Disruptions and the protracted effects of the COVID-19 lockdown in the non-bank financial institution sector in Ghana

2021 ◽  
Vol 32 (1) ◽  
pp. 78-92
Author(s):  
James Atta Peprah
Keyword(s):  
Corporate Governance ◽  
Survey Data ◽  
Financial Institution ◽  
Rapid Response ◽  
Microfinance Institutions ◽  
Loan Portfolio ◽  
Interest Income ◽  
Savings And Loan ◽  
Digital Channels ◽  
Delivery Channel

This paper assesses disruptions in the non-bank financial institution (NBFI) sector and the protracted effects of COVID-19 and the lockdown on the NBFI sector. The paper focuses on microfinance institutions in Ghana using rapid response survey data obtained from the Ghana Microfinance Institutions Network between January 2020 and April 2020. Poor corporate governance, improper documentation of transactions, and impaired loan portfolio among others were antecedents to the disruptions. Regarding the lockdown effects, we found that savings value contracted and the possibility of a further deteriorating portfolio is anticipated thus reducing interest income. The use of digital channels of delivering savings and loan products increased while the physical delivery channel decreased. The regulator needs to have a second look at microfinance regulation in Ghana. Policy should focus on expanding and upscaling the use of digital and remote banking means in reaching out to clients.

Factors Affecting the Sustainability of Microfinance Institutions: A Case of Malawi Microfinance Institutions

2021 ◽  
Author(s):  
Helex Kayembe ◽  
Yunjian Lin ◽  
George N. Chidimbah Munthali ◽  
Wu Xuelian ◽  
Lazarus Obed Livingstone Banda ◽  
...  
Keyword(s):  
Corporate Governance ◽  
Portfolio Management ◽  
Developing Economies ◽  
Statistical Significance ◽  
Least Square ◽  
Microfinance Institutions ◽  
Cross Sectional Survey ◽  
Loan Portfolio ◽  
Cross Sectional ◽  
Factors Affecting

Abstract Background: Micro Finance Institutions (MFIs) have been used as a tool for poverty alleviation in many developing economies globally, including Malawi. However, their sustainability in many countries has been dependent solely on loan repayment, donor aid, and subsidies. Aim: This study aimed at investigating the factors that influence the sustainability of MFIs in Malawi. Methods: A cross-sectional survey was conducted from November to December 2020 among the MFIs employees in the central region of Malawi. Convenience and purposive sampling techniques were used to collect data online using a google form sent via social media platforms. Data were analyzed using IBM SPSS software with Statistical significance placed at .05. Results: 120 respondents completed the survey representing a 79.3% response rate, of which 63% were male. The majority of the respondents fell within the age group of 31-40 years, representing 58%, having attained universities and vocational colleges' education level, representing 32.8%. With an experience of above 16 years, representing 41.2% of which were branch managers, representing 49.6%. The results of the ordinary least square regression indicated that reporting and loan management system (RLMS) (β=0.200, P=0.021), corporate-governance (β=0.257, P=0.004), and commercialization (β=0.161, P=0.047) were positively significantly influencing the sustainability of MFI. On the other hand, loan design/type (β =-0.211, P=0.006), loan portfolio management (β =-0.179, P=0.050) were found to be negatively impacting the MFI. Lastly, variables of over-indebtedness (B= 0.077, P=0.426), loan disbursement (β =0.121, P=0.104) were found statistically insignificant. Conclusion: Our study argues that commercialization, standardized reporting, and effective loan portfolio management systems, stakeholder-based approach to corporate governance, and favored board independence through scale and cost management is critical to improving MFIs' financial sustainability.

Determinants of agri-lending in Kenya

2019 ◽  
Vol 79 (5) ◽  
pp. 598-613 ◽  
Author(s):  
Michelle Maloba ◽  
Abdul Latif Alhassan
Keyword(s):  
Financial Institutions ◽  
Agricultural Sector ◽  
Financial Institution ◽  
Ordinary Least Squares ◽  
Microfinance Institutions ◽  
Loan Portfolio ◽  
Agricultural Credit ◽  
Content Type ◽  
Errors Estimation ◽  
Practical Implications

Purpose The purpose of this paper is to examine the factors that influence financial institutions’ lending to the agricultural sector in Kenya. Design/methodology/approach The paper employs a panel data of 15 licensed financial institutions (commercial banks and deposit-taking microfinance institutions) from 2011 to 2016. The random effects and ordinary least squares panel corrected standard errors estimation techniques are employed to estimate the effect of liquidity, size, equity, lending rate (LR), type of financial institution and non-performing loans on agri-lending. Findings The results indicate that only 3.9 per cent of loan portfolio of the sampled financial institutions were advanced to the agricultural sector over the study period. From the panel regression analysis, the paper finds agricultural credit risk to reduce lending to the agricultural sector while size, LR and type of financial institution were observed to significantly increase agricultural lending. Compared to 2011, agri-lending was also observed to have declined between 2012 and 2015. Practical implications The findings highlight important indicators for enhancing lending to the agricultural sector in Kenya and other emerging economies. Originality/value As far as the authors are concerned, this presents the first empirical evidence on the determinants of agri-lending by financial institutions in Kenya.

Effects of Financial Innovations on Profitability for Deposit Taking Microfinancing Institutions in Kenya

2018 ◽  
Vol 9 (6) ◽  
pp. 529-536
Author(s):  
Martin Khoya Odipo ◽  
Keyword(s):  
Financial Institutions ◽  
Positive Relationship ◽  
Financial Institution ◽  
Secondary Data ◽  
Financial Statements ◽  
Descriptive Statistics ◽  
Primary Data ◽  
Microfinance Institutions ◽  
Financial Innovations ◽  
Strong Positive Relationship

Recent studies have documented that innovations improve profitability of firms. This article documents that deposit taking micro financial institutions that have adopted financial innovations have increased their profitability. The study covered five years between 2009-2013. Both primary and secondary data were used in the study. Primary data was obtained through administration of drop and pick questionnaires to selected employees of the institutions. Secondary data was obtained from financial statements and management reports of these deposit taking microfinance institutions. Data was analyzed using descriptive statistics, return on asset and multi-liner regression model to determine the effect of each financial innovation applied on profitability on the micro-financial institution. The results showed that most deposit taking microfinance institutions adopted these financial innovations in their current operations. There was strong positive relationship between individual innovations and profitability. In line with profitability ROA also showed improvement each year after the adoption of these financial innovations.

Corporate governance and the social performance: investigation on Tunisian financial institutions

2018 ◽  
Vol 60 (6) ◽  
pp. 1412-1431
Author(s):  
Nejia Nekaa ◽  
Sami Boudabbous
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Financial Institution ◽  
Stock Exchange ◽  
Social Performance ◽  
Financial Sector ◽  
Content Type ◽  
The Social ◽  
Questionnaire Method ◽  
The Impact

Purpose The purpose of this study is to show the specificities of the corporate governance of Tunisian financial institutions and the impact of the internal mechanisms of corporate governance of these institutions on their social performance. It is therefore interesting to establish the existing relationship between these mechanisms of corporate governance and the performance of a financial firm. Design/methodology/approach This study aims to study the financial sector, generally characterized by its opacity, its regulation, its evolution and its obscurity. Therefore, a study based on the questionnaire method was recommended. The questionnaire is intended for managers. Therefore, the authors interviewed 138 managers of Tunisian financial institutions dispersed between agencies and headquarters in different regions (Gabes, Tozeur, Gafsa, Sfax, Sousse and Tunisia). Findings As a result, an impact on performance was observed according to the empirical study. Therefore, the authors can conclude an essential role of internal mechanisms for improving the social performance of a financial institution. The empirical findings in this paper lead to important conclusions. Indeed, the variables measuring the governance mechanisms have divergent effects on the social performance of the financial institutions subject to the sample. For the variables board of directors, confidence, culture, auditing, they have a positive effect. While, the incentive remuneration effect negatively the social performance. Originality/value This study will be based essentially on the financial sector in Tunisia: the credit institutions (22 banks), the establishments of leasing (eight companies of leasing), two factoring companies and two banks of cases which are listed on the Stock Exchange of Tunis (BVMT).

scholarly journals Reuters: Principles Of Trust Or Propaganda?

2011 ◽  
Vol 27 (6) ◽  
pp. 93 ◽  
Author(s):  
Henry I. Silverman
Keyword(s):  
Corporate Governance ◽  
Content Analysis ◽  
Middle East ◽  
Survey Data ◽  
Direct Action ◽  
Significant Shift ◽  
Affective Behavior ◽  
Middle East Conflict ◽  
Logical Fallacies ◽  
Ethical Failures

This paper examines a sample of fifty news-oriented articles related to the Middle East conflict published on the Reuters proprietary websites across a three month study window. A combination of Ethnographic Content Analysis and primary survey data are employed to identify, code and validate reporting/ethical failures in the articles, i.e., propaganda, logical fallacies, and violations of the Reuters Handbook. Tests are run to measure for 1) shifts in audience attitudes and support for the primary belligerent parties in the Middle East conflict following readings of the sample and, 2) associations between the reporting/ethical failures and audience attitudes/support. Over 1,100 occurrences of reporting/ethical failures across forty-one subcategories are identified and a significant shift in audience attitudes and support following article readings is observed. Significant associations are found between 1) the use of atrocity propaganda and audience favorability/sympathy toward the Arabs/Palestinians; 2) the use of the appeal to pity fallacy and audience favorability/sympathy toward the Arabs/Palestinians; and 3) the use of atrocity propaganda, appeal to pity and appeal to poverty fallacies, and audience motivation to take supportive action on behalf of the Arabs/Palestinians. It is inferred from the evidence that Reuters engages in systematically biased storytelling in favor of the Arabs/Palestinians and is able to influence audience affective behavior and motivate direct action along the same trajectory. This reflects a fundamental failure to uphold the Reuters corporate governance charter and ethical guiding principles.

scholarly journals LEGAL CERTAINTY CHANNELING FUNDS RURAL AGRIBUSINESS ENTERPRISE DEVELOPMENT WITHIN THE FRAMEWORK OF THE DEVELOPMENT OF MICROFINANCE INSTITUTIONS AGRIBUSINESS

2018 ◽  
Vol 9 (2) ◽  
Author(s):  
Asril Tinambunan ◽  
Martin Roestamy
Keyword(s):  
Development Program ◽  
Microfinance Institutions ◽  
Legal Certainty ◽  
Government Programs ◽  
Distribution Management ◽  
Savings And Loan ◽  
Management And Development ◽  
The Government ◽  
Managing Risk ◽  
To Receive

One of the government programs in overcoming the limited access of farmers to capital is through the Rural Agribusiness Development Program (PUAP). However, in the implementation there are irregularities that have impeded of the PUAP Program so as to create legal uncertainty. The purpose of this research is to know the mechanism of distribution, management and development of legal institution of Micro Finance Institution of Agribusiness (MFI-A). The research method used is the sociological juridical approach to find out the mechanism of channeling PUAP funds and the development of MFI-A. This research is also supported by normative approach on the data of legal material in the form of Law Number 19 of 2013 and Act Number 1 of 2013. The mechanism of distributing PUAP funding that is just, effective and targeted is done by selection and verification. Selection is done by selecting Gapoktan to be nominated to receive PUAP. Furthermore, field verification conducted by the District Technical Team. Management of MFI-A as development of Gapoktan saving and loan business unit is done by developing LKM-A product, managing risk, establishing organizational structure and SOP, and using information and computerization system. The form of legal entity in the future for the most suitable MFI-A is a savings and loan cooperative.Keywords: Legal Certainty, PUAP, Gapoktan, and MFI-A

Sistem Pendukung Keputusan Pemberian Jumlah Pinjaman Kepada Calon Nasabah Bumdes Menggunakan Metode Topsis (Studi Kasus Bumdes Gergas Mandiri Kecamatan Wampu)

2021 ◽  
Vol 1 (2) ◽  
pp. 76-82
Author(s):  
Dwi Krisma Wati
Keyword(s):  
Decision Support ◽  
Financial Institution ◽  
Optimal Solution ◽  
Ideal Solution ◽  
Unequal Distribution ◽  
Savings And Loan ◽  
Relative Proximity ◽  
Negative Ideal Solution ◽  
Loan Amount

The development of the savings and loan business is currently growing rapidly as a financial institution in alleviating poverty . BumDes is a business owned by a village or sub-district that is engaged in lending or channeling funds to people who need to develop their business. The BUMDes conducts deliberation meetings in determining loan granting. There is often disagreement between the parties that will borrow. This resulted in unequal distribution of loans to BUMDes members. Although the determination of the granting of the loan amount is fully determined by the BUMDes However, this Decision Support System will display the highest to lowest priorities of the prospective customer , so that it will facilitate and assist the BUMDes in making decisions. TOPSIS uses the principle that the chosen alternative must have the closest distance from the positive ideal solution and the longest distance (farthest) from the negative ideal solution to determine the relative proximity of an alternative to the optimal solution.

scholarly journals The impact of AAOIFI governance disclosure on Islamic banks performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tawida Elgattani ◽  
Khaled Hussainey
Keyword(s):  
Corporate Governance ◽  
Regression Model ◽  
Financial Institution ◽  
Ordinary Least Squares ◽  
Annual Reports ◽  
Islamic Banks ◽  
Least Squares Regression ◽  
Content Type ◽  
The Impact ◽  
Governance Disclosure

Purpose This study aims to investigate the impact of the accounting and auditing organisation for Islamic financial institution (AAOIFI) governance disclosure on the performance of Islamic banks (IBs). Design/methodology/approach The ordinary least squares regression model was used to test the impact of AAOIFI governance disclosure on the performance of 126 IBs from 8 countries that mandatorily adopt the AAOIFI standards for three years (2013–2015). In this regression model, return on asset (ROA) and return on equity (ROE) are the dependent variables, while AAOIFI governance disclosure is the independent variable. Corporate governance mechanisms, firm characteristics, year dummy and country dummy are used as control variables. Findings This paper found an insignificant relationship between AAOIFI governance disclosure and IBs performance. Research limitations/implications This study highlighted the implication that the current research may help IBs and encourage them to disclose more information in annual reports, especially those related to AAOIFI governance standards because following good corporate governance leads to good financial performance. The major limitation of the paper is that it is only focussed on two measurements of bank performance – ROA and ROE; it would be good to use other firm performance measures, such as profit margin. Originality/value This study provides new empirical evidence on the impact of AAOIFI governance disclosure on IBs performance.

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