Working capital management, board structure and Tobin's q ratio of Thai listed firms

PurposeThis study investigates whether the integration between working capital management (WCM) and the structure of a firm's board of directors impacts its Tobin's q ratio. The sample set consists of 319 Thai listed firms with 3,190 firm-year observations from 2010 to 2019.Design/methodology/approachThe two-step generalized method of moments (two-step GMM) model is employed to address endogeneity.FindingsThe empirical results show that having both (1) a high level of net working capital holdings, a long period of net trade cycles or using an aggressive policy in working capital investment and (2) a more diverse board of directors decrease a firm's Tobin's q ratio. Conversely, when a firm's managers employ an aggressive policy for their working capital financing and the board structure of their firms is highly diverse, the firm's Tobin's q ratio increases. This indicates the appropriateness of some WCM policies is dependent on the characteristics of a firm's board of directors. Thus, the different integration between WCM and board structure may elicit dissimilar outcomes for a firm's Tobin's q ratio.Originality/valueTo their knowledge, the authors are the first to investigate the influence of the integration between WCM and board characteristics on Tobin's q ratio.

The Challenges of FinTech Inclusion and Digitization of SMEs in Indonesia

The COVID-19 pandemic has changed people's digital behavior and caused giant leaps in various digital businesses. SMEs face various challenging factors in the transformation of their business into a digital ecosystem. Currently, Indonesia is the country with the fastest-growing digital economy and FinTech in ASEAN. Fintech plays a vital role in the digital economy, especially helping SMEs go digital and accelerate their business performance, such as venture capital financing, digital payment services, and financial arrangements. However, the role of fintech has not been maximized in increasing financial inclusion. There are still various obstacles and challenges such as technology adoption, financial literacy, digital literacy, financial inclusion, and fintech inclusion, and various program efforts from all stakeholders to bring SMEs into the digital ecosystem. Without cooperation, increasing financial literacy and financial inclusion and fintech inclusion will be challenging to achieve.

The Impact of Financing Risk on Islamic Banking Performance in Indonesia

The financing risk is a significant issue in the Islamic banking industry that affects its performance. This research aims to examine the factors that influence financing risk on the financial performance of Islamic banking in Indonesia. This study utilized time-series data quarterly from 2009-2020 collected from three types of Islamic banking in Indonesia: Islamic Commercial Bank (ICB), Islamic Business Unit (IBU), and Islamic Rural Bank (IRB). It was analyzed using multiple regression estimation techniques with the Ordinary Least Square (OLS) method. This study revealed that the Islamic banks’ financing risk is significantly influenced by bank capital, financing, economic growth, inflation, and central bank’ rate (BI rates), both negatively and positively. In detail, the increase of bank capital, financing, and economic growth will reduce the financing risks, whilst inflation and BI rate increase the financing risks. The findings also disclosed that Islamic banks' financial performance is influenced by bank capital, operating costs, financing risks, inflation, and BI rates. Thus, the decrease in bank capital, operational costs, and financing risks will subsequently decrease the financial performance, while the increase of inflation and BI rates will increase the financial performance of Islamic banks. Economic growth is the most influential factor in reducing financing risk, while financing risk is the most significant factor in improving banks’ financial performance. The government's efforts to boost economic growth are crucial to reducing financing risks and improving the financial performance of Islamic banks.==========================================================================================================ABSTRAK – Dampak Risiko Pembiayaan terhadap Kinerja Bank Syariah di Indonesia. Risiko pembiayaan merupakan persoalan utama bagi industri perbankan termasuk perbankan syariah. Tujuan dari penelitian ini adalah untuk menganalisis faktor-faktor yang mempengaruhi risiko pembiayaan dan pengaruhnya terhadap kinerja keuangan perbankan syariah di Indonesia. Objek penelitian meliputi Bank Umum Syariah, Unit Usaha Syariah dan Bank Perkreditan Rakyat syariah. Model analisis menggunakan teknik estimasi regresi berganda dengan menggunakan metode Ordinary Least Square (OLS). Penelitian ini menggunakan data time-series periode kuartalan dari 2009-2020. Hasil penelitian ini menunjukkan bahwa risiko pembiayaan bank syariah dipengaruhi oleh modal bank, pembiayaan, pertumbuhan ekonomi, inflasi dan BI Rate. Hasil ini mengindikasikan bahwa peningkatan modal bank, pembiayaan, dan pertumbuhan ekonomi akan mengakibatkan penurunan risiko pembiayaan, sementara peningkatan inflasi dan BI Rate akan meningkatkan risiko pembiayaan. Selain itu, hasil kajian juga mendapati bahwa kinerja keuangan bank syariah dipengaruhi oleh modal bank, biaya operasional bank, risiko pembiayaan, inflasi dan BI Rate. Secara detil, penurunan modal bank, biaya operasional dan risiko pembiayaan akan meningkatkan kinerja keuangan bank syariah, sementara peningkatan inflasi dan BI Rate akan meningkatkan kinerja keuangan. Faktor yang berpengaruh paling terhadap penurunan risiko pembiayaan adalah pertumbuhan ekonomi. Penurunan risiko pembiayaan merupakan faktor yang berpengaruh paling besar terhadap peningkatan kinerja keuangan perbankan syariah. Upaya pemerintah untuk mendorong pertumbuhan ekonomi merupakan langkah yang sangat strategis mengurangi risiko pembiayaan dan meningkatkan kinerja keuangan perbankan syariah di Indonesia.

The impacts of IPO financing and monetary policy on economic growth in Bangladesh: Evidence from a dynamic assessment

Bangladesh is considered a fast-growing emerging economy and the new Asian tiger. The increasing need for capital funds in Bangladesh is largely met by banks, mainly due to the country’s underdeveloped nature of the stock market. Bank financing is assumed to be influenced by monetary policies, particularly, by bank rates adopted each year by the central bank of Bangladesh. On the other hand, while some studies stress the need for strengthening the debt and equity securities markets to support Bangladesh’s fast economic growth, debates swirl about whether or to what extent the stock market contributes to economic growth in the country. To address the understanding gap, in this paper, we examine the impact of capital financing through equity initial public offerings (IPO) and bank rate on the economic growth of Bangladesh. We use annual data from 1981 to 2019 and employ an autoregressive distributive lag (ARDL) framework to examine the long-run and short-run impacts of IPO financing and bank rate on GDP growth rate. Our findings suggest the existence of a long-run cointegrating relationship between IPO financing, bank rate, and GDP growth. We find that IPO financing does not have a significant long-run impact but shows only a one-period short-run positive impact on economic growth. On the other hand, bank rate shows a long-run negative and a one-period short-run positive impact on economic growth. Findings overall suggest that IPO financing does not significantly contribute to long-run economic growth while giving only a temporary boost. Further, increases in bank rate - as one would expect - depress economic growth in the long-run, while generating herd behavior immediately. Our findings stress the need for encouraging more quality IPO issuances, increasing the issuance size, and ensuring proper utilization of the funds by IPO issuers to make the capital market a key driver of economic growth.

THE MANAGEMENT OF VENTURE CAPITAL AS A TYPE OF FINANCIAL RESOURCES: GOALS & OBJECTIVES

In the context of Ukraine’s integration into the world market, there is a growing interest in creating a control system for all stages of venture capital activities. The mechanism of effective management of venture activities of an enterprise should become a tool for establishing this system. The system of information flows is of great importance, which provides information to the process of making management decisions on a risky innovative project at a venture capital enterprise. The purpose of the venture business is to make a profit on the invested funds [1]. Unlike simple investment, venture capital is the most risky form of capital investment. However, if the project is successful, venture capital investment is the most profitable. Venture investment is, on the one hand, a way of financing the innovative vector of the economy, on the other, an innovative form of entrepreneurship. The main goal of venture capital financing is that the monetary capital of some entrepreneurs and the intellectual capabilities of others (original ideas or technologies) are combined in the real sector of the economy in order to bring profit to both types of entrepreneurship in a new company.

Handling the Financing Problem: A Narrative Study of Agricultural Capital Financing Murabahah Contracts at BMT

This research aimed to determine how the implementation of agricultural capital financing with the murabahah contract, the factors that caused problematic financing, and how to handle problematic financing, especially in the financing of agricultural capital with a murabahah contract at BMT BUS KPU Tuban Branch. Agricultural capital financing is a type of financing that is quite rare for BMT in Tuban District, because in providing agricultural financing, BMT is very vulnerable to suffer losses due to problematic financing. This research was a field research with a qualitative approach. Data collection techniques were carried out through interviews and documentation. Data sources consisted of primary and secondary data. Data analysis used analytic descriptive technique. The results explained that the murabahah financing procedure implemented at BMT BUS KPU Tuban Branch on agricultural capital financing practices can be said to be good, because in its implementation each prospective member of the financing was obliged to meet the applicable requirements and procedures, the factors that cause problematic financing were external and internal factors, The strategy for handling problematic financing at BMT BUS KPU Tuban Branch used a family approach, intensive billing, financing restructuring, collateral takeover, collateral execution and finally if it was not successful with financing elimination. Keywords: Agricultural Capital Financing, Murabahah Contract, Problematic Financing

Persepsi Ibu-Ibu Nasabah Terhadap Program Pembiayaan Paket Masa Depan Bank BTPN Syariah (Mobile Marketing Syariah) X Koto Tanah Datar

This study aims to determine the perceptions of women customer of the Bank BTPN Syariah MMS (Mobile Marketing Syariah) X Koto Tanah Datar Future Package financing program. The method used in this research is qualitative method. Data collection techniques: Observation, Interview and Documentation, Data Analysis: Miles Huberman. Bank BTPN Syariah unit MMS (Mobile Marketing Syariah) X Koto presents a future package financing program based on sharia principles which focuses its activities on providing business capital financing and aims to prosper underprivileged women in rural areas, especially (mothers) in X Koto Tanah Datar. The results showed that the implementation of the future package financing program for Bank BTPN Syariah MMS X Koto was not in accordance with sharia principles, the installment payment system was not affordable and the margin / profit received by the Bank was very high at 30% to 43%. This has resulted in poor perceptions from customer mothers of future package financing programs.

Farmers’ perceptions and issue of Kredit Usaha Rakyat in Indonesia

The scheme of People’s Business Credit (KUR) is working capital financing credit or investment program in individual, corporate or business group who are productive and worthy. For the agricultural sector, since 2019 the financing program is only KUR that aims to increase agricultural production through the use of recommended technology and the use of other production facilities properly. The objective of the study is to analyze farmers’ perceptions of the scheme KUR’s business process. The research was conducted in four districts, namely Brebes, Central Lampung, Wajo, and Malang Districts with a survey method of 232 respondents. The results of the quantitative descriptive analysis reveal that the KUR’s distributors use the precautionary principle on the aspects of the guarantee requirements, the amount of credit, the repayment period, and the frequency of the loan. Meanwhile, from the perspective of prospective debtors, the requirements and processes for applying credit vary between KUR’s distributors. KUR debtors have a better perception of the scheme of KUR’s business process, compared to non-debtors. About 74% of KUR’s debtors stated that the KUR requirements were simple, easy procedures, timely processing, no additional collateral required, low interest, sufficient socialization, no additional fees, and a ceiling fund as needed, while non-debtors were only 38.4%. There is a need for more comprehensive socialization, promotion, and advocacy, to minimize the gaps in the implementation of the scheme of the KUR business process.

Village Owned Enterprises (Bumdes) and Venture Capital Financing Strategy

Currently, the government is developing the local economy through the development of community businesses such as MSMEs, traders, and others. Local economic development depends on the community's capacity to explore and manage regional potential, especially the potential of villages. The purpose of this research is to find out how bumdes as a village business institution can take advantage of opportunities as well as to help SMEs with financing difficulties. This study provides some theoretical insights into the use of a strategic management approach in the development of "bumdes". The sample of this research is the people of Maguwoharjo Village and the village government. Data were collected using in-depth interviews and focus group discussions. The analysis technique using Triangulation. The result of this research is that "Bumdes" as a village-based enterprise determines alternative strategies to develop Bumdes, namely intensive strategies. The form of implementing Intensive strategies is product development, while the form is in the form of financial services such as the Bumdes Savings and Loans Business Unit. The Bumdes Savings and Credit Business Unit is a micro-finance institution (LKM).