Borrower–lender distance and loan default rates: Macro evidence from the Italian local markets

2014 ◽  
Vol 71 ◽  
pp. 1-21 ◽  
Author(s):  
Carlo Milani
Keyword(s):  
Loan Default ◽  
Local Markets ◽  
Default Rates

scholarly journals One-factor model for default rates by loan type

Bankarstvo ◽  
2021 ◽  
Vol 50 (2) ◽  
pp. 88-100
Author(s):  
Miloš Božović
Keyword(s):  
Factor Model ◽  
Risk Measures ◽  
Loan Default ◽  
Macroeconomic Risk ◽  
Default Rates ◽  
Proposed Model ◽  
Default Rate ◽  
Systemic Component ◽  
Very High

This paper investigates the link between default rates by loan types and the systemic credit risk component. This link is described by a linear model that combines systemic and idiosyncratic contributions. The systemic component is a latent factor that depends directly on the aggregate loan default rate, while the idiosyncratic component drives specific variations of default rates across loan types. By transforming observable risk measures, the model can be econometrically represented as a mixed-effects model, where the systemic and idiosyncratic components represent, respectively, the slope and the intercept that are specific for each loan type individually. The proposed model is illustrated on a panel of defaulted loans of the Association of Serbian Banks. The obtained results show the model's very high power in explaining average default rates for all loan types. Thus, the aggregate default rate plays the role of a unique systemic component that mimics the influence of fundamental macroeconomic risk factors easily, without the necessity to model this relationship explicitly.

Social Capital’s Impact on College Graduation Rates, Debt, and Student Loan Defaults

2020 ◽  
pp. 152102512091887
Author(s):  
Steve Joanis ◽  
James Burnley ◽  
J. D. Mohundro
Keyword(s):  
Social Capital ◽  
Graduation Rates ◽  
Student Loan ◽  
Theory And Practice ◽  
College Graduation ◽  
Student Debt ◽  
Loan Default ◽  
College Graduation Rates ◽  
Default Rates ◽  
Debt Levels

This study extends the literature on education economics and student retention by examining social capital as a predictor of college graduation rates, student debt levels, and student loan default rates. Coleman’s social capital theory is employed to understand how social influences can impact students through external social support (i.e., social capital). The study uses school-level data from the U.S. Department of Education’s Integrated Postsecondary Education Data System and two social capital measures. Results suggest that social capital, at both the state and the community level, significantly influences graduation rates, student debt levels, and loan default rates. Implications for theory and practice are discussed.

scholarly journals P2P Lending platforms in Malaysia: the awareness among young adults

F1000Research ◽  
2021 ◽  
Vol 10 ◽  
pp. 1096
Author(s):  
Lan Thi Phuong Nguyen ◽  
Saravanan Muthaiyah ◽  
Malick Ousmane Sy
Keyword(s):  
Young Adults ◽  
Pilot Study ◽  
Undergraduate Students ◽  
Financial Literacy ◽  
Online Questionnaire ◽  
Loan Default ◽  
Default Rates ◽  
P2p Lending ◽  
High Level ◽  
Shed Light

Background - Since 2016, the Securities Commission (SC) in Malaysia has given licenses to only eleven P2P lending platforms. Such lending platforms are expected to disrupt the lending services of traditional lenders in the coming years. However, being still in their infant stages, it is essential to know the extent to which such platforms are made known to potential investors out there. This study examines the extent to which young adults are aware of Malaysia's eleven P2P lending platforms.    Methods - A sample of 65 undergraduate students majoring in finance and accounting was used for this pilot study. An online questionnaire was designed with three main parts: demographic, financial literacy, and P2P lending awareness.   Results - Findings show that more than half of respondents in the sample are not aware of P2P lending platforms in Malaysia.  Most of the respondents are financially literate to certain degrees. Those aware of their presence underestimated the potentially high level of their default rates and misunderstood that investor would be fully protected by such platforms when a loan default.   Conclusions -The study's findings have shed light on the current awareness of P2P lending platforms among Malaysian young adults, potential investors of such platforms in the coming years.

scholarly journals Loan Delinquency: Some Determining Factors

2021 ◽  
Vol 14 (7) ◽  
pp. 320
Author(s):  
Fennee Chong
Keyword(s):  
The Other ◽  
Loan Default ◽  
Financial Flexibility ◽  
Credit Management ◽  
Empirical Results ◽  
Other Hand ◽  
Default Rates ◽  
Determining Factors ◽  
Education Levels ◽  
And Gender

The main objective of this paper is to investigate the determining factors of loan delinquencies from the perspective of borrower attributes and loan characteristics. Empirical results indicated that the borrower-lender distance factor, collateral, education levels as well as availability of a monthly budget are having significant effects on loan delinquencies. On the other hand, level of income and gender have no significant impact on repayment behaviour. Credit is good as it allows the borrowers financial flexibility, however, debt is viewed as bad if it was not managed properly. Therefore, a correct attitude towards credit management and self-discipline can be encouraged to reduce loan default rates.

scholarly journals Does Collateral Affect the Access and Loan Payment Behavior of MSMEs?

2020 ◽  
Vol 23 (2) ◽  
Author(s):  
Lanang Tanu Prihantoro ◽  
Chaikal Nuryakin
Keyword(s):  
Service Rate ◽  
Fund Management ◽  
Loan Default ◽  
Logit Regression ◽  
A Value ◽  
Default Rates ◽  
Service Rates ◽  
The Government ◽  
Logit Regression Model ◽  
The Impact

Various problems regarding the distribution of revolving funds at the Ministry of Cooperatives and SMEs have prompted the government to transfer its management through LPDB-KUMKM (Revolving Fund Management Institution for Cooperatives and MSMEs) for the sake of financial accountability and professionalism. Several improvements have been made, among others, through collateral and service rates that have never been applied before. The service rate was applied first, with a value lower than the bank interest rate. This study examines the impact of collateral and service rates on the loan default rates. This study uses data of loan developments of LPDB-KUMKM partners from the beginning to 2018. The Logit Regression Model is used to support the analysis. This study's results indicate that collateral has a negative correlation with the growth in loan default rates. This study's results are expected to be taken into consideration by the government in regulating financing needs, especially regarding collateral and service rates, so that the accessibility of MSMEs to obtain financing from LPDB-KUMKM will increase.

Russian Central Bank to amend bank rescue programme

2017 ◽  
Keyword(s):  
Economic Growth ◽  
Central Bank ◽  
Banking Sector ◽  
Credit Expansion ◽  
Loan Default ◽  
Credit Growth ◽  
Content Type ◽  
Default Rates

Subject Bank rescues, failures and regulation in Russia. Significance The banking sector has shown positive dynamics in 2017: increased profitability and capitalisation, and a resumption in credit growth. The Central Bank of Russia (CBR) felt obliged to step in and rescue the large Otkritie and B&N banks, raising questions about why they were allowed to expand unsustainably. Impacts Faster credit growth is essential to boosting economic growth above present modest levels. High loan-default rates in sectors such as construction and trade will hamper credit expansion and delay their recovery. The pervasive state presence in the banking sector will distort and reduce competition.

Institutional Accountability: A Comparison of the Predictors of Student Loan Repayment and Default Rates

2017 ◽  
Vol 671 (1) ◽  
pp. 202-223 ◽  
Author(s):  
Robert Kelchen ◽  
Amy Y. Li
Keyword(s):  
Minority Group ◽  
State Level ◽  
Student Loan ◽  
Underrepresented Minority ◽  
Loan Default ◽  
Loan Repayment ◽  
First Generation College Student ◽  
For Profit ◽  
Default Rates ◽  
First Generation College

The federal government holds colleges accountable if too many of their students default on loan repayment, but the default measure traditionally used captures only a fraction of students who are struggling to repay their loans. The 2015 College Scorecard dataset introduced a new loan repayment metric, showing that the percentage of students who have not reduced the principal balance of their loans by at least $1 over a given period of time far outstrips the traditional loan default measure. Using a sample of 3,595 colleges, we test the extent to which student demographics, institutional characteristics, and state-level economic factors are associated with repayment rates and default rates. We also examine whether factors associated with loan repayment rates change between one and seven years after students begin repayment. We find that characteristics traditionally associated with economic disadvantage, including being a first-generation college student or a member of an underrepresented minority group, tend to be associated with lower loan repayment rates, as does attendance at for-profit colleges. These factors are just as or more strongly associated with longer-term repayment rates compared to shorter-term repayment rates.

scholarly journals Using Nonperforming Loan Ratios to Compute Loan Default Rates With Evidence From European Banking Sectors

2016 ◽  
Vol 1 (1) ◽  
pp. 47-65 ◽  
Author(s):  
Dobromił Serwa
Keyword(s):  
Loan Default ◽  
Macroeconomic Factors ◽  
Additional Information ◽  
Nonperforming Loans ◽  
Loan Portfolios ◽  
Default Rates ◽  
Maturity Structure ◽  
Loan Supply ◽  
European Banking ◽  
Loan Quality

This research is the first attempt to calibrate default rates of loan portfolios using raw data on nonperforming loans and some additional information on the maturity structure of the loan portfolios. We applied a simple model of loan quality, controlling for loan maturities and dynamics of loan supply. Results for nine national aggregate indices of nonperforming housing loans in the Czech Republic, Greece, Ireland, Hungary, Latvia, Poland, Portugal, Romania, and Spain revealed strong differences in the dynamics of calibrated default probabilities between countries. Calibrated default rates were correlated with macroeconomic factors, but the linkages depended on the markets investigated.

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