ANALYSIS OF SOME INNER FACTORS AFFECTING THE LENDING RATE AND COMMERCIAL BANK BEHAVIOR (An Empirical Study Based on the Commercial Banking Sector of Pakistan)

2021 ◽  
Author(s):  
Zahid Bashir
Keyword(s):  
Empirical Study ◽  
Commercial Bank ◽  
Banking Sector ◽  
Commercial Banking ◽  
Factors Affecting ◽  
Lending Rate ◽  
Bank Behavior

scholarly journals Analysis of Some Inner Factors Affecting the Lending Rate and Commercial Bank Behavior

e-Finanse ◽  
2017 ◽  
Vol 12 (4) ◽  
pp. 111-119
Author(s):  
Zulfiqar Ali ◽  
Zahid Bashir ◽  
Muhammad Usman Arshad ◽  
Ahmed Ghazali ◽  
Muhammad Asif ◽  
...  
Keyword(s):  
Panel Data ◽  
Banking Sector ◽  
Pearson Correlation ◽  
Secondary Data ◽  
Commercial Banking ◽  
Capital Adequacy ◽  
Future Research ◽  
Factors Affecting ◽  
Explanatory Variables ◽  
Lending Rate

Abstract This research study aims to investigate the potential inner factors of the lending rate in the commercial banking sector of Pakistan. For this purpose, seven bank-specific explanatory variables (capital adequacy, management efficiency, liquidity, asset quality, investment to asset, loan to asset and deposit to asset ratios) were selected to determine their impact on lending behavior. Panel data techniques were emplyed on secondary data collected from the annual financial reports from a sample of ninteen major commercial banks over a period of 2007 to 2014. For the purpose of analysis, descriptive statistics, Pearson correlation and panel data techniques for regression analysis such as the fixed effect regression models were considered after conforming to the Hausman specification (1978) test. The findings of this study revealed that only four out of seven explanatory variables (ratio of investment to total assets, deposit to asset, loan to asset and liquidity ratio) have a significant relationship with lending rate. Two of the significant determinants (liquidity ratio and investment to asset ratio) are positively correlated while the remaining two significant explanatory variables (loan to asset ratio and deposit to asset ratio) are found negatively correlated with lending rate. The findings of the study are applicable to the banking sector of Pakistan. The current study ignored the use of macro factors like GDP and inflation, etc. which could be used in future research.

Коришћење конџоинт анализе за оцјену атрактивности услова кредитирања // The use of conjoint analysis to review the attractiveness of credit conditions

2012 ◽  
Vol 10 (16) ◽  
pp. 299
Author(s):  
Дарко Милуновић ◽  
Дарија Милуновић
Keyword(s):  
Social Environment ◽  
Conjoint Analysis ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Banking Sector ◽  
Aggregate Demand ◽  
Commercial Banking ◽  
Key Factors ◽  
Important Prerequisite ◽  
Positive Effects

Резиме: Повећање агрегатне тражње је један од примарних циљева сваке привреде. Постизањем овог циља се остварују разни позитивни ефекти у привреди, који се манифестују кроз повећање потрошње, раст инвестиција, али и стварање бољег друштвеног амбијента. Кључну улогу у остварењу овог циља има држава, која својим инструментима и политикама усмјерава привреду ка повећању тражње. Иако су све привреде усмјерене ка томе, многе нису у могућности да зацртани циљ и остваре.Алтернатива, у настојању да се повећа агрегатна тражња, може бити у банкарском сектору. Наиме, повећање обима кредитних пласмана директно утиче на раст тражње. Комерцијалне банке, као и сва предузећа, настоје да континуирано повећавају своју вриједност на тржишту и боље се позиционирају. Један од начина да се у томе и успије јесте повећање прихода. С обзиром на специфичност комерцијалног банкарства, та њихова тежња се остварује, између осталог, путем побољшања кредитних пласмана. Да би се повећали приходи по овом основу, веома важна претпоставка је формирање атрактивних кредитних понуда, при чему је од изузетне важности да се уважавају ставови клијената о тој проблематици. Уважавати и вредновати њихове ставове значи идентификовати кључне факторе и прилагодити понуду њима. Моћ конџоинт анализе је у томе што нам омогућава да дођемо до одговора на постављени промблем. Алгоритам ове анализе представља мултиваријациону процедуру за мјерење преференција клијената банке у вези са атрибутима кредита. Конџоинт анализа се ослања на анкетирање клијената банке са репрезентативним сетом атрибута које клијенти рангирају према преференцијама. Квантитативне информације, које се добију, могу се искористити за моделирање кредитне понуде. У примјеру, једна комерцијална банка је заинтересована за формирање нове атрактивне кредитне понуде и жели да испита утицај више фактора (атрибута) на преференције клијената, како би дошла до одговора који је кључни фактор.Summary: The increase in aggregate demand is one of the primary goals of every economy. By achieving this goal, many positive effects in economy  are also achieved which is manifested through increase in consumption, investment and creating a better social environment. The state has the key role in achieving this goal, with its instruments and policies it directs economy toward demand increase. Although all economies aspire to this goal, many are not in position to realize the goal they have set for themselves.The alternative, in an effort to increase aggregate demand, may be the banking sector. Increase in volume of loans directly influences the growth of demand. Commercial banks, like all companies, strive to continually increase their value on the market and to better position themselves. One way to succeed in doing so is to increase the income. Given the specificity of commercial banking, their goal is achieved, inter alia, by improving of lending. In order to increase income on this basis,  a very important prerequisite is the formation of attractive credit offers with the strong emphasis on respecting the views of clients on this issue. To respect and value clients` views means identifying  key factors and adjusting the offer to them.The power of conjoint analysis is that it allows us to get the answer to this problem. The algorithm of this analysis is a multivariate procedure to measure the preferences of bank clients regarding the loan attributes. Conjoint analysis relies on a survey of bank clients with the representative set of attributes that are ranked according to clients` preferences. Obtained quantitative informations can be used to model the credit offer. For example, one commercial bank is interested in forming a new attractive credit offer and wants to study the influence of several factors (attributes) on client preferences in order to determine which factor is the most important one.

scholarly journals Effect of Interest Rates on Private Sector Debt in Kenya

2020 ◽  
Vol 8 (4) ◽  
pp. p21
Author(s):  
Philip Njau Kibunja ◽  
Olanrewaju Isola Fatoki
Keyword(s):  
Private Sector ◽  
Interest Rates ◽  
Commercial Bank ◽  
Banking Sector ◽  
Weighted Average ◽  
Bank Lending ◽  
Domestic Debt ◽  
Lending Rate ◽  
Debt Market ◽  
Independent Variable

This study sought to examine the effect of interest rates on domestic private sector debt in Kenya over the 30 year period from 1990 to 2019. The dependent variable was private sector domestic debt, the independent variable was commercial bank weighted average lending rate while the control variables were annual GDP growth, extended broad money (M3) and annual USD-KES exchange rate. Using the Prais-Winstein estimator model, the regression model findings were commercial bank lending rate had an insignificant relationship with domestic debt at 95% confidence level but significant at 90% level while money supply had a negative and significant relationship with domestic debt. The study noted predominance of the banking sector in the financial sector and identified the need of a well-developed corporate debt market.

An Empirical Study of Factors Affecting Organizational Commitment in Banking Sector

2018 ◽  
Vol 06 (09) ◽  
pp. 116-123
Author(s):  
I.P. Chhabra ◽  
H. Lalwani ◽  
B. Gupta ◽  
A.M. Hyde ◽  
V. Kashyap
Keyword(s):  
Organizational Commitment ◽  
Empirical Study ◽  
Banking Sector ◽  
Factors Affecting

scholarly journals ANALISIS RIGIDITAS LENDING RATE PERBANKAN DI INDONESIA PERIODE JANUARI2001 - JUNI2004

2017 ◽  
Vol 5 (2) ◽  
pp. 193
Author(s):  
Sutomo Sutomo ◽  
Johadi Johadi
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Commercial Bank ◽  
Banking Sector ◽  
Secondary Data ◽  
Bank Lending ◽  
Lending Rate ◽  
Response Change ◽  
Independent Variable ◽  
The Difference

The research aim's to know the influence of interest rate ofSBI, exchange rate, total bank lending, supply of funds and commercial bank amount to rigidly bank lending rate in Indonesian period of January 2001 until June 2004. The research use secondary data by character of time series. The research methodology used a partial adjustment model that rigidly bank lending rate are influence by all independent variable such interest rate of SBI, exchange rate, and total bank lending, supply of fund and commercial bank amount in banking sector. The empirical results that rigidly bank lending rate are influenced by all independent variable are collectively such interest rate of SBI, exchange rate, and total bank lending, supply of fund and commercial bank amount in banking sector. But as partial, rigidly bank-lending rate are influenced by an interest rate of SBI, exchange rate, total bank lending and supply of funds and commercial bank amount, which don't have an effect to rigidly bank lending rate.The result that is suitable with the theory, where monetary instrument (interest rate of SBI) can be used to influence bank-lending rate as process transmission mechanism mon­etary policy by price channel approach. Adjustment coefficient is equal to 0,5484 which meaning 54,84 % represents the difference between bank lending rate actual with bank lending rate that desired which fulfilled to be reached in one period, where speed of adjustment bank lending rate in response change of independent variable equal to 5 months 27 day, with mean lag independent variable equal to 1,1812867 months.

United States Financial History

2021 ◽  
Author(s):  
Christy Ford Chapin
Keyword(s):  
United States ◽  
Commercial Bank ◽  
Government Policy ◽  
Banking Sector ◽  
Financial System ◽  
Commercial Banking ◽  
Financial Policy ◽  
Credit System ◽  
The Public ◽  
The Us

The history of US finance—spanning from the republic’s founding through the 2007–2008 financial crisis—exhibits two primary themes. The first theme is that Americans have frequently expressed suspicion of financiers and bankers. This abiding distrust has generated ferocious political debates through which voters either have opposed government policies that empower financial interests or have advocated proposals to steer financial institutions toward serving the public. A second, related theme that emerges from this history is that government policy—both state and federal—has shaped and reshaped financial markets. This feature follows the pattern of American capitalism, which rather than appearing as laissez-faire market competition, instead materializes as interactions between government and private enterprise structuring each economic sector in a distinctive manner. International comparison illustrates this premise. Because state and federal policies produced a highly splintered commercial banking sector that discouraged the development of large, consolidated banks, American big business has frequently had to rely on securities financing. This shareholder model creates a different corporate form than a commercial-bank model. In Germany, for example, large banks often provide firms with financing as well as business consulting and management strategy services. In this commercial-bank model, German business executives cede some autonomy to bankers but also have more ability to engage in long-term planning than do American executives who tend to cater to short-term stock market demands. Under the banner of the public–private financial system two subthemes appear: fragmented institutional arrangements and welfare programming. Because of government policy, the United States, compared to other western nations, has an unusually fragmented financial system. Adding to this complexity, some of these institutions can be either state or federally chartered; meanwhile, the commercial banking sector has traditionally hosted thousands of banks, ranging from urban, money-center institutions to small unit banks. Space constraints exclude examination of numerous additional organizations, such as venture capital firms, hedge funds, securities brokers, mutual funds, real estate investment trusts, and mortgage brokers. The US regulatory framework reflects this fragmentation, as a bevy of federal and state agencies supervise the financial sector. Since policymakers passed deregulatory measures during the 1980s and 1990s, the sector has moved toward consolidation and universal banking, which permits a large assortment of financial services to coexist under one institutional umbrella. Nevertheless, the US financial sector continues to be more fragmented than other industrialized countries. The public–private financial system has also delivered many government benefits, revealing that the American welfare state is perhaps more robust than scholars often claim. Welfare programming through financial policy tends be “hidden,” frequently because significant portions of benefits provision reside “off the books,” either as government-sponsored enterprises that are nominally private or as government guarantees in the place of direct spending. Yet these programs have heavily affected both their beneficiaries and the nation’s economy. The government, for example, has directed significant resources toward the construction and maintenance of a massive farm credit system. Moreover, policymakers established mortgage insurance and residential financing programs, creating an economy and consumer culture that revolve around home ownership. While both agricultural and mortgage programs have helped low-income beneficiaries, they have dispensed more aid to middle-class and corporate recipients. These programs, along with the institutional configuration of the banking and credit system, demonstrate just how important US financial policy has been to the nation’s unfolding history.

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