scholarly journals Analysis of Preferable Occupation between Merchant and Islamic Bank Clerk in Bank Syariah Mandiri (BSM) Based on a Hadith about Riba

2018 ◽  
Vol 11 (2) ◽  
pp. 264
Author(s):  
An'im Kafabih ◽  
Asfi Manzilati
Keyword(s):  
Interest Rate ◽  
Islamic Bank ◽  
Ordinary Regression ◽  
The Interest Rate ◽  
The Relationship

This paper investigates the relationship between occupation to interest rate between Islamic bank clerk and merchant who export or import goods. As Prophet Muhammad ever said that at the end people still eat the “the dust of riba” event they want to avoid it, this implies that what people’s occupation will also be affected by the rate of interest rate. Introducing two model that represent the relationship between two occupation, merchant and Islamic bank clerks, and using ordinary regression, this study finds that statistically, as people want to be a merchant, they will gain much benefit when the rate of interest raise, however, when people prefer to become Islamic bank clerk (especially in BSM as case study), their income will harm as the rate of interest increase. In addition, when the interest rate rise, the benefit which is gained by merchant much greater than the loss of Islamic bank profit (BSM) because of the higher coefficient value of merchant rather than Islamic bank profit (BSM).

scholarly journals Sensitivity Analysis of Fuzzy Activity-Based Life Cycle Costing

2018 ◽  
Vol 225 ◽  
pp. 05002
Author(s):  
Freselam Mulubrhan ◽  
Ainul Akmar Mokhtar ◽  
Masdi Muhammad
Keyword(s):  
Sensitivity Analysis ◽  
Life Cycle ◽  
Interest Rate ◽  
Life Cycle Costing ◽  
High Impact ◽  
Final Output ◽  
Left And Right ◽  
The Interest Rate ◽  
Operation Cost

A sensitivity analysis is typically conducted to identify how sensitive the output is to changes in the input. In this paper, the use of sensitivity analysis in the fuzzy activity based life cycle costing (LCC) is shown. LCC is the most frequently used economic model for decision making that considers all costs in the life of a system or equipment. The sensitivity analysis is done by varying the interest rate and time 15% and 45%, respectively, to the left and right, and varying 25% of the maintenance and operation cost. It is found that the operation cost and the interest rate give a high impact on the final output of the LCC. A case study of pumps is used in this study.

scholarly journals Revival of Legacy of Tooke and Gibson: Implications for Monetary Policy

2015 ◽  
Vol 4 (2) ◽  
pp. 37-58 ◽  
Author(s):  
Atiq-ur Rehman
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Monetary Economics ◽  
Mainstream Economic ◽  
Monetary Policy Rules ◽  
Simple Logic ◽  
The Interest Rate ◽  
Economic Thinking ◽  
The Relationship ◽  
Effectiveness Of Monetary Policy

Abstract The monetary policy rules used by central banks these days are based on the assumption that inflation could be reduced by increasing interest rate. On contrary, Tooke (1774-1858), the forefather of monetary economics, was of the view that the relationship between interest rate and inflation should be positive. His view was based on simple logic, ‘interest is a part of cost, and therefore, the increase in interest rate should increase inflation by increasing cost of production (Tooke, 1838)’. Tooke’s view has got support from a number of empirical evidence including Gibson (1923) who found positive correlation between two variables for UK data over a period of 200 years. On the other hand, mainstream economic thinking on which the actual monetary practices are based ignored any possibility of positive relationship between interest rate and inflation throughout the history. The existence of Tooke’s cost side effects of monetary policy is a serious concern because if these effects exist than the use of monetary policy would be counterproductive. Using the data from entire globe, I attempt to explore the nature of relationship between the interest rate and inflation. I found that the data supports the perception of Tooke and Gibson and denies that the effectiveness of monetary policy currently adapted by the correlation between interest rate and inflation is positive. The results are robust to sample size, sample period, and various definitions of interest rate and inflation.

scholarly journals LENDING RELATIONSHIP DAN DAMPAKNYA TERHADAP AKSES KREDIT BAGI USAHA KECIL DAN MIKRO: (STUDI PADA USAHA SIMPAN PINJAM OLEH BADAN USAHA MILIK DESA/BUMDES DI PULAU LOMBOK)

2020 ◽  
Vol 9 (4) ◽  
pp. 369
Author(s):  
Embun Suryani ◽  
Donny Oktaviansyah ◽  
Adi Septiawan
Keyword(s):  
Interest Rate ◽  
Information Asymmetry ◽  
Credit Access ◽  
Lending Relationships ◽  
Loan Approval ◽  
The Interest Rate ◽  
Information Intensity ◽  
The Relationship ◽  
Positive Effect ◽  
Micro Credit

The informal sector in developing countries like Indonesia is able to grow rapidly and is able to absorb labor. However, the ability to access credit is one of the main obstacles for the development and growth of Small and Micro Enterprises (SMEs). Microcredit is characterized with the existence of information asymmetry, for that we need a different approach in distributing financing for SMEs, one of which is to apply the approach lending relationship. The research was conducted at 12 Lembaga Keuangan Mikro (LKM) BUMDes in Lombok. The results indicate that the variable lending relationship positively affects credit approval and the period for credit approval submitted by customers. It means that loan approval and approval timeframes increase with the increase in the intensity of the relationship between LKM BUMDes and micro customers. The interest rate and the application of collateral do not have a positive effect on lending relationships. The implication of these results is to illustrate the intensity of interactions between borrowers and lenders can provide credit access for micro customers. Another implication shows that the microcredit distribution strategy must be carried out by building continuous relationships with customers to reduce the occurrence of information asymmetry in micro-credit distributionKeywords :Asymmetric information, intensity of relationship, interest rate, collateral, micro credit, LKM BUMDes

scholarly journals Using Expected Geometric Values to Calculate the Cost of Interest in Hyper-inflationary Environments: the Case of Venezuela

2019 ◽  
Vol 2 (2) ◽  
pp. 10-21
Author(s):  
J. Tim Query ◽  
Evaristo Diz Cruz
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Expected Value ◽  
Defined Benefit ◽  
High Inflation ◽  
Defined Benefit Plans ◽  
The Interest Rate ◽  
The Cost ◽  
The Impact ◽  
The Relationship

It is of vital importance to explore the relationship between pensions and inflationary levels because this forms a link between social policy and economic development in the context of Venezuela’s challenging economy and its impact on the development of pension systems. With such rampant inflation, companies must adjust the rates of salary increases to avoid a significant decrease in the purchasing power of income from defined benefit plans. Our research seeks to find the possibility of using an average geometric rate of future interest rates expressed as an expected value to discount obligations. Consequently, the cost of interest associated with the actuarial liability of the Benefit plans increases substantially in the next fiscal period to the actuarial valuation, sometimes compromising its sustainability over time. In order to minimize this problem, two scenarios for calculating the interest rate are proposed to smooth out this volatile effect; both are based on a geometric average with the expectation of working life or with the duration of the obligations. We are careful to use a reasonable interest rate that is not so high as to compromise the cash flow, resulting in skewed annual results of the companies. Our research seeks to find the possibility of using an average geometric rate of future interest rates expressed as an expected value to discount obligations. We formulate and actuarially evaluate two different scenarios, based on job expectations and Macaulay's duration, of the obligations that allow the sustainability of the plan in an environment of extremely high inflation. To illustrate the impact of the basic annual expenditure of the period, the results of an actuarial valuation of an actual Venezuelan company were utilized. Despite some companies adjusting their book reserves increasingly through a geometric progression, the amounts associated with the costs of interest would be huge in any such adjustment pattern. Therefore, we suggest adoption of one of the alternatives described in the research.

Optimal capital structure in agricultural cooperatives and implications for equity retirement

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jeffrey Royer ◽  
Gregory McKee
Keyword(s):  
Interest Rate ◽  
Capital Structure ◽  
Financial Statements ◽  
Rate Of Return ◽  
Content Type ◽  
Optimal Capital Structure ◽  
Return On Capital ◽  
Optimal Capital ◽  
The Interest Rate ◽  
The Relationship

PurposeThis paper presents a model for determining the optimal capital structure for cooperatives and explores the relationship between financial leverage and the ability of cooperatives to retire member equity.Design/methodology/approachA model is developed to determine the optimal capital structure and explore the relationship between capital structure and the rate at which a cooperative can retire member equity. Using data from cooperative financial statements, ordinary least-squares regressions are conducted to test two hypotheses on capital structure and equity retirement.FindingsThe model shows that the optimal capital structure is determined by the ratio of the rate of return on capital employed to the interest rate on borrowed capital and the required level of interest coverage. The regressions suggest that cooperatives choose their capital structure largely according to the rate of return on capital employed and the interest rate in a manner consistent with maximizing the rate of return on equity and that the rate at which cooperatives can retire member equity is directly related to leverage.Research limitations/implicationsThe model does not consider unallocated earnings. Analysis of the relationship between leverage and equity retirement yields results contrary to the assumptions of earlier studies.Practical implicationsCooperatives can use the model because the necessary parameters are easily understood and readily available from financial statements, lenders and industry sources.Originality/valueThe model is developed specifically for determining the capital structure of cooperatives and differs substantially from the corporate model. A theoretical basis is provided for the relationship between leverage and equity retirement.

Savings and Loan Capital and the Use of Interest Rate Swaps

1992 ◽  
Vol 36 (2) ◽  
pp. 50-57
Author(s):  
David Vang
Keyword(s):  
Interest Rate ◽  
Financial Institutions ◽  
Interest Rate Risk ◽  
Interest Rate Swap ◽  
Savings And Loan ◽  
Interest Rate Swaps ◽  
Flexible Rate ◽  
The Interest Rate ◽  
The Relationship ◽  
Rate Swap

This paper models the relationship between interest rate swaps and capital in savings and loan associations. The interest rate swap is a way in which financial institutions exchange the flexible rate on their liabilities with a fixed interest rate to hedge themselves from interest rate risk, and therefore reduce the need for a capital cushion. The empirical evidence, however, shows that a small capital cushion reduces the firm's possibility of using interest rate swaps because no partner is willing to engage in a rate swapping contract with a firm that does not have adequate capital and soundness.

scholarly journals Investigating the Causal Linkages among Inflation, Interest Rate, and Economic Growth in Pakistan under the Influence of COVID-19 Pandemic: A Wavelet Transformation Approach

2021 ◽  
Vol 14 (6) ◽  
pp. 277
Author(s):  
Muhammad Azmat Hayat ◽  
Huma Ghulam ◽  
Maryam Batool ◽  
Muhammad Zahid Naeem ◽  
Abdullah Ejaz ◽  
...  
Keyword(s):  
Interest Rate ◽  
Granger Causality ◽  
Wavelet Transformation ◽  
Multi Scale ◽  
Long Run ◽  
Causality Tests ◽  
Short Run ◽  
The Interest Rate ◽  
The Relationship ◽  
Cross Wavelet

This research is the earliest attempt to understand the impact of inflation and the interest rate on output growth in the context of Pakistan using the wavelet transformation approach. For this study, we used monthly data on inflation, the interest rate, and industrial production from January 1991 to May 2020. The COVID-19 pandemic has affected economies around the world, especially in view of the measures taken by governmental authorities regarding enforced lockdowns and social distancing. Traditional studies empirically explored the relationship between these important macroeconomic variables only for the short run and long run. Firstly, we employed the autoregressive distributed lag (ARDL) cointegration test and two causality tests (Granger causality and Toda–Yamamoto) to check the cointegration properties and causal relationship among these variables, respectively. After confirming the long-run causality from the ARDL bound test, we decomposed the time series of growth, inflation, and the interest rate into different time scales using wavelet analysis which allows us to study the relationship among variables for the very short run, medium run, long run, and very long run. The continuous wavelet transform (CWT), the cross-wavelet transform (XWT), cross-wavelet coherence (WTC), and multi-scale Granger causality tests were used to investigate the co-movement and nature of the causality between inflation and growth and the interest rate and growth. The results of the wavelet and multi-scale Granger causality tests show that the causal relationship between these variables is not the same across all time horizons; rather, it is unidirectional in the short-run and medium-run but bi-directional in the long-run. Therefore, this study suggests that the central bank should try to maintain inflation and the interest rate at a low level in the short run and medium run instead of putting too much pressure on these variables in the long-run.

scholarly journals Analisis kelayakan finansial usaha beras aruk pada masa pandemi covid-19 (studi kasus: kelompok tani Sumber Jaya Desa Tempilang Kabupaten Bangka Barat)

Agromix ◽  
2021 ◽  
Vol 12 (2) ◽  
pp. 92-101
Author(s):  
Eni Karsiningsih
Keyword(s):  
Interest Rate ◽  
Cultural Heritage ◽  
Research Method ◽  
Food Additives ◽  
Payback Period ◽  
Feasibility Analysis ◽  
Financial Feasibility ◽  
The People ◽  
The Interest Rate

Introduction: During the Covid-19 pandemic, aruk rice became one of the healthy alternative food additives for consumption. Aruk rice is a local food of cultural heritage for the people of Bangka Belitung that must be preserved. This study aims to analyze the financial feasibility of the aruk rice business during the Covid-19 pandemic carried out by the Sumber Jaya Farmers Group, Tempilang Village, West Bangka Regency. Method: The research method used is a case study. Sampling was carried out by census, which took 8 aruk rice makers who produced during the Covid-19 pandemic. Analysis of the financial feasibility of aruk rice business is carried out by calculating NPV, Net B/C ratio, IRR, Payback Period, and BEP. Result: The results showed that during the Covid-19 pandemic, the aruk rice business provided a 12% higher profit, which was Rp. 866,700 per month compared to before the Covid-19 pandemic. Based on the financial feasibility analysis, the aruk rice business during the Covid-19 pandemic is still feasible. Based on the results of the financial feasibility analysis at the interest rate of the BRI Micro KUR loan at 6% per year, the NPV value is Rp. 10,400,400, Net B/C ratio is 1.5, IRR is 128%, and the Payback Period or payback period. investment for 4 months 5 days. The aruk rice business will experience a Break Event Point when the income is IDR 218,200 per month, the production is 9 kg per month and the price is IDR 16,200 per kilo. Conclusion: Based on the results of the financial feasibility analysis, the rice aruk business conducted by the Sumber Jaya Farmers Group during the Covid-19 pandemic is still feasible.  

scholarly journals Impact of Fiscal Deficit and Government Debt on Interest Rate in Pakistan

2019 ◽  
pp. 1-17
Author(s):  
Najia Shakir ◽  
Sami Ullah ◽  
Salim Ullah Khan ◽  
Muhammad Qasim
Keyword(s):  
Interest Rate ◽  
Money Supply ◽  
Government Debt ◽  
Gdp Per Capita ◽  
Fiscal Deficit ◽  
Per Capita ◽  
The Government ◽  
The Interest Rate ◽  
Relationship Of ◽  
The Relationship

The current study was conducted in the year 2014 in Pakistan to investigate the impact of fiscal deficit and government debt on the interest rate.  Data on selected macroeconomic variables like fiscal deficit, government debt, GDP per capita, money supply and volume of trade etc. from the year 1990 to 2012.  The study also has tried to find out that how the interest rate in the country is affected by the government debt and fiscal deficit. Augmented Dickey-Fuller test was run to address the stationary issue in the data, and then Ordinary Least Square (OLS) model test was run to check the relationship among the variables. Two models were set in the study. In the first model, the relationship of GDP per capita, money supply, total debt servicing and volume of trade showed a significant relationship with the fiscal deficit, while in the second model the relationship of inflation, fiscal deficit, money supply, government debt and public debt showed a significant relationship with the interest rate. Policy makers are advised to focus on the increase of DGP/Capita and export volume. In order to sustain the rate of inflation, the government may regulate the money supply and public borrowing.

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