Do Credit Supply and Unemployment Risk Matter for Household Saving? Evidence from Poland

This paper contributes to the literature on the effects of uncertainty on household saving – a long-standing and extensively explored topic yet leaving a number of issues inconclusive. It concentrates on the labor income uncertainty by addressing saving against unemployment risk in terms of changes in credit supply and households’ financial wealth. Time series analysis uses dataset of quarterly observations from 2003 Q4 to 2019 Q3 for Poland. It provides empirical evidence of the negative relationship of changes in households’ financial wealth and credit availability with the household propensity to save, in line with the buffer saving model. Furthermore, it contributes to the discussion on the choice of uncertainty measures referring to the labor market with a recommendation to employ the subjective (perceived) unemployment expectation index rather than the objective unemployment rate. These results are meaningful for policy implications. They emphasize the role of credit availability for household consumption/saving decisions. In case of expansionary monetary policy and making credit easier to acquire for households, all other things equal, a negative effect on the household saving rate may be expected. This poses a question about the risk of households’ overreliance on credit and therefore about their financial stability in emergency situations.

Effect of financial deepening on economic growth: Does it encourage income group transition?

The rapid growth of financial deepening raises the problem of its effect, beneficial for economic development. This paper aims to demonstrate the relationship between economic growth (GDP per capita growth, GNI per capita) and financial depth (domestic credit to private sector and credit availability) in 142 countries, split into four income groups, over 2000–2020, using correlation analysis and data from the World Bank and the IMF. Besides, a comparative analysis of domestic credit to the private sector, economic freedom, Gini index, total government expenditure and national savings of countries that increased their income group status over 2011–2020 is presented. Financial deepening (increased credit availability and expansion of domestic credit to the private sector) encourages economic growth (via GNI per capita and GDP per capita growth). Although the presence of a nonlinear relationship between economic growth (GDP per capita growth) and financial depth (domestic credit to private sector and credit availability) over 1991–2020 is insufficient, there is a linear relationship between GNI per capita and credit availability, between credit availability and domestic credit to the private sector for the same sample of countries over 2000–2020. Meanwhile, there is a tendency towards a decrease in the correlation between GNI per capita and GDP per capita growth. Given the revealed linear correlation between domestic credit to the private sector and GNI per capita, financial deepening positively impacts income growth, and this dependence strengthens with increasing income levels. Target values of domestic credit to the private sector are proposed for the income group transition. AcknowledgmentThe paper was funded as a part of the “Relationship between financial depth and economic growth in Ukraine” research project (No. 0121U110766), conducted at the State Institution “Institute for Economics and Forecasting of the NAS of Ukraine”.

Structure, Conduct and Performance Analysis of Sheabutter Marketing in Oyo State, Nigeria

The study investigated the marketing practices, channels of sheabutter distribution and performance using multi stage sampling techniques to select three local government area for the study in Oyo State. The results showed about 91% of the respondents were female, the average age of the respondents was 35.5 years. Most (92.5%) of the respondents were married with average household size of 8 members. Marketing efficiency was 135% which implies that the respondents covered the cost of marketing and made a margin above 100%. Unavailability of sheabutter due to deforestation and credit unavailability were the major constraints faced by sheabutter marketers. Furthermore, Household size (p=0.005), marketing experience and member of organization (p=0.001), source of shea butter (p=0.01) and credit availability (p=0.005) were factors influencing marketing efficiency of the respondents. The study concluded that sheabutter marketing was a profitable enterprise in the study area. The study recommended that there should be proper awareness on the prospect of sheabutter business (either for local use or exportation) among young people; this will be an avenue to alleviate the scourge of unemployment in the country.

INSTITUTIONAL CREDIT DELIVERY TO SMALL AND MARGINAL FARMERS:A CASE STUDY IN CACHAR DISTRICT OF ASSAM

In recent years, the contribution of agriculture accounts for hardly 13.7% of gross domestic product (GDP) of India as compared to approximately 47% at the time of independence. This reduction, however, was not accompanied by a parallel decrease in the part played by agriculture in employment generation. Access to nance is crucial for the growth of the agricultural. Credit is an essential input for agriculture; therefore, its affordability and availability, particularly to the marginal and small farmers. This paper attempts to analyse the institutional credit delivery to small and marginal farmers in Cachar district of Assam and various factors inuencing credit availability and highlight the issues of credit delivery system in Cachar district of Assam. For this purpose standard statistical tools have been applied along with strong theoretical justications in this paper for analysing the proposed objective. The analysis reveals that the credit delivery to agricultural sector continues to be inadequate in the study area.

Constraints Faced and Suggestions Received by Self Help Group Members of Akola District, Maharashtra

Self Help Groups (SHGs) emerged as a key programming strategy in India for most of the women development activities starting with the NABARD led pilot project in 1992 that aimed at promoting and financing 500 SHGs across the country; the SHG – Bank Linkage programme has come a long way. However, given the SHG approach's positive outcomes, there are many problems and constraints that conflict with the SHGs. The present study was carried out in Akola district of Maharashtra state of India during the year 2018-19 with a sample size of 120 to define the constraints faced and suggestions offered by the members of SHGs. The Major constraints faced were lack of credit availability at low rates of interest, its adequacy and timely access followed by difficulty in managing time to spare for SHG activities from everyday household activities and non Cooperation of family members. Among the suggestions offered majority of the members offered women beneficiaries should be provided with adequate financing and subsidies, more income generating skills training should be organized for the members.

Examining the Relationship between Land Values and Credit Availability

Increased credit availability facilitates land acquisition, but higher land values also hinder it. We investigate the impact of credit availability on land values, after regulatory changes in the lending system. We build an index of increased credit availability using Federal Reserve and Federal Deposit Insurance Corporation data. County-level panel fixed effects estimations are performed controlling for land value determinants, credit availability, and county-level macroeconomic factors. We find that estimating the effects of credit availability separately masks its total effect. Results show a 0.1 change in the index for increased credit availability is associated with 1.64–1.96% increase in land values.

A Better Madden Fix: Holistic Reform, Not Band-Aids, to Modernize Banking Law

Historically, state usury laws prohibited lending above certain interest rates, but in 1978 the Supreme Court interpreted the National Bank Act (NBA) to allow chartered banks to issue loans at rates based on where they were headquartered rather than where the loan originated. States like South Dakota virtually eliminated interest rate ceilings to attract business, incentivizing national banks to base credit operations there and avoid local usury laws. In 2015, however, the Second Circuit decided Madden v. Midland Funding, LLC and reversed long-standing banking practices, ruling that non-chartered financial institutions were not covered by the NBA and were therefore subject to state usury laws where the loan originated. The underlying reasoning for the court’s decision was well-intentioned and based on (a) an unwillingness to allow non-chartered institutions to function as pseudo-banks and (b) a desire to protect consumers. The court’s radical decision received widespread criticism, and empirical studies have demonstrated a noteworthy decrease in credit availability in the Second Circuit—negating the court’s own policy rationales. Since Madden, Congress and federal agencies have attempted an outright reversal, but none of their solutions address the Madden court’s fundamental concerns. This Essay argues that a Madden fix is needed, but the most effective solution must incorporate and address the Second Circuit’s underlying concerns.