject ◽  
Access To Credit ◽  
The Poor ◽  
Good Intention ◽  
The Interest Rate ◽  
The Impact

<p>Imposing ceilings on the interest rate has recently become one of the new hottest topics in microfinance industry; various debates have been discussing this issue to know the effect of interest rate ceilings on the supply of credit in particular and on microfinance industry in general. However in spite of the good intention behind these ceilings, there was no absolute result stating that ceilings have really contributed to the improvement or protection of the poor clients, indeed, these ceilings have hurt those low income people instead of helping them, due to these ceilings most of MFIs left the market or reduced their scale due to the inability to continue operating with low interest rate leaving the very poor clients without access to credit. Thus, the purpose of this paper is to review the impact of imposing such ceilings on the interest rates and to find out what alterative solutions can be employed as substitutes for them. This paper is entirely based on the secondary data collected from various records related to microfinance such as microfinance books, official websites and reports, published papers, and other sources related to the research subject.</p>

scholarly journals Characterization of smallholder farmers and agricultural credit institutions in Rwanda

2021 ◽  
Vol 21` (01) ◽  
pp. 17343-17364
Author(s):  
Nathan K Taremwa ◽  
◽  
I Macharia ◽  
E Bett ◽  
◽  
...  
Keyword(s):  
Information Asymmetry ◽  
Smallholder Farmers ◽  
Arable Land ◽  
Agricultural Credit ◽  
Convenience Sample ◽  
Credit Access ◽  
Access To Credit ◽  
Information Gap ◽  
Lending Institutions ◽  
Credit Institutions

The significance of access to agricultural credit in perpetuating agricultural productivity is unquestionable, because it is a means to achieving optimal productivity. The minimization of any barriers to agricultural credit access should,thus,be a global priority. One of the most significant and current barriers to agricultural credit access is information asymmetry which results into mutual distrust between lending institutions and borrowers in this case the smallholder farmers. To address information asymmetry, both the lending institutions and borrowers need to have definitive descriptive information about either party. Without the profiling of institutions and potential borrowers, an information gap persists, thereby increasing mutual distrust. This study addresses that gap, in the context of Rwanda by characterizing smallholder farmers and agricultural credit institutions. Across-sectional survey design was used in this study with smallholder farmers and staff in agricultural credit institutions in the Eastern, Western, and Central provinces of Rwanda as the units of analysis. A multistage sampling procedure was used,with stratified sampling of administrative levels spanning from province(stage 1) to districts (stage 2) and sectors(stage 3),followed by a simple random sampling of cells per sector, and the convenience sample of households. Staff in the financial institutions were purposively sampled. The data collected was analyzed using principal component analysis and cluster analysis with the K-means statistic(SPSS version 25). The largest cluster of smallholder farmers has the following characteristics: household size of1to 5 people, farmers with education, owning arable land not exceeding a hectare, with more than five years of farming experience,earning from other off-farm activities, with no dependents under five years of age, and renting less than an acre of land. As for agricultural credit institutions, the largest cluster has following compositions:have mechanisms or measures established for managing loan defaults with the majority using refinancing, rescheduling, and collateral release, with variable loan payback options, and provide targeted agricultural credit to farmers such as agricultural input premium.The research findings are particularly pertinent for maize-and rice-growing farmers,and how to reduce the information gap and the implications of broadening access to credit to smallholder farmers were discussed. This study emphasizes the need for characterization for both parties to be better informed about the characteristics and dynamics of each other, all in a bid to lessen asymmetric information and thus improve access to credit.

scholarly journals FACTORS INFLUENCING CREDIT ACCESS FOR FIRMS IN THE BIOGAS SUB SECTOR IN KENYA

2017 ◽  
Vol 2 (3) ◽  
pp. 1
Author(s):  
Bernard Mulandi ◽  
Dr. Sifunjo Kisaka
Keyword(s):  
Social Sciences ◽  
Sampling Technique ◽  
Target Population ◽  
Loan Portfolio ◽  
Credit Access ◽  
Access To Credit ◽  
Qualitative And Quantitative ◽  
Factors Influencing ◽  
The Government ◽  
Descriptive Survey

Purpose: The purpose of this study was to determine the factors influencing credit access for firms in the biogas sub sector in Kenya.Methodology: The study adopted descriptive survey. The target population of the study was the firms in biogas sub sector in Kenya. A sample of 40 firms was selected from all the firms using the random sampling technique. Both qualitative and quantitative data was collected using a questionnaire that consisted of both open ended and close ended questions. Data was analyzed using Statistical Package for Social Sciences (SPSS) and results presented in frequency tables to show how the responses for the various questions posed to the respondents. The data was then analyzed in terms of descriptive statistics like frequencies, means and percentages.Results: The study findings revealed that firms in biogas sub sector had low access to credit from the banks. It was also possible to conclude that age of firm, capital invested, size of the business, financial records, risk preference and access to information influence the level of access to credit by renewable energy sector firms.Policy recommendation: It is recommended that micro financing institutions should regulate the products and services they offer to SMEs so as to have all clients enclosed in their loan portfolio. The study further recommends that banks should work hand in hand with the government to support upcoming businesses and offer financial support.

scholarly journals The Influence of Interest Rate Liberalization on Commercial Banks and Its Countermeasures

2020 ◽  
Vol 9 (1) ◽  
pp. 34
Author(s):  
Mengting Jiang
Keyword(s):  
Economic Development ◽  
Interest Rate ◽  
Commercial Banks ◽  
Economic Situation ◽  
Financial Reform ◽  
Interest Rate Liberalization ◽  
Loan Spread ◽  
Current Economic Situation ◽  
The Impact

<p>The liberalization of interest rate is an important part of the financial reform in China under the current economic situation, and it is the inevitable result of the economic development of China to a certain extent. With the deepening of interest rate liberalization reform in China, commercial banks have been affected to a certain extent; the deposit and loan spread, which accounts for the main income of commercial banks, has been narrowed, and the profit space of commercial banks has been further reduced. Therefore, this paper discusses the impact of interest rate liberalization on commercial banks and the choices that commercial banks should make under this situation.</p>

scholarly journals THE CHOICE OF CLIMATE CHANGE ADAPTATION STRATEGIES PRACTICED BY CASSAVA-BASED FARMERS IN SOUTHERN NIGERIA

AGROFOR ◽  
2020 ◽  
Vol 5 (3) ◽  
Author(s):  
Adanna HENRI-UKOHA
Keyword(s):  
Climate Change ◽  
Climate Change Adaptation ◽  
Adaptation Strategies ◽  
Credit Access ◽  
Access To Credit ◽  
Pests And Diseases ◽  
Factors Influencing ◽  
Southern Nigeria ◽  
Climate Change Adaptation Strategies ◽  
Area Data

The study on choice of climate change adaptation strategies practiced by cassavabased farmers was conducted in Southern Nigeria. The following specific objectives were achieved: to ascertain the perceived effects of climate change in the study area and to determine factors influencing the choice of using climate change adaptation strategies by cassava-based farmers in the study area. Data were obtained through the administration of questionnaire to 300 randomly sampled cassava-based farmers in the study area. Data were analyzed using descriptive statistics such as mean, frequencies, percentages and inferential statistics such as Multinomial Logit Regression technique. The result revealed that farmers perceived increase in flood incidence (91.33%), drought (90.67%), high incidence of pests and diseases (55%) and low yield (50%) as the effects of climate change in the study area. Also, from the results, 58% of the farmers chose not to employ the use of climate change adaptation strategies while only 42% decided to choose using climate change adaptation options in the study area. The result also showed that age of the farmer, farming experience, gender, marital status, level of education, household size, access to credit, access to agricultural extension services and membership of association were the factors influencing the choice climate change adaptation strategies used by the farmers. The study concluded that socioeconomic attributes of the farmers affected their choice of climate change adaptation strategies. Policy should be targeted at designing climate change adaptation technology to farmers as well as providing the enabling environment that would encourage them to employ it.

scholarly journals Challenges and measures faced by commercial banks under interest rate liberalization

2021 ◽  
Vol 14 ◽  
pp. 63-68
Author(s):  
Jiuding Li ◽  
Youchuan Cui
Keyword(s):  
Interest Rate ◽  
Commercial Banks ◽  
Debt Management ◽  
Rate System ◽  
Interest Rate Liberalization ◽  
Interest Rate Marketization ◽  
Management Concepts ◽  
New Business ◽  
Market Instability ◽  
And Control

the maturity of interest rate marketization marks the transformation of China's interest rate system from the traditional interest rate model to the new one.As an important participant in the reform of interest rate marketization, commercial banks are faced with many challenges, such as the decline of profit level, the substantial increase of operational risk, the increase of financial market instability, and the increase of liquidity risk.They should actively explore new business and management concepts, adopt measures to improve the prices of financial products and derivatives, introduce risk management and control mechanism, develop bank's intermediate business, and promote the development of bank's intermediate business In order to ensure the healthy and stable development of commercial banks, we should take positive measures such as strengthening the ability of debt management, reasonably dealing with the challenge of interest rate marketization.

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