Strategic behavior of nontraditional lenders in agricultural credit markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Iuliia Tetteh ◽  
Michael Boehlje ◽  
Anil K. Giri ◽  
Sankalp Sharma
Keyword(s):  
Interest Rates ◽  
Strategic Behavior ◽  
Business Models ◽  
Credit Markets ◽  
Primary Data ◽  
Supply Side ◽  
Agricultural Credit ◽  
Content Type ◽  
Study Approach ◽  
Funding Sources

PurposeThis paper examines credit products, operational performance and business models employed by nontraditional lenders (NTLs) in agricultural credit markets.Design/methodology/approachTwo research methods were employed in this study: (1) an executive interview to collect primary data and (2) a case study approach to analyze the findings and develop insights.FindingsThe findings indicate the presence of significant differences among lenders across and within three categories of NTLs (large volume, vendor financing and collateral-based NTLs). For example, collateral-based NTLs employ different strategies focusing on types of loans, funding sources, commodities they support and geographic coverage to further segment the market. NTLs in this study were able to capture market by successfully identifying gaps in the supply side of agricultural credit and developing products that meet the needs of that niche (e.g. heavy renters, large operations, producers seeking fixed interest rates for term loans, financially fragile producers). Most of the interviewed NTLs had credit standards comparable to those of traditional lenders and consider them both competitors and partners since many NTLs partner with traditional lenders on participation loans, loan servicing and/or sourcing funds.Originality/valueThe supply side of a nontraditional lending has not been studied extensively due to the proprietary nature of data. The executive interviews conducted in this study allowed for accumulation of industry data, which is not available otherwise.

Procurement 4.0: factors influencing the digitisation of procurement and supply chains

2018 ◽  
Vol 24 (4) ◽  
pp. 965-984 ◽  
Author(s):  
Florian Bienhaus ◽  
Abubaker Haddud
Keyword(s):  
Supply Chains ◽  
Industry 4.0 ◽  
Online Survey ◽  
Business Models ◽  
Industrial Revolution ◽  
Primary Data ◽  
Content Type ◽  
Procurement Process ◽  
Enabling Technologies ◽  
The Impact

Purpose While digitisation is a key driver of the fourth industrial revolution (Industry 4.0); organisations have different approaches to deal with this topic to get a clearer picture of the opportunities and challenges concerning the digital transformation. The purpose of this paper is to identify the impact of digitisation on procurement and its role within the area of supply chain management. The research will also explore potential barriers to digitising procurement and supply chains and ways to overcome them. Finally, the significance of potential enabling technologies to the digitisation will also be examined. Design/methodology/approach A quantitative approached utilising an online survey was used to collect the primary data for this study. Data were collected from 414 participants directly involved with procurement or related business functions and work for different organisations in different industries. The survey included eight items about the impact of digitisation on organisational performance in the area of procurement and supply chains; ten items related to key barriers to digitisation of organisations and ways to overcome them; and seven items about enabling technologies to leverage procurement procedures and processes digitisation. All of these items utilised the Likert five-point level of agreement scale. Findings The findings indicate that digitisation of procurement process can yield several benefits including: supporting daily business and administrative tasks, supporting complex decision-making processes, procurement will become more focussed on strategic decisions and activities, procurement will become a strategic interface to support organisational efficiency, effectiveness, and profitability, and supporting the creation of new business models, products, and services. The authors were also able to confirm that there are barriers to digitising procurement process and supply chains and such barriers found in existing procedures, processes, capacities, and capabilities. Finally, the significance of a number of enabling technologies to the digitisation process was revealed. Originality/value To the best of the authors’ knowledge, this is the first study of its kind with participants located world-wide. Industry 4.0 as a topic had been explored within different business areas and functions but very limited research specifically explored potential impact, barriers, and enabling technologies of procurement 4.0. The results can be beneficial for organisations already implemented Industry 4.0 or planning to do so. The study can also benefit academic scholars interested in the researched topic, business professionals, organisations within different sectors, and any other party interested in understanding more the concept of procurement 4.0.

Monetary policy, bank leverage and liquidity

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Van Dan Dang ◽  
Khac Quoc Bao Nguyen
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Monetary Shocks ◽  
Policy Changes ◽  
Financial Leverage ◽  
Content Type ◽  
Funding Sources ◽  
Dynamic Panels ◽  
Asset Portfolio ◽  
Policy Bank

PurposeThe study explores how banks design their financial structure and asset portfolio in response to monetary policy changes.Design/methodology/approachThe authors conduct the research design for the Vietnamese banking market during 2007–2018. To ensure robust findings, the authors employ two econometric models of static and dynamic panels, multiple monetary policy indicators and alternative measures of bank leverage and liquidity.FindingsBanks respond to monetary expansion by raising their financial leverage on the liability side and cutting their liquidity positions on the asset side. Further analysis suggests that larger banks' financial leverage is more responsive to monetary policy changes, while smaller banks strengthen the potency of monetary policy transmission toward bank liquidity. Additionally, the authors document that lower interest rates induce a beneficial effect on the net stable funding ratio (NSFR) under Basel III guidelines, implying that banks appear to modify the composition of liabilities to improve the stability of funding sources.Originality/valueThe study is the first attempt to simultaneously examine the impacts of monetary policy on both sides of bank balance sheets, across various banks of different sizes under a multiple-tool monetary regime. Besides, understanding how banks organize their stable funding sources and illiquid assets amid monetary shocks is an innovation of this study.

The current farm downturn vs the 1920s and 1980s farm crises

2018 ◽  
Vol 78 (4) ◽  
pp. 396-411 ◽  
Author(s):  
Wendong Zhang ◽  
Kristine Tidgren
Keyword(s):  
Interest Rates ◽  
Agricultural Sector ◽  
Balance Sheet ◽  
Real Income ◽  
Economic Downturn ◽  
Agricultural Credit ◽  
Content Type ◽  
Farm Crisis ◽  
Low Interest Rates ◽  
Sudden Collapse

Purpose The purpose of this paper is to examine the current farm economic downturn and credit restructuring by comparing it with the 1920s and 1980s farm crises from both economic and regulatory perspectives. Design/methodology/approach This paper closely compares critical economic and regulatory aspects of the current farm downturn with two previous farm crises in the 1920s and 1980s, and equally importantly, the golden eras that occurred before them. This study compares key aggregate statistics in land value, agricultural credit, lending regulations, and also evaluates the situations and impacts on individual farmer households by using three representative case studies. Findings The authors argue that there are at least three economic and regulatory reasons why the current farm downturn is unlikely to slide into a sudden collapse of the agricultural markets: strong, real income; growth in the 2000s, historically low interest rates; and more prudent agricultural lending practices. The current farm downturn is more likely a liquidity and working capital problem, as opposed to a solvency and balance sheet problem for the overall agricultural sector. The authors argue that the trajectory of the current farm downturn will likely be a gradual, drawn-out one like that of the 1920s farm crisis, as opposed to a sudden collapse as in the 1980s farm crisis. Originality/value The review provides empirical evidence for cautious optimism of the future trajectory of the current downturn, and argues that the current downturn is much more similar to the 1920s pattern than the 1980s crisis.

scholarly journals Economic Factors Influence on Funding of the Supply-Side of Housing in Kenya: Case Study Nairobi

2016 ◽  
Vol 11 (10) ◽  
pp. 194 ◽  
Author(s):  
Faith Wambui Kanjumba ◽  
Amos Njuguna ◽  
George Achoki
Keyword(s):  
Interest Rates ◽  
Negative Relationship ◽  
Housing Development ◽  
Primary Data ◽  
Supply Side ◽  
Economic Factors ◽  
Development Factor ◽  
Inflation Rates ◽  
The Government ◽  
The Relationship

Housing plays a very important role in the social economic development of any nation. One set of factors that impacts on the funding of the supply-side of housing are economic factors comprising market forces, cost of inputs, the macro economy and the cost of funding. This paper sets to establish the relationship between economic factors and funding of the supply-side of housing in Kenya and also the effect of the major stakeholders on such a relationship if it exists. Using an explanatory form of approach in research design a survey was conducted where primary data was collected by self-administered questionnaires from a random sample of 212 branches in Nairobi of financial institutions drawn from a population of 43 commercial banks, 9 deposit-taking MFIs and three major financiers of housing development. Factor analysis, correlation analysis and ordinal logit regression were used to determine the relationship between funding of housing and economic factors. Results indicated a negative relationship between economic factors and funding of housing development. It was also established that there exists a positive moderating effect of stakeholders on the relationship between economic factors and funding of housing development. The implication being the government and policy makers should ensure that interest rates and inflation rates are kept at a level that will encourage investments in housing, with the government acting then more as an enabler.

Using Fintech in scaling up Islamic microfinance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Salman Ahmed Shaikh
Keyword(s):  
Mathematical Model ◽  
Financial Services ◽  
Financial Support ◽  
Institutional Design ◽  
Supply Side ◽  
Empirical Estimation ◽  
Content Type ◽  
Funding Sources ◽  
Islamic Microfinance ◽  
The Mathematical Model

Purpose This study aims to propose a hybrid microfinance model that integrates various Islamic commercial and social finance institutions through Fintech for efficient and impactful results. The microfinance model caters to the financial and social intermediation needs through a set of financial services and non-financial support. Design/methodology/approach The study uses both a mathematical model and an empirical estimation using micro panel data to establish the core problem in microfinance operations. Conclusions from the mathematical model and estimated results in the empirical analysis are used to suggest an institutional design which embeds technology in the delivery of Islamic microfinance in an integrated structure. For screening and incentive conditions, the study gives illustration through numerical examples. Findings The mathematical model highlights the need for financial sustainability, outreach, scale and complementariness of non-financial factors such as commitment, repayment incentives and skills enhancement multiplier. In light of this, the proposed Islamic microfinance model is outlined to create synergies by integrating a diversity of funding sources through social savings and impact investments. The programme also blends financial services with non-financial support to ensure engagement and commitment on a long-term basis. It uses Fintech in various demand and supply-side operations to show how technology embeddedness can help in achieving cost efficiencies and extend outreach. Originality/value It is the first study in integrated institutional design in Islamic microfinance literature that embeds Fintech in both demand side and supply side operations comprehensively. The proposed model is conducive for enhancing outreach, scale and impact in the Islamic microfinancial services.

scholarly journals Effectuation logic in digital business model transformation

2019 ◽  
Vol 26 (6/7) ◽  
pp. 811-830 ◽  
Author(s):  
William W. Baber ◽  
Arto Ojala ◽  
Ricardo Martinez
Keyword(s):  
Business Model ◽  
Model Transformation ◽  
Business Models ◽  
High Tech ◽  
Structured Interviews ◽  
Content Type ◽  
Digital Platforms ◽  
Study Approach ◽  
Digital Business Models ◽  
Causal Logic

Purpose The purpose of this paper is to study how digital business models evolve when entrepreneurs move to new digital platforms and how this evolution is related to effectuation and causation logics. Design/methodology/approach This study applies a multiple case study approach to investigate how digital business models change in small, Japanese high-tech firms providing their innovations through different digital platforms. To investigate digital business models, this study considers the elements that comprise general business models. The case firms were selected based on size, products and transitions from physical to various digital platforms. Semi-structured interviews were conducted with the key decision-makers from the case firms. Findings The findings show that through digital transformation, the case firms’ digital business models evolved by following effectuation logic as well as causal logic. All the firms employed causal logic when moving to new platforms, among other actions. The case firms used effectual logic with success for product development and adjustments to their network. Especially firms providing video games relied on effectuation for high impact products. Effectual logic did not play a role at all in changes to value delivery and had only little impact on revenue structures. Originality/value This research helps understand how digitalization of platforms and subsequent moves to newer digital platforms improve a firm by changing the business model elements through effectuation and causation logics. This research extends the understanding of digital business model transformation to a more granular level, business model elements.

Tourism to serve culture: the evolution of an Aboriginal tourism business model in Australia

2020 ◽  
Vol 75 (4) ◽  
pp. 663-680
Author(s):  
Pascal Scherrer
Keyword(s):  
Business Model ◽  
Business Models ◽  
Intergenerational Learning ◽  
Market Demand ◽  
Case Study Methodology ◽  
Content Type ◽  
Study Approach ◽  
Start Up ◽  
Indigenous Tourism

Purpose This paper aims to track the evolution of an innovative Aboriginal tourism business model with deliberate social and community enterprise objectives in a remote setting. Design/methodology/approach It adopts an in-depth exploratory case study approach to discover key characteristics of an emerging tourism enterprise. The qualitative data sources include publically available planning, promotional and organizational materials, in-depth interviews with key informants and on-site observations. Yunus et al.’s (2010) social business model provides the framework for the case analysis. Findings Findings highlight the gradual deepening of Indigenous engagement – from simply providing a place for a non-Indigenous tourism business – to running a fully Indigenous-controlled, staffed and themed on-country tourism business. Complementing existing non-Indigenous tourism experiences reduced the need for start-up infrastructure and market recognition, thus reducing business risk for the Traditional Owners. Despite substantial changes in the business structure in response to political and maturation factors, the core motivations seemed to remain strong. The business model facilitates value creation to stakeholders in varying ways. Research limitations/implications The contextual nature of Indigenous tourism reflects limitations of qualitative case study methodology. Practical implications The resulting business model provides a contextually appropriate structure to engage in tourism for achieving cultural and societal goals. It mitigates against the identified risk of low market demand for Indigenous tourism experiences by connecting with established non-Indigenous tourism products, while also allowing for product offering independent thereof. Social implications Social benefits are high and have potential for replication in similar contexts elsewhere. Originality/value The paper contributes to the emerging research on culturally appropriate business models in Indigenous tourism contexts and validates a strategy to overcome low demand. It offers a model that for the tourist facilitates a sustainable experience which enables co-production while for the hosts fosters community resilience, intergenerational learning and improved livelihoods. The case highlights opportunities for further research into the interrelationship, dependencies and thresholds between the social and economic profit equations, particularly in the context of the culture conservation economy.

Nontraditional lenders and access to local agricultural credit markets by beginning and female farmers

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Denis Nadolnyak ◽  
Valentina Hartarska
Keyword(s):  
Financial Services ◽  
Credit Markets ◽  
Substitution Effect ◽  
Credit System ◽  
Agricultural Credit ◽  
Content Type ◽  
Access To Credit ◽  
Alternative Financial Services ◽  
Female Farmers ◽  
Branch Density

PurposeThe purpose of this study is to evaluate if access to local branch infrastructure of the farm credit system institutions (FCS), banks and credit unions (BCU), and alternative financial services (AFS) providers is related to the use of credit from non-traditional lenders (NTLs). The focus is on beginning and women operators who are typically credit constrained and thus more likely to suffer from closures of bank branches and consolidation of traditional agricultural lenders.Design/methodology/approachInformed by Detragiache et al. (2000), the authors specify farmers’ use of loans as a function of their access to credit (measured by the branch density of each lender type) along with operator’s and operation’s controls. The measures of loans by NTLs (number, use, share and lender type) require the use of Poisson, Probit, Tobit and Multinomial Logit techniques. This study utilizes individual producer data from the 2018 Agricultural Resource Management Survey and 2018 county-level branch density data for FCS, BCU and AFS providers.FindingsAccess to credit from FCS is helpful to BFRs only, while access to AFS is associated with the use of loans from NTLs by women but not by BFRs. As expected, access to BCU credit matters for the use of loans from NTLs, with a complementary effect for BFRs but a substitution effect for women’s use of such loans.Originality/valueThere are no studies on local agricultural credit markets in the US that evaluate the implications from changes in access to credit on credit-constrained borrowers and their use of NTLs’ credit.

The new European crowdfunding regulation: facilitating cross-border services

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marco Brand
Keyword(s):  
European Union ◽  
Financial Services ◽  
Business Models ◽  
Service Providers ◽  
The European Union ◽  
Content Type ◽  
Cross Border ◽  
Funding Sources ◽  
Capital Markets Union ◽  
The Impact

Purpose To explain the new Crowdfunding Regulation to market participants and to describe the impact of the Crowdfunding Regulation on current crowdfunding business models in the European Union. Design/methodology/approach This article provides an overview of the new Crowdfunding Regulation with a focus on the provisions concerning cross-border services (“European Passport”) and the new authorization requirements for crowdfunding service providers. Findings In particular the introduction of the European passport will open new funding sources for project owners. This together with the harmonized authorization requirements of crowdfunding service providers is expected to contribute to further growth of the crowdfunding market in the European Union. The Crowdfunding Regulation is a further step on the way to a Capital Markets Union in Europe and regulates crowdfunding for the first time on a European level. Practical implications The Crowdfunding Regulation does not cover all existing crowdfunding business models in Europe (e.g., consumer as project owners and qualified subordinated loans are exempted). Insofar, the rules of the Member States continue to apply with the consequence of a partial fragmentation of applicable regulations. Originality/value Expert guidance from experienced financial-services lawyer.

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