Syndicated Lending: Law Enforcement and Legislative Refinements

Subject. This article focuses on the development of the syndicated lending institution as the respective legal framework emerges. Objectives. The article aims to consider problems of the development of syndicated lending in Russia and describe the main areas for further changes in the legal regulation. Methods. For the study, I used logical and structural analyses, and functional analysis system and legalistic approaches. Results. The article describes the essence, features and legal regulation of syndicated lending, and evaluates enforcement practices based on the new syndicated loan law. It also formulates key issues and identifies further areas for changing the legal regulation of syndicated lending. Conclusions. The development of syndicated lending can significantly support large and medium-sized businesses in terms of job preservation, tax revenue growth, and business competitiveness. The findings can contribute to the theory of syndicated lending in the Russian Federation, and practical activities to suggest possible legislative and regulatory improvements in this area.

Mathematical Foundations for Balancing the Payment System in the Trade Credit Market

The increasingly complex economic and financial environment in which we live makes the management of liquidity in payment systems and the economy in general a persistent challenge. New technologies make it possible to address this challenge through alternative solutions that complement and strengthen existing payment systems. For example, interbank balancing and clearing methods (such as real-time gross settlement) can also be applied to private payments, complementary currencies, and trade credit clearing to provide better liquidity and risk management. The paper defines the concept of a balanced payment system mathematically and demonstrates the effects of balancing on a few small examples. It then derives the construction of a balanced payment subsystem that can be settled in full and therefore that can be removed in toto to achieve debt reduction and payment gridlock resolution. Using well-known results from graph theory, the main output of the paper is the proof—for the general formulation of a payment system with an arbitrary number of liquidity sources—that the amount of liquidity saved is maximum, along with a detailed discussion of the practical steps that a lending institution can take to provide different levels of service subject to the constraints of available liquidity and its own cap on total overdraft exposure. From an applied mathematics point of view, the original contribution of the paper is two-fold: (1) the introduction of a liquidity node with a store of value function in obligation-clearing; and (2) the demonstration that the case with one or more liquidity sources can be solved with the same mathematical machinery that is used for obligation-clearing without liquidity. The clearing and balancing methods presented are based on the experience of a specific application (Tetris Core Technologies), whose wider adoption in the trade credit market could contribute to the financial stability of the whole economy and a better management of liquidity and risk overall.

Impact of cash in hand in the total priority sector lending: an empirical assessment

As a major lending institution, nationalized banks in India have the major responsibilities for achieving the government's socio-economic objectives like growth in agriculture, education, small scale sector, and housing in the backward area. This is because, in emergent countries like India, the availability of funds for the above priority sectors is scarce. Hence, in this paper, we aim to see any impact of cash in hand on lending to the priority sector. The article analyzes secondary data of 12 years periods starting from 1st April 2006 to 31st March 2018 (total span of 12 years). The outcome indicates nationalized bank's ability to generate priority sector loans is checked by the availability of cash in hand.

Syndicated lending: Law enforcement and legislation improvement

Subject. This article deals with the issues related to the development of the syndicated lending institution in the aspect of the emerging legal framework in this area. Objectives. The article aims to consider the problems of the development of syndicated lending in Russia and describe the main areas for further changes in the legal regulation. Methods. For the study, I used logical and structural analyses, and functional analysis system and legalistic approaches. Results. The article describes the essence, features and legal regulation of syndicated lending, and evaluates enforcement practices based on the new syndicated credit law. It also formulates key issues and identifies further areas for changing the legal regulation of syndicated lending. Conclusions. The development of syndicated lending can significantly support large and medium-sized businesses in terms of job preservation, tax revenue growth, and improving business competitiveness. The results of the study can be used both in theory of syndicated lending in the Russian Federation, and in practical activities to develop proposals to improve regulation in this area.

Effects of Credit Appraisal Methods on Non-Performing Loans in Government Owned Financial Institutions, A Case of Kenya Commercial Bank Limited

Financial institutions have in the recent past become a major player in the Kenyan economy. Consequently, for the institutions to sustain viable credit programmes, the criteria for assessing credit risk are essential so as to minimize the loan default. There are various known methods and tools which can be employed by credit offices to ensure that they lend quality loan. These methods try to establish the creditworthiness of the potential borrower. Quality loans means good returns to the business since there is less provisions for bad debt in the books of the lending institution. One of the criteria for establishing the creditworthiness of a borrower is the C’s of credit model. These are initials for;-character, capacity , capital, collateral , common sense, contribution and conditions The C’s of credit refers to the borrower’s specific attributes which, if well used can help the lender arrive at a better decision of whether to lend or not to lend, the amount to lend and possibly the period to allow. Lending institutions, however, have continued to record non-performing loans, despite there being elaborate known methods to aid in credit appraisal. The objectives of this study were to establish the factors that have contributed to non performing loans in financial institutions, whether the appraising persons are well versed on C’s of credit and challenges affecting appraising persons during the appraising process. To arrive at reliable findings, the researcher engaged respondents from selected financial institutions who were supplied with questionnaires in order to collect the sought data. The researcher employed descriptive research design which entails distributing questionnaires to respondents. The respondents were sampled from twenty financial institutions where respondents were chosen randomly. The target population in this case was credit officers irrespective of their cadres. For ease of collection of data, the study was located in Nairobi County where most financial institutions are based. The data so collected was coded to facilitate analysis. The researcher employed both descriptive and inferential statistics to analyze the data. The researcher further employed the credit scoring model which uses data on observed borrower characteristics, either to calculate the probability of default or to sort out borrowers into different default risk classes.

The Essence and Mechanism of Financial Recovery of Lending Institutions

The current situation in the banking sector of the Russian Federation reveals a high degree of instability of lending institutions. In this regard, the Bank of Russia acts as a mega-regulator: its policy is to stabilize the banking market by using various financial and administrative instruments. Most commercial banks are not able to cope with the new requirements and regulations imposed by the state. As a result, they leave the market and recognize their insolvency. The present article introduces some statistics that characterizes the state of the banking sector over the past six years and confirms the situation described above. The existing banking legislation proved unable to determine the concept of insolvency of a commercial bank. The authors proposed a more specific definition of this concept, which fully reflects the essence of this economic phenomenon. In order to avoid bankruptcy, a credit institution may resort to a financial recovery procedure. A prompt and complete procedure gives an opportunity to avoid negative consequences and resume banking activities. The authors introduced a new interpretation of the financial recovery procedure in order to highlight the essence and specific features of the mechanism in the current economic conditions. The article presents a classification and a detailed roadmap of financial recovery measures. The roadmap provides a gradual financial recovery of the lending institution, which can be interpreted as the development of an economy.

Current Issues of Inbound Tourism in the Republic of Kazakhstan and Ways of Promotion

This article analyzes the current state of inbound tourism in the Republic of Kazakhstan, the authors carried out a sociological analysis that identified the main problems hampering the development of inbound tourism in Kazakhstan and proposed the solution of infrastructure problems through the establishment of a lending institution.

Determinants of Credit Infections: Evidence from Banking Sector in an Emerging Economy

This paper applies dynamic panel estimates on 22 commercial banks in Pakistan to determine the factors that affect their asset quality. Consequently, the study tests for a comprehensive array of both bank-specific and macroeconomic variables collected quarterly from 2008 to 2016. The empirical analysis confirms that bad asset quality can be explained by retarded GDP growth and unfavorable movement in exchange and lending rates. Within the bank-specific variables, non-performing loans are the most responsive to loans to the agriculture and energy sectors, level of capitalization, size of the lending institution and quality of management.