Problems of Bank Lending in Bulgaria: Information Asymmetry and Institutional Learning

1997 ◽  
Author(s):  
Kenneth Koford ◽  
Adrian E. Tschoegl
Keyword(s):  
Information Asymmetry ◽  
Bank Lending ◽  
Institutional Learning

scholarly journals Dynamics of banks' lending practices to farmers in India

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Navjot Sandhu
Keyword(s):  
Information Asymmetry ◽  
Agricultural Sector ◽  
Bank Lending ◽  
Valuable Insight ◽  
Structured Interviews ◽  
Policy Makers ◽  
Content Type ◽  
Wide Range ◽  
Lending Decisions ◽  
Insight Into

PurposeThis paper aims to evaluate whether small marginal farmers in India have financial constraints and to examine how bank managers make lending decisions.Design/methodology/approachA survey approach was employed, using semi-structured questionnaires with a sample of 42 banks and 185 farmers from the state of Punjab in India. The questionnaires and semi-structured interviews were carried out on a one-to-one basis and in focus groups, and their responses were analysed from the supply (banks) and demand (farmers) side regarding access to finance.FindingsThe results indicate that the Indian farming sector is a complex and multidimensional one that has dependency on both the private and public sectors because of its national importance to varying degrees. Financial lending decisions are dependent upon several non-quantifiable factors (culture, caste, family size, education) and relational bank lending practices. Such practices have an adverse impact on bankable loan applications, and this gives rise to moral hazards. Relational banking and recommendations minimise default rates, but this does not minimise information asymmetry. Subjectivity in decision-making persists, which is compounded by underdeveloped financial markets for small farmers, giving rise to financial exclusion and negatively impacting on economic growth. To overcome information asymmetry, banks rely on the qualitative factors and an excessive level of collateral when making lending decisions. The findings provide valuable insight into how banks make lending decisions and evaluates a complex matrix of relationships between farmers and providers of debt finance in a developing economy such as India.Practical implicationsPolicy makers nationally and internationally could use the results of this research to develop relevant and targeted policies to promote the agricultural sector through adopting efficient provision of finance for farmers. A major contribution of this research is to provide a fundamental evaluation of the issues facing farmers in accessing finance in developing countries.Originality/valueThis study provides an original empirical insight into a sector of the economy that has implications for food security for a country. The study has relevance for a wide range of stakeholders and policy makers of both developed and emerging economies in the world.

Do bank lending relationships affect corporate cash policy?

2016 ◽  
Vol 15 (4) ◽  
pp. 394-415 ◽  
Author(s):  
Huajing Hu ◽  
Yili Lian ◽  
Chih-Huei Su
Keyword(s):  
Information Asymmetry ◽  
Cash Flow ◽  
Cash Holdings ◽  
Bank Lending ◽  
Bank Loans ◽  
Liquidity Management ◽  
Content Type ◽  
Lending Relationships ◽  
Cash Policies ◽  
High Level

Purpose The purpose of this paper is to examine whether prior bank lending relationships affect firms’ liquidity management. Design/methodology/approach The authors mainly work on evaluating first, whether prior lending relationships affect corporate cash holdings? and second, whether the cash flow sensitivity of cash varies systemically with lending relationships. Three different ways are used to define lending relationships, including the lending relationship dummy, a firm’s maximum relationship intensity in terms of number of deals across all lenders and a firm’s maximum relationship intensity in terms of dollar amounts across all lenders. In addition, the paper applies two-stage least squares (2SLS) to address the concern of endogeneity between firms’ liquidity management and banking relationships. Findings The authors find that firms with lending relationships maintain a lower level of cash holdings and save less cash out of cash flow. Furthermore, the effect of lending relationships is more profound for firms with high cash flow. The results suggest that prior lending relations alleviate information asymmetry, lower the cost of capital and therefore affect firms’ propensity to retain cash and maintain a high level of cash holdings. Research limitations/implications This paper contributes to both the liquidity management literature and the literature on the value of maintaining lending relationships with banks. Researchers should take into consideration the lending relationships built over the course of the lending when assessing firms’ cash policies. Social implications Bank lending relationship mitigates the information asymmetry problem, one type of market friction, and facilitates firms’ future external financing, thereby affecting firms’ cash policies and giving more flexibility in liquidity management. The value of lending relationships distinguishes bank loans from public bonds. Therefore, firms, especially those facing more information asymmetry issue, should take into account the benefits from lending relationships in their future debt financing. Originality/value Extant literature examines how firm characteristics affect firms’ cash holdings. This paper introduces a new factor that could explain corporate cash policy.

Do risk attitude and trust moderate bank managers' risk perceptions in lending to micro, small, medium enterprises?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Harsha Talaulikar ◽  
Purva Hegde Desai ◽  
Nilesh Borde
Keyword(s):  
Risk Perception ◽  
Information Asymmetry ◽  
Perceived Risk ◽  
Risk Perceptions ◽  
Risk Attitude ◽  
Bank Lending ◽  
Cognitive Factors ◽  
Content Type ◽  
Perceived Trust ◽  
Bank Managers

PurposeThe purpose of this research is to study the antecedents of risk perceptions of bank managers towards micro, small, medium enterprise (MSME) lending, in the situation of information asymmetry, where cognitive factors assume significance over organisational norms of lending.Design/methodology/approachThis study proposed and tested a conceptual model based on the factors identified from literature review and exploratory and quantitative study. Multinomial logistic regression technique is used for quantitative analysis.FindingsThe research postulates that information asymmetry, risk attitude, perceived trust and organizational norms have a significant relationship with branch managers' perceived risk in lending to MSMEs. The research emphasized that the risk attitude of managers and perceived trust moderate the relationship between information asymmetry and perceived risk. The findings and discussions enrich the knowledge about the alleviators of constraints to MSME funding in developing nations despite information asymmetry.Originality/valueAuthors have given holistic view on the risk perception in the financial decision-making process of bank lending. The research highlights the importance of cognitive factors in decreasing the negative impact of information asymmetry on risk perception.

IPO of SMEs and Information Asymmetry

2020 ◽  
Vol 11 (2) ◽  
pp. 173-188
Author(s):  
Joo-Hwan Kim ◽  
Jin-Woo Park
Keyword(s):  
Information Asymmetry

A PROBLEM OF INFORMATION ASYMMETRY IN THE MARKET OF ORGANIC PRODUCTS

2019 ◽  
pp. 66-73
Author(s):  
B. Tagarov
Keyword(s):  
Information Asymmetry ◽  
Organic Products

Blockchain in Supply Chain: Case Study of Lottemart Ciputat

2019 ◽  
Vol 5 (1) ◽  
pp. 38-49 ◽  
Author(s):  
B. K. Handoyo ◽  
M. R. Mashudi ◽  
H. P. Ipung
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Supply Chain Management ◽  
Information Asymmetry ◽  
New Technology ◽  
Business Case ◽  
Analysis Method ◽  
Chain Management ◽  
Production Processes

Current supply chain methods are having difficulties in resolving problems arising from the lack of trust in supply chains. The root reason lies in two challenges brought to the traditional mechanism: self-interests of supply chain members and information asymmetry in production processes. Blockchain is a promising technology to address these problems. The key objective of this paper is to present qualitative analysis for blockchain in supply chain as the decision-making framework to implement this new technology. The analysis method used Val IT business case framework, validated by the expert judgements. The further study needs to be elaborated by either the existing organization that use blockchain or assessment by the organization that will use blockchain to improve their supply chain management.

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.

PENGARUH PARTISIPASI ANGGARAN, ASIMETRI INFORMASI, TEKANAN ANGGARAN DAN KOMITMEN ORGANISASI TERHADAP SENJANGAN ANGGARAN DI PEMERINTAH KABUPATEN BANYUMAS

2017 ◽  
Vol 13 (2) ◽  
pp. 142-153
Author(s):  
Ody Tegar Permana ◽  
Eliada Herwiyanti ◽  
I Wayan Mustika
Keyword(s):  
Organizational Commitment ◽  
Information Asymmetry ◽  
Linear Regression Analysis ◽  
Sample Selection ◽  
Multiple Linear Regression Analysis ◽  
Budgetary Slack ◽  
Budgetary Participation ◽  
Independent Variable ◽  
Spss Software ◽  
Government Institution

This study aims to determine the effect of budgetary participation, information asymmetry, budget pressure, and organizational commitment to budgetary slack. Population in this research is all government institution in Banyumas Regency. The sample selection was conducted by census method. Dependent variable used in this research is budget slack, while the independent variable used in this research is budget participation, information asymmetry, budget pressure, and organizational commitment. The data has been collected through questionnaires, then processed with the help of SPSS software. Based on the results of multiple linear regression analysis concluded that budgetary participation, information asymmetry, and organizational commitment affect the budget slack while budget pressure has no effect. The results of this study increasingly complement previous studies in the field of management accounting, especially in the scope of budgeting.   Penelitian ini bertujuan untuk mengetahui pengaruh partisipasi anggaran, asimetri informasi, tekanan anggaran, dan komitmen organisasi terhadap senjangan anggaran. Populasi dalam penelitian ini adalah seluruh instansi pemerintahan di Kabupaten Banyumas. Pemilihan sampel dilakukan dengan metode sensus. Variabel dependen yang digunakan dalam penelitian ini adalah senjangan anggaran, sedangkan variabel independen yang digunakan dalam penelitian ini adalah partisipasi anggaran, asimetri informasi, tekanan anggaran, dan komitmen organisasi. Data yang telah dikumpulkan melalui isian kuesioner, selanjutnya diolah dengan bantuan software SPSS. Berdasarkan hasil analisis regresi linear berganda disimpulkan bahwa partisipasi anggaran, asimetri informasi, dan komitmen organisasi berpengaruh terhadap senjangan anggaran sedangkan tekanan anggaran tidak berpengaruh. Hasil penelitian ini semakin melengkapi penelitian-penelitian sebelumnya di bidang akuntansi manajemen khususnya di lingkup penganggaran.

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