Women's solidarity initiatives: the experience of a community development bank

Purpose: The purpose of this research is to understand the relationship between the granting of microcredit in a community development bank and the performance of female solidarity enterprises.Methodology: This research is descriptive with a qualitative approach and a theoretical-empirical nature. The data were submitted to the content analysis technique for organisation and interpretation of the findings.Findings: From the results, it can be concluded that the granting of microcredit by the community bank can positively influence the performance of female solidarity enterprises, but it has some limiting factors, such as a low credit limit.Originality: This study analyses the relationship between the microcredit concession processes and the development of female solidarity enterprises.Keywords: Microfinance; Community development bank; Women's solidarity enterprises.

Don’t (Community) Bank on it: How the Current Regulatory Framework and New Federal Regulations Threaten the U.S. Community Banking Industry

N/A

Re-visiting traditional trust measurement: using artefactual field experiments to measure trust and predict micro-lending decisions

PurposeThe purpose of this work is to experimentally measure trust and study its relationship to group loan allocation within a community bank.Design/methodology/approachAn artefactual field experiment is run to capture a measure of trust that mimics aspects of trusting behavior in a community bank. The experimental design and empirical setting take into account risk and altruism, two known confounders of trust measures. Regression analysis is used to estimate the relationship between a novel measure of trust and the loan amount a borrower receives from their rural community bank.FindingsThe trust measure has a statistically significant, positive relationship with loan size. A one standard deviation increase in the trust measure corresponds to a 13.3 percent increase in the loan amount.Social implicationsResults of the study suggest that, for community banks, trust in a borrower plays a large role in screening applicants and therefore determining loan size. Several such banks have considered graduating to commercial credit. However, given the outsize role of trust in lending decisions, it is not clear if commercial lending models – which rely less on social capital – will work.Originality/valueA new trust game is developed that captures relationship-specific measures of directed trust that community bank members have towards each borrower. The trust measure is also context-specific as play in the game is analogous to how community bank members trust some borrowers (more than others) with larger loans. The emphasis on relationship- and context-specific trust measures is key to interpreting results from artefactual field experiments.

Municipal-owned community bank: capital raising dilemma

Learning outcomes The case introduces student to basic understanding of banking sector in Tanzania as well as the strategies and struggle to raise capital through shareholders’ funds. Application of Banking theory and Pecking order theory is evidenced from the case. The case outlines why the bank struggled to raise capital and what triggers the capital raising strategies. It also give students an opportunity to think about applicable theories of capital structure and bank capital, and strategies the bank could use to rescue its capital crunch in the future. Case overview/synopsis The case provides details of how the Capital Community Bank (CCB) raised its capital through strategic financial engineering which enabled it to raise the minimum regulatory capital required to be licensed as a financial institution unit, to a regional financial institution, to a fully fledged commercial bank. The bank started with a paid up capital of TZS 472.3m in 2002, involving four Local Government Authorities and individual investors. Capital raised to TZS 31.3bn in 2014 and down to TZS 20.6bn at the end of 2016. The minimum regulatory capital required is TZS 15bn, while paid up capital was 16.9bn. With the change of the management team in 2017, the bank is looking for avenues to raise further capital to meet the regulatory limits and continue to survive as a commercial bank, given dramatic changes in the banking sector in Tanzania. Complexity academic level The case is suitable for third year students in Bachelor of Commerce/Economics specializing in banking/financial services. It also suits postgraduate/master's students seeking a Postgraduate Diploma or Master of Business Administration in financial institutions/banking course. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 1: Accounting and Finance.