Loan Officer and the Evolution of Bank-SMEs Relationship in Tunisia

This paper empirically investigates the role of the loan officer in the evolution of the bank-SMEs relationship and its motivation for studying credit demand, its level of alignment to the hierarchy and its participation in the decision-making process. Based on a survey of 160 loan officers from two large Tunisian commercial banks: the ‘Société Tunisienne de Banque’ (STB) – as a public bank, and the ‘Banque Internationale Arabe de Tunisie’ (BIAT) – as a private bank, data analysis shows that self-esteem, need for success, autonomy in performing duties, and participation in the decision-making process are motivating factors at work for loan officers at both banks. The number of visits to the premises of the SME and the average length of interviews with its manager are considered important for the acquisition of soft information. Regarding the decision-making power, while a certain delegation has been instituted at the regional level in the BIAT, it is more the responsibility of the central committees in the STB. The decision of evolution depends more on the hierarchical superiors in a private bank that is why the BIAT officers are closer to their superiors than those of the STB.

Influence of Islamic Auto Financing Instruments on Financial Performance of Commercial Banks in Isiolo County Kenya

Purpose: The purpose of the study was to explore the influence of Islamic auto financing instruments on financial performance of commercial banks in Isiolo County Kenya. Methodology: This study used descriptive research design. The respondents were customer service officers and loan officers in the ten commercial banks in Isiolo County. They were be selected using census method. Data collection was done using closed-ended questionnaires and secondary data collected through analysis of report from 2017 to 2020. To ensure validity and reliability, pre-testing of questionnaires was done at Kenya Commercial Bank in Meru town. Coded data in SPSS 24.0 computer program analyzed quantitative and qualitative data using the descriptive statistics such as mean, percentage and standard deviation. Multiple regression was used to test hypothesis of the study. Tables, graphs and detailed explanations were used to present the final results of the study. Results: Options had a statistically significant relationship with financial performance. The respondents agreed that the lending terms of Islamic automobile financing have attracted diverse clients (mean of 4.78). However, in comparison with other statements, the respondents did not tally that having sharia committee in disbursing car loans had enabled clients have confidence with the automobile loans (mean of 3.83). The R value was 0.862 and R-square of 0.743. This indicated that Islamic auto financing instruments’ level of contribution towards financial performance was 74.3%. The Durbin- Watson value was 1.969. This value lied between 0 and 2 hence indicating that there was a positive correlation between auto financing instruments and financial performance. The significance value was 0.000 which was below 0.05 hence Islamic Auto financing instruments had a significant influence of financial performance. In addition, the respondents did not tally that having sharia committee in disbursing car loans had enabled clients have confidence with the automobile loans. This proved that the confidence that clients had on auto financing, was not purely on the nature and process of administration of the financing but also due to reliability. Unique contribution to theory, policy and practice: The study recommends that auto financing should be provided reliably by ensuring all client concerned are amicably handled by the banking staff. The various car loan officer should be trained on good customer service to as to ensure they sell well their products without necessarily losing new clients. The bank management should also diversify auto financing to cater for all categories of vehicles for expansion of their client base.

Costs of Job Rotation: Evidence from Mandatory Loan Officer Rotation

Job rotation inside an organization creates two conflicting effects. It disciplines agents by creating the fear that their successors may discover and report their hidden information. Thus, the agent takes actions that align with the principal’s objective. However, job rotation can create a moral hazard problem. If information is soft and therefore, nonverifiable, the principal cannot attribute blame to the agent or the successor. Agents shirk, thereby hurting performance. Thus, the importance of disciplining versus moral hazard effects depends on the availability of hard information. Using unique loan-level data, we show that job rotation hinders performance when the information is soft. This paper was accepted by Giesecke Kay, finance.

IMPACT OF MEDIATION RELATIONSHIP WORK MOTIVATION, INCENTIVES AND JOB SATISFACTION ON THE PERFORMANCE OF SAVINGS AND LOANS PROGRAM OFFICER DISTRICT PNPM PADANG PARIAMAN

This study aims to determine the impact or Influence Motivation Work Incentives In Mediating Relationships, Job Satisfaction and Performance Savings and Loan Officer Program PNPM Padang Pariaman district "by respondents as many as 138 (One Hundred Thirty-eight) people. Data were collected through a questionnaire distributed to the entire population that can be used for analysis. Hypothesis testing is done by using the techniques of data analysis through multiple regression analysis simple linear regression and linear regression stratified. The results of multiple linear regression analysis showed that of two independent variables, Incentives and Job Satisfaction significant effect on performance variables (the dependent variable)Incentives and Job Satisfaction variables significantly influence working motivation variable as a mediating variable. Likewise mediating variables Work Motivation is also a significant effect on performance. Thus, in this case working motivation mediates the relationship between incentives and performance and work motivation mediates the relationship between job satisfaction and performance. The magnitude of the effect of the two independent variables incentives and job satisfaction simultaneously affect the performance Savings and Loan Officer Program PNPM is 27.5%. So also the mediating variable work motivation. As for the influence of the independent variables to Work Motivation was 43.3%. Furthermore, the influence of mediating variables significantly influence the work motivation Officer Performance is 25.8% (R square = 0.625) .Besarnya influence of incentives and job satisfaction on Performance Officer (Y) through the variable Work Motivation is 32.3% (R2 = 0.654 ). In other words, an increase in the influence of variable incentives and job satisfaction on performance Savings and Loan Officer Program PNPM Padang Pariaman by 4.8%, or from 27.5% to 32.3%.

Loan officer rotation and credit access: evidence from Madagascar

Purpose With exclusive data from a commercial microfinance institution (MFI) in Madagascar, the purpose of this paper is to investigate if loan officer rotation (change of loan officer) has an effect on credit access (loan approval) in rural and in urban areas. The authors further analyze how the frequency of loan officer rotation affects credit access in rural and in urban areas. Design/methodology/approach The authors apply propensity score matching to compare credit access between loan applicants who experienced loan officer rotation and loan applicants who experienced no loan officer rotation in rural and in urban areas. Findings Results show that loan officer rotation has a positive and statistically significant effect on credit access. The authors observe further that loan officer rotation has a different effect on credit access in rural and in urban areas. Whilst rural loan applicants who experienced loan officer rotation are more likely to have credit access, urban loan applicants show no statistically significant effect of loan officer rotation on credit access. For the frequency effect on credit access, the authors observe that one loan officer rotation has a positive and statistically significant effect on credit access whereas results are mixed for two loan officer rotations. Research limitations/implications Even though the authors can show that loan officer rotation can improve credit access to loan applicants, especially in rural areas, the conditions in Madagascar are unique. Therefore, results need to be verified in other countries and institutional contexts. Practical implications From the perspective of MFI, the authors recommend that the management of MFI needs to provide better tools to loan officers to improve on the evaluation of agricultural loan products or standardize the assessment of agricultural loan products to improve on lending decisions. Further, if applicable, the authors recommend that MFI should consider using credit worthiness assessment procedures which rely less on loan officer’s judgment for loan evaluation, such as automated systems. From the perspective of loan applicants, the authors recommend that loan applicants should request for a change of loan officer if they experience successive loan applications rejection. Originality/value To the authors’ knowledge, this paper is the first to provide empirical evidence on the effect and frequency of loan officer rotation on credit access in Sub-Sahara Africa, and Madagascar, in particular.