Impact of interest rate on loan repayment
55149338
Empirical Evidence Impact of Interest Rate on Loan Repayment of Microfinancial Institution in Tanzania
Microfinance nowadays is about drawing the benefits of modern entrepreneurship downward to those with low incomes relatively than endorse alternatives to free enterprise; ".it is a component of the post Washington Consensus [30]" also not a substitute to the prevailing attitude. We adopted descriptive assessment techniques, the data were collected through interviewing or administering a questionnaire to a sample of 400 respondents, and analyzed by using SPSS software. There was strong negative correlation between multiple loans and positive corelation between business capacity and extent of higher interest rates charged. The study recommended that the business owner should focus on the level of the business capacity with loan proposed to be taken and make the comparisons of the daily business revenues operation and not the capital of the business initiatives.
Ali Othman Abbas Zhang Honghui
191682982
The impact of interest rate on loan repayment in financial institutions
H R Mukrim
169001902
The impact of interest rate on loan repayment and demand for credit a case study for the Swaziland Development Finance Corporation (FINCORP)
Zenzele Henry Dlamini
55918095
Interest Rate, Corporate Membership and Loan Repayment by Borrowers from Micro Financial Institutions in Nakuru County
The purpose of this study was to determine the relationship between interest rate, corporate membership and loan repayment in MFIs in Nakuru County. The study was guided by two objectives; to investigate the role of interest rate in loan repayment in MFIs in Nakuru County and to analyze the role of corporate membership in loan repayment in MFIs in Nakuru County. The study adopted correlation design and was guided by multiple regression models. The study collected data through structured questionnaires that had adequate research items on every research indicator. Collected data was analyzed using STATA and results were presented using tables. The findings of the study revealed that interest rate is not a determinant of loan repayment in Micro Financial Institutions in Nakuru County and it was concluded that interest rate charged on a loan does not impact on repayment. Similarly, it was evident that corporate membership is not significant determinant of loan Repayment in micro financial institutions in Nakuru County. The study recommends that institutions should establish a close relationship between the lenders and the borrower through monitoring, business advice and regular meetings. The institution can also develop a reward system to those borrowers who repay their loans on time through discounts on subsequent loans and savings. Further studies should be conducted to examine if the following determinants are associated with loan repayment in MFIs period of membership, security given, utmost good faith, consistency of payment during previous loan and social problems.
Wafula Nathan Wamalwa
117902249
The Analysis of Interest Rate Pricing and Its Impact on P2P Platform in the Scalper Arbitrage Environment
At present, China's P2P platform has emerged a group of people known as net loan scalper. They borrowed money at low interest rates and invested the high interest rates loans in order to earn profit margins. This paper intends to discuss the factors influencing the loan interest rate into the scalper arbitrage environment from the microcosmic point of view, and focuses on the construction of multiple regression model of 35,970 real transaction data from Hongling Capital, and confirmed that the amount of loan, the term of loan, the mode of repayment, the type of the subject and the lowest bid limit have a significant impact on the setting of the loan interest rate, as well as in the scalper arbitrage environment and no scalper arbitrage environment, the impact of these variables are different. Therefore, platform and users should treat the scalper arbitrage dialectically and learn to identify the risks behind it so as to avoid them.
Jianqing Huang Xiao Liu
154353612
Impact of the Interest Drawback Programme (IDP) On Loan Repayment under the Agricultural Credit Guarantee Scheme (ACGS)
The interest drawback programme (IDP) as an innovation under the Agricultural Credit Guarantee Scheme (ACGS) was instituted to encourage loan repayment by providing a post payment rebate to loan beneficiaries that honour their loan repayment schedules coupled with the fact that it also presents a reduced effective lending rate for loans under the Scheme. Time series analysis of the operations of the IDP from 2003 till date depicted the IDP as a poor predictor of loans repayment. The long run estimation showed that both loans guaranteed and IDP payments have been inelastic determinants of loans repaid. For every N 1 million increase in loans guaranteed, loans repaid will increase by N 990,000.00, while for every N 1 million increase in IDP payment, loans repaid will reduce by N 50,000.00. This inverse relationship between loans repaid and IDP payment is contrary to a priori expectation as IDP payment was established to boost loan repayment under the ACGS. The estimation also highlighted a negative long run effect of IDP payments on loans repaid under the scheme. Though the introduction of the IDP has brought about a significant change in the series of loan repayment under the ACGS, however its long run impact on loans repayment should be addressed.
Musa A Olasupo Carolyn Afolake Afolami Adebayo Musediku Shittu
186972790
Die Auswirkungen Der Zinspolitik Im Bankensystem Und Bei Immobilienentwicklungen The Impact Of Interest Rate Policy, On The Banking System And On Real Estate Development
Abstract The research purpose is to find out if signs of a real estate bubble are shown at the austrian real estate market right now. Lending rates are composed of different factors: the base rate is the price that the customer is willing to pay. The risk premium is given to compensate the lenders risk of full or partial failure of repayment. The inflation adjustment takes into account the impairment of money over the term of a loan. The liquidity premium increases with extension of the term of the loan. The European Central Bank influences the interest rate policy by varying the interest for money saved there by the banks. At the moment there are used negative interest rates, i.e. penalty interest. The methodology used was that recently the ECB lowered the interest rates which might cause real estate bubbles and, subsequently, banks and economic crises may follow, if interest rates were to be increased again sooner or later. Therefor the author studied the amount of sales and the connection to the interest rates and the interest rate policy of the banks right now. Summarizing it can be seen that in Kittsee, an Austrian area with a lot of real estate sales, as an example, 565 real estate properties were sold in the years 2005 to 2015, the median prices increased in relation to the buyers residence in Austria or non Austrians at about 375% to 490% this might indicate signs of change on the market.
Pamela Priess
54062428
The Impact of Risk Based Pricing and Refinancing on the Student Loan Market
Advances in data driven underwriting have both efficiency and equity implications. In the $1.3 trillion student loan market, private lenders offer a growing distribution of risk based interest rates, while the federal loan program sets a uniform price. I measure changes in consumer surplus that occur as low risk types refinance out of the government pool into the private market. I use a dataset from an online refinancer to estimate a structural model that relates borrowers' repayment choices to interest rates. I estimate refinancing increases low risk surplus by $1,302, and show substantial distortionary costs (32% of the average transfer) under a pooled, uniform interest rate. To maintain access to the current uniform rate, the government must subsidize high risk borrowers $1,507 on average. *Affiliation: Stanford Institute for Economic Policy Research (SIEPR) Department of Economics, Princeton University. Email: nmcox@stanford.edu. I thank my committee members, Ben Handel, David Sraer, Ulrike Malmendier and Emmanuel Saez, who provided invaluable advice throughout the research process. This work has benefited particularly from the comments of Alan Auerbach, Pierre Bachas, Zarek Brot Goldberg, Claire Celerier, Kei Kawai, Patrick Kline, Jon Kolstad, Jennifer Kwok, Julien Lafortune, Waldo Ojeda, Jon Schellenberg, Avner Schlain, Katalin Springel, Boris Vallee, Danny Yagan, Gabriel Zucman and seminar participants. I also thank the patient and helpful employees at the firm whose data I analyze.
Natalie Bachas
210959507
The Impact of Loan Modifications on Repayment, Bankruptcy, and Labor Supply: Evidence from a Randomized Experiment*
This paper uses a randomized experiment and administrative tax and bankruptcy records to estimate the impact of loan modifications on subsequent outcomes. A large non profit credit counseling organization and eleven unsecured creditors offered lower interest rates and longer repayment periods to a random subset of 80,000 distressed borrowers. Borrowers offered a lower interest rate were more likely to repay their debts and less likely to file for bankruptcy protection. Lower interest rates also increased the probability of being employed for the most heavily indebted borrowers. In contrast, there was little impact of a longer repayment period on debt repayment, bankruptcy, or employment. *We are extremely grateful to Ann Woods and Robert Kaplan at Money Management International, David Jones at the Association of Independent Consumer Credit Counseling Agencies, and Gerald Ray and David Foster at the Social Security Administration for their help and support. We thank Hank Farber, Paul Goldsmith Pinkham, Alex Mas, Conrad Miller, Steve Woodbury, Crystal Yang, Seth Zimmerman, and numerous seminar participants for helpful comments and suggestions. Kevin Tang and Daniel Van Deusen provided excellent research assistance. Financial support from the Washington Center for Equitable Growth is gratefully acknowledged. Correspondence can be addressed to the authors by e mail: wdobbie@princeton.edu [Dobbie] or jae.song@ssa.gov [Song] Any opinions expressed herein are those of the authors and not those of the Social Security Administration. American consumers default on more than $200 billion in non mortgage debt each year, and more than 14 percent of consumers have at least one debt in collections (Federal Reserve Bank of New York 2014) There are significant deadweight losses for both borrowers and lenders of loan default and collection, particularly when debt contracts are incomplete (e.g. Bolton and Rosenthal 2002).1 Lenders must either pay to collect the debt directly or sell the debt to a thirdparty debt collector for a fraction of the face value. In turn, borrowers have an incentive to avoid these collection efforts through potentially costly strategies, such as leaving the formal banking system to avoid asset seizures or leaving the formal labor market to avoid wage garnishment. In these kinds of scenarios, ex post loan modifications can theoretically benefit both borrowers and lenders by completing debt contracts and preventing loan default. To date, however, there is little empirical evidence on whether loan modifications provide any benefits, and if so, what types of loan modifications are most effective increasing repayment and decreasing financial distress. This paper uses a randomized experiment and administrative tax and bankruptcy records to estimate the impact of different loan modifications on repayment, bankruptcy, and labor supply. The experiment was designed and implemented by the largest non profit credit counseling organization in the United States. Eleven large unsecured creditors agreed to offer lower interest rates and lower minimum monthly payments to approximately 40,000 distressed borrowers that contacted the nonprofit organization between January 2005 and August 2006. For a typical borrower in our sample, the median interest rate reduction of 3.69 percentage points shortened the repayment period by about four months and decreased the total amount repaid by $1,712. The median monthly payment reduction of 0.14 percent of initial debt holdings, or about $26.68, lengthened the repayment period by four months and increased the total amount repaid by $289. We identify the effects of lower interest rates and longer repayment periods using two unique features of the randomized experiment. First, each of the eleven creditors participating in the experiment offered a different bundle of interest rate and monthly payment reductions, and second, borrowers in our sample owed different amounts to each of these creditors. As a result of these features, otherwise similar borrowers received very different interest rate and monthly payment reLoan default may also generate negative externalities through price effects (e.g. Campbell, Giglio, and Pathak 2011, Mian, Sufi, and Trebbi forthcoming) or the distortion of household consumption and investment decisions (e.g. Guerrieri and Lorenzoni 2011, Hall 2011, Midrigan and Philippon 2011, Eggertson and Krugman 2012, Farhi and Werning 2013, Mian, Rao, and Sufi 2013, Mian and Sufi 2014)
Will Dobbie Jae Song
54590415
Statistical Analysis on the Loan Repayment Efficiency and Its Impact on the Borrowers: a Case Study of Hawassa City, Ethiopia
The major objective of this study is to study factors affecting loan repayment efficiency of borrowers and assess impact of efficient utilization of loan for the borrowers in Hawassa city in Ethiopia. Data used for this study was collected through a structured questionnaire. Classical and Bayesian logistic regression technique were used for data analysis. Factor analysis was used to reduce data and to incorporate the major determinants that the efficient utilization of loan have to the borrowers, whereas logistic regression is used to obtained factors affecting loan repayment performance of borrowers and it was extended to the Bayesian frame work using prior information that the parameter follows. Results of the classical binary logistic regression indicate that better repayment efficiency is associated with borrowers: sex, educational status, number of dependent family member, monthly income, loan size, additional source of income, motivation of repayment, time given for repayment, interest rate and screening mechanism when individuals apply for the loan. Also by using Bayesian logistic regression age, loan type, using loan for intended purpose and experience are significant in addition to significant predictors in classical logistic regression. From factor analysis, 27 factor used for impact assessment in which all the factor loaded highly in 7 significant factors like: Benefit and obstacle related factor, capital effect, saving habit, expenditure, government spending, satisfaction level on the service and consumption change that has been seen after using loan. Thus, in order to improve repayment performance of borrowers, increasing loan size, training and giving some incentive in business areas, increasing awareness in different ways and studying factors which has significant impact on borrowers creditworthiness and giving solution to reduce that problems must be improved.
Yonas Shuke Kitawa Nigatu Degu Terye