Search results for: debt financing

Authors: Shailender Kumar

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Current health policy pronouncements in India advocate for insurance-based financing mechanism to achieve universal health coverage (UHC), while undermine the role of comprehensive healthcare provision system. UHC is achieved when all people receive the health services they need without suffering financial hardship. This study, using 68th & 71st NSS rounds data, examines their relative and combined strength in achieving the above objective. Health-insurance has been unsuccessful in reducing prevalence and catastrophic effects of out-of-pocket payment and even dismantle the effectiveness of traditional way of health financing system. Healthcare provision is the best way forward to enhance health and well-being of households in condition if India removes existing inadequacies and inequalities in service provision across districts/states and ensure free/low cost medicines/diagnostics to the citizens.

Keywords: health policy, demand-side financing, supply-side financing, incidence of health payment

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Authors: Kaycee Bills

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This study will determine if students with disabilities have higher student loan debt payments than other student populations. The hypothesis was that students with disabilities would have significantly higher student loan debt payments than other students due to the length of time they spend in school. Using the Bachelorette and Beyond Study Wave 2015/017 dataset, quantitative methods were employed. These data analysis methods included linear regression and a correlation matrix. Due to the exploratory nature of the study, the significance levels for the overall model and each variable were set at .05. The correlation matrix demonstrated that students with certain types of disabilities are more likely to fall under higher student loan payment brackets than students without disabilities. These results also varied among the different types of disabilities. The result of the overall linear regression model was statistically significant (p = .04). Despite the overall model being statistically significant, the majority of the significance values for the different types of disabilities were null. However, several other variables had statistically significant results, such as veterans, people of minority races, and people who attended private schools. Implications for how this impacts the economy, capitalism, and financial wellbeing of various students are discussed.

Keywords: disability, student loan debt, higher education, social work

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Authors: Mengyu Lu, Yongsheng Guo

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This study investigates how employee incentives affect employee performance in financing from customers. This study followed a grounded theory approach where data were collected through 29 interviews. Main themes and categories were identified through the coding processes. This study found that casual conditions, including financial barriers, informal finance, business location, customer base and customer relationship, influenced the adoption of customer finance in the case of SMEs. The SMEs build and maintain long-term relationships with customers through personal communications. The SMEs engage and motivate employees in customer communications and business financing strategy through financial incentives programs, including bonuses, salary rises, rewards and non-financial incentives, including training opportunities, extra holiday leave, and flexible working hours. Employee performance was measured through financing contribution and job contribution. As a consequence, customers will be well served by employees and get a better customer experience. SMEs can get benefits such as employee engagement, employee satisfaction and sustainable financing sources. This study gets in sight of employee incentives in improving employee performance in customer finance and makes implications to human capital theories. Suggestions are provided to the decision-makers in businesses as incentive programs improve employee performance that, eventually contributes to overall business performance.

Keywords: SMEs, financing from customers, employee incentives, performance-based measurement

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Authors: Merle Van Den Akker, Neil Stewart, Andrea Isoni

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Contactless methods of payment referred to as tap&go, have become increasingly popular globally. However, little is known about the consequences of this payment method on spending, spending habits, personal finance management, and debt accumulation. The literature on other payment methods such as credit cards suggests that, through increased ease and reduced friction, the pain of paying in these methods is reduced, leading to higher and more frequent spending, resulting in higher debt accumulation. Within this research, we use a dataset of 300 million transactions of 165.000 individuals to see whether the onset of using contactless methods of payment increases the occurrence of overdraft fees. Using the R package MatchIt, we find, when matching people on initial overdraft occurrence and salary, that people who do start using contactless incur a significantly higher number of overdraft fees, as compared to those who do not start using contactless in the same year. Having accounted for income, opting-in, and time-of-year effects, these results show that contactless methods of payment fall within the scope of earlier theories on credit cards, such as the pain of paying, meaning that this payment method leads to increasing difficulties managing personal finance.

Keywords: contactless, debt accumulation, overdraft fees, payment methods, spending

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Authors: Covadonga Mallada Fernández

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Economic development and globalization of international markets have created a favourable atmosphere for the emergence of new forms of crime such as money laundering or financing of terrorism, which may contribute to destabilized and damage economic systems. In particular, money laundering have acquired great importance since the 11S attacks, what has caused on the one hand, the establishment and development of preventive measures and, on the other hand, a progressive hardening of penal measures. Since then, the regulations imposed to fight against money laundering have been viewed as key components also in the fight against terrorist financing. Terrorism, at the beginning, was a “national” crime connected with internal problems of the State (for instance the RAF in Germany or ETA in Spain) but in the last 20 years has started to be an international problem that is connected with the defence and security of the States. Therefore, the new strategic concept for the defense and security of NATO has a comprehensive list of security threats to the Alliance, such as terrorism, international instability, money laundering or attacks on cyberspace, among others. With this new concept, money laundering and terrorism has become a priority in the national defense. In this work we will analyze the methods to combat these new threats to the national security. We will study the preventive legislations to combat money laundering and financing of terrorism, the UIF that exchange information between States, and the hawala-Banking.

Keywords: control of financial flows, money laundering, terrorism, financing of terrorism

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Authors: Zuzana Fišerová, Marie Paseková

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Debt relief (also labelled personal bankruptcy) is a bankruptcy settlement method which was implemented into Czech legislation by the Insolvency Act (Act No. 182/2006 Coll. on Insolvency and its Resolution) on 1 January 2008. The need to implement the institute of personal bankruptcy arose from the excessive over-indebtedness of many inhabitants of the Czech Republic after the crisis that arose around 2008 and 2009. The contribution analyses the development in the manner in which households approach personal bankruptcy and assesses and surveys the differences between indebtedness among men and women. The first section analyses the development in numbers of filed personal bankruptcy petitions and the successfulness thereof; it likewise analyses the impact of other economic influences (regional differences, unemployment etc.). The differences between debtors in dependency to gender are also surveyed. A survey of insolvency proceedings for 664 persons whose insolvency proceedings were commenced in 2008 was conducted, whilst the data were acquired from the publicly accessible insolvency register. The hypothesis on the equality of the average debt level of men and women was tested when comparing indebtedness in dependency to debtor gender. At a significance level of 0.05, the test confirmed that the mean value of debt level for women is lower than the mean value of debt level for men. Through analysis of further results, it was found that the average level of debt among women was CZK 537 thousand, while the average level of creditor satisfaction reached 46.2%. Men in the monitored sample had an average level of reported receivables of CZK 652 thousand, satisfaction of their creditors reached 58.8%. The main changes in the institute of personal bankruptcy are then evaluated in the closing discussion, and the impacts of these changes for households are assessed. The development of legislation in the Czech Republic and practice are shifting towards broader usage of personal bankruptcy, especially insofar as it can now also be used by entrepreneurs. Furthermore, the amendment of the Insolvency Act has enabled married couples to apply for joint debt relief, which has improved the position of the marriage partner with lower income and who would not get permission for debt relief on his/her own (mostly women are at issue). In current practice, the condition of adequate income is also solved by the fact that another person (usually a family member) undertakes to donate a certain monthly sum throughout the duration of the debt relief. Personal bankruptcy can thus be completed also by individuals to whom it would previously have been denied by the court.

Keywords: debtor, households, insolvency act, over-indebtedness, personal bankruptcy

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Authors: Damanhur Munardi, Muhammad Hafiz, Dina Nurmalita Sari, Syarifah Ridani Alifa

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Purpose: This research aims to analyze the Benefits, Opportunity, Cost, and Risk aspects of applying the Green Finance concept and to obtain the right Green Finance financing strategy to be implemented within a long-term and short-term strategic framework.Methodology: This research method uses a qualitative-descriptive analysis approach. The analysis technique uses Analytical Network Process (ANP) with a BOCR network structure approach.Findings: The research results show that the most priority long-term strategic alternative based on the long-term BOCR analysis is increasing awareness among the public and industry by 52% and the importance of coordination between related institutions by 50%. Meanwhile, the most priority short-term strategic alternatives are the importance of coordination between related institutions 29%, increasing awareness among the public and industry 28%, the banking industry proactively funding environmentally friendly companies and technology 23%, the existence of Green Finance POS (Standard Operating Procedures) 20%.Implications: This research can be used as a reference for regulators and policymakers in making strategic decisions that can increase green finance financing. The novelty of this research is identifying problems that occur in green finance financing in Aceh province by analyzing opinions from experts in related fields and financial regulators in Aceh to create a strategy that can be implemented to increase green finance financing in Aceh province through BPD in Aceh, namely Bank Aceh.

Keywords: green financing, banking, sharia, islamic

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Authors: Afrizon Reskino

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The Article explores how the role of Zakat and Corporate Social Responsibility (CSR) can enhance corporate values. This research is a descriptive study which aimed to find out how the impact of Zakat and CSR disclosure towards corporate values. Sample taken in this research is the company has entered into the Jakarta Islamic Index, and it estimated to have implemented CSR and also made statements of sources and uses of Zakat taking PT. INCO, PT. Inducement and PT. Semen Gresik. The reasons for selecting of three companies are known from the data and facts every year they always provide significant CSR funds. CSR and charity both have a role and responsibility for the welfare of the peoples. This study found that in 2008, debt-to-equity ratio of PT. INCO approximately 15%. In 2009, It increased to 23%. While Debt-to-equity ratio of PT Semen Gresik increase of 3% to 4%. PT Inducement is weaken from 10% to 7%, but the average debt-to-equity ratio of the three companies has increased.

Keywords: zakat, charity, corporate social responsibility, corporate values

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Authors: Norm Josephy, Lucy Kimball, Victoria Steblovskaya

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Hedging of a portfolio of European options under proportional transaction costs is considered. Our discrete time financial market model extends the binomial market model with transaction costs to the case where the underlying stock price ratios are distributed over a bounded interval rather than over a two-point set. An optimal hedging strategy is chosen from a set of admissible non-self-financing hedging strategies. Our approach to optimal hedging of a portfolio of options is based on theoretical foundation that includes determination of a no-arbitrage option price interval as well as on properties of the non-self-financing strategies and their residuals. A computational algorithm for optimizing an investor relevant criterion over the set of admissible non-self-financing hedging strategies is developed. Applicability of our approach is demonstrated using both simulated data and real market data.

Keywords: extended binomial model, non-self-financing hedging, optimization, proportional transaction costs

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Authors: Achsania Hendratmi, Puji Sucia Sukmaningrum, Fatin Fadhilah Hasib, Nisful Laila

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The research aimed to know the influence of Capital Adequacy Ratio (CAR), Return on Assets (ROA) and Size of the Financing to Deposit Ratio (FDR) Islamic Banks in Malaysia by using eleven Islamic Banks in Indonesia and fifteen Islamic Banks in Malaysia in the period 2012 to 2016 as samples. The research used a quantitative approach method, and the analysis technique used multiple linear regression. Based on the result of t-test (partial), CAR, ROA and size significantly affect of FDR. While the results of f-test (simultaneous) showed that CAR, ROA and Size significant effect on FDR.

Keywords: capital adequacy ratio, financing to deposit ratio, return on assets, size

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Authors: Uzoma Emmanuel Igboji

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This paper examines the influence of public debts (external and internal) on economic growth and development in Nigeria from (1980-2015). The study uses aggregate GDP as a proxy for economic growth, per capital income as a proxy for standard of living and Government expenditure on health as a proxy for human capital development, while Foreign Direct Investment, Unemployment rate, and Oil revenue were used as control variables. The study made use of ex-post facto research design with the data extracted from the Central Bank of Nigeria (CBN) Statistical Bulletin and the World Bank database. It adopted a multiple regression analysis of the ordinary least square (OLS) method with the help of E-View version 3.0. The results revealed that external debt has a negative and insignificant effect on GDP, per capital income and human capital development. The study concluded that external debts were being channeled to meet the recurrent expenditures of the nation’s economy at the expense of productive investment that could stimulate growth and poverty alleviation. It, however, recommended that government should ensure that the bulk of the total borrowings are mostly sourced from within the domestic economy so that the repayment of the principal and interest will serve as a crowd in-effect rather that crowd out-effect which in turn further accelerates the country’s economic growth and development.

Keywords: economic growth, external debt, internal debt, Nigeria

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Authors: Tafadzwa Shumba, Rose C. Nyatondo, Regret Sunge

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This research analyses the impact of budget deficits on the economic performance of Zimbabwe. The study employs the autoregressive distributed lag (ARDL) confines testing method to co-integration and long-run estimation using time series data from 1980-2018. The Augmented Dick Fuller (ADF) and the Granger approach were used to testing for stationarity and causality among the factors. Co-integration test results affirm a long term association between GDP development rate and descriptive factors. Causality test results show a unidirectional connection between budget shortfall to GDP development and bi-directional causality amid debt and budget deficit. This study also found unidirectional causality from debt to GDP growth rate. ARDL estimates indicate a significantly positive long term and significantly negative short term impact of budget shortfall on GDP. This suggests that budget deficits have a short-run growth retarding effect and a long-run growth-inducing effect. The long-run results follow the Keynesian theory that posits that fiscal deficits result in an increase in GDP growth. Short-run outcomes follow the neoclassical theory. In light of these findings, the government is recommended to minimize financing of recurrent expenditure using a budget deficit. To achieve sustainable growth and development, the government needs to spend an absorbable budget deficit focusing on capital projects such as the development of human capital and infrastructure.

Keywords: ARDL, budget deficit, economic performance, long run

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Authors: Yongsheng Guo, Mengyu Lu

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This study investigates how Chinese SMEs manage financial risks in customer financing. 32 interviews were conducted, and grounded theory models were developed to link the causal conditions, actions, and consequences. This study found that Chinese ethical principles, including integrity, friendship, reciprocity, and cultural traits, including collectivism, acquaintance society, and long-term orientation, provide conditions for customer financing. The SMEs establish trust-based relationships with customers and build a social network. The SMEs reduce financial risk through diversification, frequent operations and enterprise reputations. Both customers and SMEs can get benefits, including customer experience and financial rewards for customers and financial resources and customer base for SMEs. But there are some problems, like default for customers and financial cost for enterprises. This study develops a resource and process capability theory of SMEs and a customer capital and customer value theory to connect finance, accounting, and management concepts.

Keywords: CRM, culture, ethics, financing from customer, SME

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Authors: Tobias Huttche, Marco Canipa-Valdez, Corinne Mühlebach

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This article discusses the role of leasing on the digital transformation process of companies and corresponding economic effects. Based on the traditional mechanisms of leasing, this article focuses in particular on the benefits of leasing as financing instrument with regard to the innovation potential of companies. Practical examples demonstrate how leasing can become an integral part of new business models. Especially, with regard to the digital transformation and corresponding investments in know-how and infrastructure, leasing can play an important role. Furthermore, findings of an empirical survey are presented dealing with the usage of leasing in Switzerland in an international context. The survey shows not only the benefits of leasing against the backdrop of digital transformation but gives guidance on how other countries can benefit from promoting leasing in their legislation and economy. Based on a simulation model for Switzerland, the economic effect of an increase in leasing volume is being calculated. Again, the respective results underline the substantial growth potential. This holds true especially for economies where asset-based lending is rarely used because of a lack of entrepreneurial or private security of the borrower (cash-based financing for developing and emerging countries). Overall, the authors found that leasing using companies are more productive and tend to grow faster than companies using less or none leasing. The positive effects of leasing on emerging digital challenges for companies and entire economies should encourage other countries to facilitate access to leasing as financing instrument by decreasing legal-, tax- and accounting-related requirements in the respective jurisdiction.

Keywords: Cash-Based financing, digital transformation, financing instruments, growth, innovation, leasing

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Authors: Siti Nor Amira Bt. Mohamad, Mohamad Yazis B. Ali Basah, Muhammad Ridhwan B. Ab. Aziz, Khairil Faizal B. Khairi, Mazlynda Bt. Md. Yusuf, Hisham B. Sabri

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The understanding of risk and the concept of it occurs associated in Islamic financing was well-known in the financial industry by the using of Profit-and-Loss Sharing (PLS). It was presently in any Islamic financial transactions in order to comply with shariah rules. However, the existence of risk in Murabahah contract of financing is an ability that the counterparty is unable to complete its obligations within the agreed terms. Therefore, it is called as credit or default risk. Credit risk occurs when the client fails to make timely payment after the bank makes complete delivery of assets. Thus, it affects the growth of the bank as the banking business is in no position to have appropriate measures to cover the risk. Therefore, the bank may impose penalty on the outstanding balance. This paper aims to highlight the credit risk determinant and issues surrounding in Islamic bank in Malaysia in terms of Murabahah financing and how to manage it by using the proper techniques. Finally, it explores the credit risk management concept that might solve the problems arise. The study found that the credit risk can be managed properly by improving the use of comprehensive reference checklist of business partners on their character and past performance as well as their comprehensive database. Besides that, prevention of credit risk can be done by using collateral as security against the risk and we also argue on the Shariah guidelines and procedures should be implement coherently by the banking business because so that the risk would be control by having an effective instrument for Islamic modes of financing.

Keywords: Islamic banking, credit risk, Murabahah financing, risk mitigation

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Authors: Amenawo I. Offiong, Hodo B. Riman

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Public debt profile of Nigeria has continuously been on the increase over the years. The drop in international crude oil prices has further worsened revenue position of the country, thus, necessitating further acquisition of public debt to bridge the gap in revenue deficit. Yet, when we look back at the increasing public sector spending, there are concerns that the government spending do not amount to increase in public goods provided for the country. Using data from 1980 to 2014 the study therefore seeks to investigate the factors responsible for the poor provision of public goods in the face of increasing public debt profile. Using the unrestricted VAR model Governance and Tax revenue were introduced into the model as structural variables. The result suggested that governance and tax revenue were structural determinants of the effectiveness of public goods provisioning in Nigeria. The study therefore identified weak governance as the major reason for the non-provision of public goods in Nigeria. While tax revenue exerted positive influence on the provisions of public goods, weak/poor governance was observed to crowd the benefits from increase tax revenue. The study therefore recommends reappraisal of the governance system in Nigeria. Elected officers in governance should be more transparent and accountable to the electorates they represent. Furthermore, the study advocates for an annual auditing of all government MDAs accounts by external auditors to ensure (a) accountability of public debts utilization, (b) transparent in implementation of program support funds, (c) integrity of agencies responsible for program management, and (d) measuring program effectiveness with amount of funds expended.

Keywords: impulse response function, public debt shocks, governance, public goods, tax revenue, vector auto-regression

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Authors: Sobar M. Johari, Ida Putri Anjarsari

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In the transmission of monetary instrument towards real sector of the economy, Bank Indonesia as monetary authority has developed Islamic Bank Indonesia Certificate (abbreviated as SBIS) as an instrument in Islamic open market operation. One of the monetary transmission channels could take place through financing channel from which the fund is used as the source of banking financing. This study aims to analyse the impact of Islamic monetary instrument towards output or economic growth. Data used in this research is taken from Bank Indonesia and Central Board of Statistics for the period of January 2008 until December 2015. The study employs Granger Causality Test, Vector Error Correction Model (VECM), Impulse Response Function (IRF) technique and Forecast Error Variance Decomposition (FEVD) as its analytical methods. The results show that, first, the transmission mechanism of banking financing channel are not linked to output. Second, estimation results of VECM show that SBIS, PUAS, and FIN have significant impact in the long term towards output. When there is monetary shock, output or economic growth could be recovered and stabilized in the short term. FEVD results show that Islamic banking financing contributes 1.33 percent to increase economic growth.

Keywords: Islamic monetary instrument, Islamic banking financing channel, economic growth, Vector Error Correction Model (VECM)

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Authors: Riko Wahyudi, Rezky Lasekti Wicaksono, Ayu Satya Damayanti, Ridhasepta Multi Kenrosa

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Implementing Forest Management Unit (FMU) is considered as the best solution for forest management in developing countries. However, when FMU has been formed, many parties then blame the FMU and assume it is not working on. Currently, there are two main issues that make FMU not be functional i.e. institutional and financial issues. This paper is addressing financial issues to make FMUs in Aceh Province can be functional. A mixed financing scheme is proposed here, both direct and indirect financing. The direct financing scheme derived from two components i.e. public funds and businesses. Non-tax instruments of intergovernmental fiscal transfer (IFT) system and FMU’s businesses are assessed. Meanwhile, indirect financing scheme is conducted by assessing public funds within villages around forest estate as about 50% of total villages in Aceh Province are located surrounding forest estate. Potential instruments under IFT system are forest and mining utilization royalties. In order to make these instruments become direct financing for FMU, interventions on allocation and distribution aspects of them are conducted. In the allocation aspect, alteration in proportion of allocation is required as the authority to manage forest has shifted from district to province. In the distribution aspect, Government of Aceh can earmark usage of the funds for FMUs. International funds for climate change also encouraged to be domesticated and then channeled through these instruments or new instrument under public finance system in Indonesia. Based on FMU’s businesses both from forest products and forest services, FMU can impose non-tax fees for each forest product and service utilization. However, for doing business, the FMU need to be a Public Service Agency (PSA). With this status, FMU can directly utilize the non-tax fees without transferring them to the state treasury. FMU only need to report the fees to Ministry of Finance. Meanwhile, indirect financing scheme is conducted by empowering villages around forest estate as villages in Aceh Province is receiving average village fund of IDR 800 million per village in 2017 and the funds will continue to increase in subsequent years. These schemes should be encouraged in parallel to establish a mixed financing scheme in order to ensure sustainable financing for FMU in Aceh Province, Indonesia.

Keywords: forest management, public funds, mixed financing, village

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Authors: Dimitrios J. Dimitriou, Maria F. Sartzetaki

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Transport infrastructures are high-cost, long-term investments that serve as vital foundations for the operation of a region or nation and are essential to a country’s or business’s economic development and prosperity, by improving well-being and generating jobs and income. The development of appropriate financing options is of key importance in the decision making process in order develop viable transport infrastructures. The development of transport infrastructure has increasingly been shifting toward alternative methods of project financing such as Public Private Partnership (PPPs) and hybrid forms. In this paper, a methodological decision-making framework based on the evaluation of the financial viability of transportation infrastructure for different financial schemes is presented. The framework leads to an assessment of the financial viability which can be achieved by performing various financing scenarios analyses. To illustrate the application of the proposed methodology, a case study of rail transport infrastructure financing scenario analysis in Greece is developed.

Keywords: rail transport infrastructure, financial viability, scenario analysis, rail project feasibility

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Authors: Samuel Holder

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Mass incarceration in the United States is a human rights issue, not merely a civil rights problem. It is a human rights problem not only because the United States has a high rate of incarceration, but more importantly because of who is jailed, for what purpose they are jailed and, ultimately, the manner in which they are jailed. To sustain the scale of the criminal justice system, one of the darker policies involves a multi-tiered strategy of fee- and fine-collection, targeting, usually, the most vulnerable and poor, many of whom run into the law via small offenses that do not rise to the level of felonies. This paper advances the notion that this debt collection-to-incarceration pipeline is tantamount to a modern-day debtors’ prison system. This article seeks to confront the thorny issue of incarceration via criminal justice debt from a human rights and cause-lawyering position. It will argue that a two-pronged cause-lawyering strategy: the first focused on traditional litigation along constitutional grounds, and the second, an advocacy approach rooted in grassroots campaigns, designed to shift the normative operation and understanding of the rights of marginalized and racialized offenders. Ultimately, the argument suggests that this approach will be effective in combatting the (often highly privatized) criminal justice debt system and bring the roles of 'incapacitation, rehabilitation, deterrence, and retribution' back into the criminal justice legal conversation. Part I contextualizes and historicizes the role of fees, penalties, and fines in American criminal justice. Part II examines the emergence of private industry in the criminal justice system, and its role in the acceleration of profit-driven criminal justice debt collection and incarceration. Part III addresses the failures of the federal and state law and legislation in combatting predatory incarceration and debt collection in the criminal justice system, particularly as waged against the indigent and/or ethnically or racially marginalized. Part IV examines the potential for traditional cause-lawyering litigation along constitutional grounds, using case studies across contexts for illustration. Finally, Part V will review the radical cause-lawyer’s role in the normative struggle in redefining prisoners’ rights and the rights of the marginalized (and racialized) as they intersect at the crossroads of criminal justice debt. This paper will conclude with recommendations for litigation and advocacy, drawing on hypotheses advanced, and informed by case studies from a variety of both national and international jurisdictions.

Keywords: cause-lawyering, criminal justice debt, human rights, judicial fees

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Authors: Sintayehu Aynalem Aseres, Raminder Kaur Sira

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Increasingly, protected areas have been confronting with inadequate conservation funds that make it tough to antithesis the continuing of annihilation. The problem is even grave in developing countries, where Protected Areas (Pas) are mainly government-administered. Subsequently, it needs a strong effort to toughen the self-financing capability of PAs by ripening alternative sources of sustainable financing for realizing the conservation goals, in particular, to save the remaining natural planet. This study, therefore, designed to estimate visitors’ willingness to pay (WTP) for the additional conservation fees using a contingent valuation method. The effect relationship between WTP and both socio-demographic and non-economic factors was scrutinized by binary logistic regression. The mean WTP of foreign visitors has estimated at US$ 7.4 and for that of domestic visitors at US$1, with annual aggregate revenue of US$29, 200. The WTP was strongly influenced by income, satisfaction, environmental concern and attitude. The study has policy implications for the conservationists and park authorities to estimate the non-use values of PAs for developing market-based conservation instruments.

Keywords: conservation, ecotourism, sustainable financing, willingness to pay, protected areas, bale mountains national park

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Authors: Petra Buzkova, Milos Kopa

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Reliability of the credit default swap market had been questioned repeatedly during the EMU debt crisis. The article examines whether this development influenced sovereign EMU CDS prices in general. We regress the CDS market price on a model risk neutral CDS price obtained from an adopted reduced form valuation model in the 2009-2013 period. We look for a break point in the single-equation and multi-equation econometric models in order to show the changes in relations between CDS market and model prices. Our results differ according to the risk profile of a country. We find that in the case of riskier countries, the relationship between the market and model price changed when market participants started to question the ability of CDS contracts to protect their buyers. Specifically, it weakened after the change. In the case of less risky countries, the change happened earlier and the effect of a weakened relationship is not observed.

Keywords: chow stability test, credit default swap, debt crisis, reduced form valuation model, seemingly unrelated regression

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Authors: Simeon Karafolas, Maciej Woźniak

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Mostly of public financing programs at national and regional level are funded from European Union sources. EU can participate directly to a national and regional program (example LEADER initiative, URBAN…) or indirectly by funding regional or national funds. Funds from European Union are provided from EU multiannual financial framework form which the annual budget is programmed. The adjusted program 2007-2013 of the EU considered commitments of almost 1 trillion Euros for the EU-28 countries. Provisions of the new program 2014-2020 consider commitments of more than 1 trillion Euros. Sustainable growth, divided to Cohesion and Competitiveness for Growth an Employment, is one of the two principal categories; the other is the preservation and management of natural resources. Through this financing process SMEs benefited of EU and public sources by receiving grants for their investments. Most of the financial instruments are available indirectly through the national financial intermediaries. Part of them is managed by the European Investment Fund. The paper focuses on the public financing to SMEs by examining case studies on divers forms of public help. It tries to distinguish the efficiency of the examined good practices and therefore try to have some conclusions on the possibility of application to other regions.

Keywords: DIFASS, grants, SMEs, public financing

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Authors: Hasna Elalaoui Elabdallaoui, Abdelaziz Elfazziki, Mohamed Sadgal

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Outlines: The social economy is a moral approach to solidarity applied to the projects’ development. To reconcile economic activity and social equity, crowdfunding is as an alternative means of financing social projects. Several collaborative blockchain platforms exist. It eliminates the need for a central authority or an inconsiderate middleman. Also, the costs for a successful crowdfunding campaign are reduced, since there is no commission to be paid to the intermediary. It improves the transparency of record keeping and delegates authority to authorities who may be prone to corruption. Objectives: The objectives are: to define a software infrastructure for projects’ participatory financing within a social and solidarity economy, allowing transparent, secure, and fair management and to have a financial mechanism that improves financial inclusion. Methodology: The proposed methodology is: crowdfunding platforms literature review, financing mechanisms literature review, requirements analysis and project definition, a business plan, Platform development process and implementation technology, and testing an MVP. Contributions: The solution consists of proposing a new approach to crowdfunding based on Islamic financing, which is the principle of Mousharaka inspired by Islamic financing, which presents a financial innovation that integrates ethics and the social dimension into contemporary banking practices. Conclusion: Crowdfunding platforms need to secure projects and allow only quality projects but also offer a wide range of options to funders. Thus, a framework based on blockchain technology and Islamic financing is proposed to manage this arbitration between quality and quantity of options. The proposed financing system, "Musharaka", is a mode of financing that prohibits interests and uncertainties. The implementation is offered on the secure Ethereum platform as investors sign and initiate transactions for contributions using their digital signature wallet managed by a cryptography algorithm and smart contracts. Our proposal is illustrated by a crop irrigation project in the Marrakech region.

Keywords: social economy, Musharaka, blockchain, smart contract, crowdfunding

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Authors: Mojtaba Rezaei, Elham Heydari

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This paper highlights the empirical results of analyzing the correlation between accounting information and systematic risk. This association is analyzed among financial ratios and systematic risk by considering the financial statement of 39 companies listed on the Tehran Stock Exchange (TSE) for five years (2014-2018). Financial ratios have been categorized into four groups and to describe the special features, as representative of accounting information we selected: Return on Asset (ROA), Debt Ratio (Total Debt to Total Asset), Current Ratio (current assets to current debt), Asset Turnover (Net sales to Total assets), and Total Assets. The hypotheses were tested through simple and multiple linear regression and T-student test. The findings illustrate that there is no significant relationship between accounting information and market risk. This indicates that in the selected sample, historical accounting information does not fully reflect the price of stocks.

Keywords: accounting information, market risk, systematic risk, stock return, efficient market hypothesis, EMH, Tehran stock exchange, TSE

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Authors: Y. Fandja, O. Colot, M. Croquet

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Small and medium-sized firms (SMEs) face difficulties in accessing bank credit. Bank credit is actually the main source of external financing for SMEs. In general, SMEs are risky businesses because of the potential opacity maintained by the leader in the management of affairs, the agency conflicts between business owners and third-party funders and the potential opportunism of the leader due to the incompleteness of the contracts. These elements accentuate the problems of information asymmetries between SMEs and bankers leading to capital rationing. Moreover, the last economic crisis reinforced this rationing of capital. However, a long-term relationship between SMEs and their bank would enable the latter to accumulate a set of relevant information allowing the reduction of information asymmetry and, consequently, the reduction of credit rationing. The objective of this research is to investigate the lived experience of SMEs loan officers in their relationships with their clients in order to understand how these relationships can affect the financing structure of these SMEs. To carry out this research, an Interpretative Phenomenological Analysis is implemented. This approach is part of the constructivist paradigm and refers to the subjective narratives of the individual rather than to an objective description of the facts. The role of the researcher is to explore the lived experience of the interviewees and to try to understand the meaning they give to this experience. Currently, several sixty-minute semi-structured interviews with loan officers for SMEs have been conducted. The analysis of the content of these interviews brought out three main themes. First, the relationship between the credit officer and the company manager is complex because the credit officer is not aware of establishing a personal relationship with his client. Second; the emotional involvement in the bank financing decision is present and third, the trust in the relationship between the credit officer and his client is very important. The originality of this research is to use the interpretative phenomenological analysis more specific to psychology and sociology in order to approach in a different way the problem of the financing of SMEs through their particular relations with the bankers.

Keywords: financing structure, interpretative phenomenological analysis, relationship financing, SME

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Authors: Nomakhosi Tshuma, Carley Chetty

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This study employed panel regression analysis to investigate the financial performance determinants of MTN and Vodacom’s rest of Africa businesses between 2012 to 2020. It used net profit margin, return on assets (ROA), and return on equity (ROE) as financial performance proxies. Financial performance determinants investigated were asset size, debt ratio, liquidity, number of subscribers, and exchange rate. Data relating to exchange rates were obtained from the World Bank website, while financial data and subscriber information were obtained from the companies’ audited financial statements. The study found statistically significant negative relationships between debt and both ROA and net profit, exchange rate and both ROA and net profit, and subscribers and ROE. It also found significant positive relationships between ROE and both asset size and exchange rate. The study recommends strategic options that optimise on the above findings, and these include infrastructure sharing to reduce infrastructure costs and the minimisation of foreign-denominated debt.

Keywords: financial performance, determinants of financial performance, business in Africa, telecommunications industry

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Authors: Haytham Yassine

Abstract:

This research seeks to identify how money laundering activities are executed through the real estate sector. This article provides academics with literature on the topic and provides scholars, and practitioners with a better understanding of the risks and challenges involved. Data are gathered through survey in the Middle East and North Africa region and review of the available research. The results of the analysis will help identifying the factors attracting criminals to the real estate sector and develop an understanding of the methods used to launder illicit funds through this sector and the indicators of suspicion for reporting entities. Further analysis reveals the risks posed by money laundering and terrorist financing on the real estate sector and challenges facing states in this regard.

Keywords: money laundering, terrorism financing, real estate sector, Middle East and North Africa

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Authors: Xiaojing Wang, Ann-Marie Ward, Tony Wall

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The problem of over-indebtedness has increased since deregulation of the banking industry in the 1980s, and now it has become a major problem for most countries in Europe, including Germany. Consumer debt issues have attracted not only the attention of academics but also government and debt counselling institutions. Overall, this research aims to contribute to the knowledge gap regarding the causes of consumer over-indebtedness in Germany and to develop predictive models for assessing consumer over-indebtedness risk at consumer level. The situation of consumer over-indebtedness is serious in Germany. The relatively high level of social welfare support in Germany suggests that consumer debt problems are caused by other factors, other than just over-spending and income volatility. Prior literature suggests that the overall stability of the economy and level of welfare support for individuals from the structural environment contributes to consumers’ debt problems. In terms of cultural influence, the conspicuous consumption theory in consumer behaviour suggests that consumers would spend more than their means to be seen as similar profiles to consumers in a higher socio-economic class. This results in consumers taking on more debt than they can afford, and eventually becoming over-indebted. Studies have also shown that financial literacy is negatively related to consumer over-indebtedness risk. Whilst prior literature has examined structural and cultural influences respectively, no study has taken a collective approach. To address this gap, a model is developed to investigate the association between consumer over-indebtedness and proxies for influences from the structural and cultural environment based on the above theories. The model also controls for consumer demographic characteristics identified as being of influence in prior literature, such as gender and age, and adverse shocks, such as divorce or bereavement in the household. Benefiting from SOEP regional data, this study is able to conduct quantitative empirical analysis to test both structural and cultural influences at a localised level. Using German Socio-Economic Panel (SOEP) study data from 2006 to 2016, this study finds that social benefits, financial literacy and the existence of conspicuous consumption all contribute to being over-indebted. Generally speaking, the risk of becoming over-indebted is high when consumers are in a low-welfare community, have little awareness of their own financial situation and always over-spend. In order to tackle the problem of over-indebtedness, countermeasures can be taken, for example, increasing consumers’ financial awareness, and the level of welfare support. By analysing causes of consumer over-indebtedness in Germany, this study also provides new insights on the nature and underlying causes of consumer debt issues in Europe.

Keywords: consumer, debt, financial literacy, socio-economic

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Authors: Hussain Bohra, Pradyuman Sharma

Abstract:

This study highlights the significance of Balance Sheet Indicators on the corporate performance in the case of Indian manufacturing companies. Balance sheet indicators show the actual financial health of the company and it helps to the external investors to choose the right company for their investment and it also help to external financing agency to give easy finance to the manufacturing companies. The period of study is 2000 to 2014 for 813 manufacturing companies for which the continuous data is available throughout the study period. The data is collected from PROWESS data base maintained by Centre for Monitoring Indian Economy Pvt. Ltd. Panel data methods like fixed effect and random effect methods are used for the analysis. The Likelihood Ratio test, Lagrange Multiplier test and Hausman test results proof the suitability of the fixed effect model for the estimation. Return on assets (ROA) is used as the proxy to measure corporate performance. ROA is the best proxy to measure corporate performance as it already used by the most of the authors who worked on the corporate performance. ROA shows return on long term investment projects of firms. Different ratios like Current Ratio, Debt-equity ratio, Receivable turnover ratio, solvency ratio have been used as the proxies for the Balance Sheet Indicators. Other firm specific variable like firm size, and sales as the control variables in the model. From the empirical analysis, it was found that all selected financial ratios have significant and positive impact on the corporate performance. Firm sales and firm size also found significant and positive impact on the corporate performance. To check the robustness of results, the sample was divided on the basis of different ratio like firm having high debt equity ratio and low debt equity ratio, firms having high current ratio and low current ratio, firms having high receivable turnover and low receivable ratio and solvency ratio in the form of firms having high solving ratio and low solvency ratio. We find that the results are robust to all types of companies having different form of selected balance sheet indicators ratio. The results for other variables are also in the same line as for the whole sample. These findings confirm that Balance sheet indicators play as significant role on the corporate performance in India. The findings of this study have the implications for the corporate managers to focus different ratio to maintain the minimum expected level of performance. Apart from that, they should also maintain adequate sales and total assets to improve corporate performance.

Keywords: balance sheet, corporate performance, current ratio, panel data method

Procedia PDF Downloads 236