scholarly journals Foreigners vs. Natives: Bank Lending Technologies and Loan Pricing

2018 ◽  
Vol 64 (8) ◽  
pp. 3792-3820 ◽  
Author(s):  
Thorsten Beck ◽  
Vasso Ioannidou ◽  
Larissa Schäfer
Keyword(s):  
Bank Lending ◽  
Loan Pricing ◽  
Lending Technologies

Effect of Corporate Social Responsibility on Pricing of Small Business Loans

2021 ◽  
pp. 1226-1249
Author(s):  
Markku Vieru ◽  
Janne Peltoniemi
Keyword(s):  
Corporate Social Responsibility ◽  
Small Business ◽  
Social Responsibility ◽  
Small Firms ◽  
Management Practices ◽  
Bank Lending ◽  
Loan Pricing ◽  
Small Business Finance ◽  
Small Business Loans ◽  
Corporate Social

This study analyzes corporate social responsibility (CSR) issues in small business finance in Finland, especially within relationship banking. The study combines credit-file data obtained from a large local Finnish bank with a CSR questionnaire conducted with the bank's business loan managers. The credit-file data contain specific details of CSR characteristics, as well as relationship-, collateral-, firm-, and loan-specific characteristics. CSR, typically considered as a non-financial item, contains value-relevant financial information which affects the loan pricing level. The results show that both overinvestment in CSR and the value created by CSR are valid but connected to different CSR characteristics. Overinvestment is associated with the environment and value creation with diversity and employees. The results contribute to the understanding of the characteristics of CSR in the context of small business bank lending, as well as more generally to important implications for small firms, banks, and management practices.

Monetary Policy Pass-through, Ownership and Crisis: How Robust is the Indian Evidence?

2021 ◽  
Vol 15 (4) ◽  
pp. 456-483
Author(s):  
Jugnu Ansari ◽  
Saibal Ghosh
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Bank Lending ◽  
Loan Pricing ◽  
Lending Channel ◽  
Private Banks ◽  
Monetary Policy Shock ◽  
Pass Through ◽  
The Interest Rate ◽  
The Impact

Employing disaggregated data for 2001–2016, this study investigates the lending and loan pricing behaviour of state-owned and domestic private banks in response to monetary policy. Three major findings emerge. First, although both the interest rate and the bank lending channels are relevant for monetary pass-through, there is a trade-off: the impact of the former is much higher than the latter, although it occurs with a significant lag. Second, domestic private banks have a far greater response to a monetary policy shock under the interest rate channel, whereas state-owned banks display a greater response under the bank-lending channel. And finally, state-owned banks cut back lending during periods of crises, although no such response is manifest in domestic private banks. JEL Codes: C23, D4, E43, E52, G21, L10

scholarly journals Impact of Banking Competition on the Use of Soft Information

2019 ◽  
Vol 23 (2) ◽  
pp. 127-146
Author(s):  
Jérémie Bertrand ◽  
Jean-Christophe Statnik
Keyword(s):  
Soft Information ◽  
Relationship Banking ◽  
Relationship Lending ◽  
Loan Pricing ◽  
Banking Competition ◽  
The Past ◽  
The Impact ◽  
The Relationship ◽  
Lending Technologies

Over the past 20 years, scholars have discussed the impact of banking competition on the choice between transactional and relationship lending technologies extensively, but no resolution has emerged. To address these questions, this article uses a new measure of relationship lending that accounts for the actual level of soft information that banks use in their loan pricing. With this new measure, the analysis reveals that banks prefer to implement relationship lending technology when competition is weak. In addition and in accordance with extant theoretical conclusions, the shape of the relationship between competition and relationship banking is nonlinear and concave.

Effect of Corporate Social Responsibility on Pricing of Small Business Loans

2021 ◽  
pp. 146-169
Author(s):  
Markku Vieru ◽  
Janne Peltoniemi
Keyword(s):  
Corporate Social Responsibility ◽  
Small Business ◽  
Social Responsibility ◽  
Small Firms ◽  
Management Practices ◽  
Bank Lending ◽  
Loan Pricing ◽  
Small Business Finance ◽  
Small Business Loans ◽  
Corporate Social

This study analyzes corporate social responsibility (CSR) issues in small business finance in Finland, especially within relationship banking. The study combines credit-file data obtained from a large local Finnish bank with a CSR questionnaire conducted with the bank's business loan managers. The credit-file data contain specific details of CSR characteristics, as well as relationship-, collateral-, firm-, and loan-specific characteristics. CSR, typically considered as a non-financial item, contains value-relevant financial information which affects the loan pricing level. The results show that both overinvestment in CSR and the value created by CSR are valid but connected to different CSR characteristics. Overinvestment is associated with the environment and value creation with diversity and employees. The results contribute to the understanding of the characteristics of CSR in the context of small business bank lending, as well as more generally to important implications for small firms, banks, and management practices.

scholarly journals Bank lending technologies and credit availability in Europe: What can we learn from the crisis?

2019 ◽  
Vol 95 ◽  
pp. 128-148 ◽  
Author(s):  
Giovanni Ferri ◽  
Pierluigi Murro ◽  
Valentina Peruzzi ◽  
Zeno Rotondi
Keyword(s):  
Bank Lending ◽  
Credit Availability ◽  
Lending Technologies

Small Business Lending

2019 ◽  
pp. 430-469
Author(s):  
Allen N. Berger ◽  
Lamont K. Black
Keyword(s):  
Small Business ◽  
Small Businesses ◽  
Technological Progress ◽  
Global Financial Crisis ◽  
Bank Lending ◽  
Relationship Lending ◽  
Small Business Lending ◽  
Credit Supply ◽  
The Global Financial Crisis ◽  
Lending Technologies

Small businesses are engines of economic growth that are fueled in large part by bank lending. We examine the roles of technology and regulation in the supply of small business credit. Technological changes increase small business credit supply through the adoption of new hard-information-based lending technologies, such as FinTech lending, as well as by improving existing lending technologies. Technological progress has more modest effects on the processing and transmission of soft information used in relationship lending. Regulatory changes, such as pre-crisis deregulation and post-crisis reregulation, directly affect bank small business lending. The combination of technological progress and geographical deregulation also has resulted in more bank consolidation and competition, both of which have mixed effects on small business credit supply. Lastly, we cover the challenges and mitigating factors in explaining the dramatic drop in small business credit availability during the Global Financial Crisis and the very slow growth during the subsequent recovery.

Agrarian receipts as a tool for the structural transformation of financial and credit relations in the agrarian business of the region

2019 ◽  
pp. 40-53
Author(s):  
Yuliia Nehoda
Keyword(s):  
Comparative Analysis ◽  
Retrospective Analysis ◽  
Structural Transformation ◽  
Pilot Project ◽  
Bank Lending ◽  
Economic Benefits ◽  
Advantages And Disadvantages ◽  
New Instrument ◽  
Agricultural Business ◽  
Business Entities

The subject of the research – is a set of organizational-economic relations arising in the process of structural transformation of financial and credit relations in the agricultural business. The purpose of the article is a retrospective analysis of structural transformations of financial and credit relations in the agricultural business, evaluation of the effectiveness and feasibility of the introduction of agricultural receipts as a new instrument of lending to the agricultural business of the regions. Methodology of work – system-structural and comparative analyzes (to determine the effectiveness of the crediting mechanism according to the agricultural receipts of the farmers of the region); monographic (when studying the problems of the functioning of the mechanism of lending to agrarians by agrarian receipts) economic analysis (when carrying out a comparative analysis of the mechanism of classical bank lending to the agrarian business and the mechanism of lending to agrarians according to agrarian receipts); modeling and forecasting (when determining ways to overcome the existing deficiencies in the mechanism of lending to agrarian business entities of the region according to agrarian receipts). The results of the work – a retrospective analysis of the structural transformation of financial and credit relations in the agricultural business was carried out. The mechanism of crediting agrarians according to agrarian receipts and the scale of its distribution in the agrarian business of the region are considered. A comparative analysis of the mechanism of classical bank lending to the agrarian business and the mechanism of lending to agrarians according to agrarian receipts was carried out. In the framework of the pilot project “Agrarian receipts in Ukraine” of the international financial corporation (IFC) in partnership with the Swiss Confederation in Ukraine, the example of the Poltava region defined the effectiveness of the crediting mechanism according to the agrarian receipts of the agrarians of the region. The advantages and disadvantages of the mechanism of crediting the subjects of the agrarian business on agrarian receipts are noted. The ways to overcome the existing shortcomings of the mechanism of crediting the subjects of the agrarian business of the region according to agricultural receipts are determined. Conclusions – according to the results of the conducted research, the effectiveness of the mechanism of lending to the agricultural business of the regions according to agricultural receipts was proved, its advantages and disadvantages were noted, and attention was also focused. Proposed in Art. 7 of Law No. 5479-VI clearly delineate cases and restrictions on the debtor’s reimbursement of expenses incurred by the lender with the acquisition of the right to grow and harvest the pledged crop of agricultural products, which will ensure the principle of equality of parties on economic benefits and distribution of credit risks according to agricultural receipts.

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