Interest Rates, Credit Rationing, and Investment in Developing Countries PDF Download
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Author: Ms.Mwanza Nkusu
Publisher: International Monetary Fund
ISBN: 1451848447
Category : Business & Economics
Languages : en
Pages : 32
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Book Description
This paper examines the impact of interest rates and inflation on bank loans and investment within a framework that mimics the financial sectors prevailing in most low-income developing countries. The paper emphasizes the importance of treating the lending and deposit rates of interest as distinct parameters in investment equations. The spread between the two rates is indicative of default risk and has a negative impact on incremental loan amounts associated with higher lending rates, in particular in economies with flawed institutions. The model presented in the paper highlights the importance of promoting macroeconomic stability and upgrading institutions and informational infrastructure.
Author: Ms.Mwanza Nkusu
Publisher: International Monetary Fund
ISBN: 1451848447
Category : Business & Economics
Languages : en
Pages : 32
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Book Description
This paper examines the impact of interest rates and inflation on bank loans and investment within a framework that mimics the financial sectors prevailing in most low-income developing countries. The paper emphasizes the importance of treating the lending and deposit rates of interest as distinct parameters in investment equations. The spread between the two rates is indicative of default risk and has a negative impact on incremental loan amounts associated with higher lending rates, in particular in economies with flawed institutions. The model presented in the paper highlights the importance of promoting macroeconomic stability and upgrading institutions and informational infrastructure.
Author: William E. James
Publisher:
ISBN:
Category : Agricultural credit
Languages : en
Pages : 70
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Book Description
Author: Mwanza Nkusu
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
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Book Description
Author: John Wakeman-Linn
Publisher: World Bank Publications
ISBN:
Category : Debts, Public
Languages : en
Pages : 47
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Book Description
Creditors and highly indebted countries alike would benefit from a credit market in which penalties for default were heavier or more certain, in which multinational and international organizations were used to improve the flow of information about the debtor countries to possible creditors, and in which methods were designed to increase the precommitment of funds.
Author: Mwanza Nkusu
Publisher:
ISBN:
Category :
Languages : en
Pages : 222
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Book Description
Author: Mansoor Dailami
Publisher:
ISBN:
Category : Credit control
Languages : en
Pages : 40
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Book Description
The joint effect of both the volume of credit and its price - that is, the interest rate - is relevant to firms' investment decisions. So effective credit policy in developing countries must take into account the influence of both the credit supply and the interest rate, not just one or the other.
Author: Avishay Braverman
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 44
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Book Description
Author: Patrick Bolton
Publisher: Russell Sage Foundation
ISBN: 1610440757
Category : Social Science
Languages : en
Pages : 315
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Book Description
Access to credit is an important means of providing people with the opportunity to make a better life for themselves. Loans are essential for most people who want to purchase a home, start a business, pay for college, or weather a spell of unemployment. Yet many people in poor and minority communities—regardless of their creditworthiness—find credit hard to come by, making the climb out of poverty extremely difficult. How dire are the lending markets in these communities and what can be done to improve access to credit for disadvantaged groups? In Credit Markets for the Poor, editors Patrick Bolton and Howard Rosenthal and an expert team of economists, political scientists, and legal and business scholars tackle these questions with shrewd analysis and a wealth of empirical data. Credit Markets for the Poor opens by examining what credit options are available to poor households. Economist John Caskey profiles how weak credit options force many working families into a disastrous cycle of short-term, high interest loans in order to sustain themselves between paychecks. Löic Sadoulet explores the reasons that community lending organizations, which have been so successful in developing countries, have failed in more advanced economies. He argues the obstacles that have inhibited community lending groups in industrialized countries—such as a lack of institutional credibility and the high cost of establishing lending networks—can be overcome if banks facilitate the community lending process and establish a system of repayment insurance. Credit Markets for the Poor also examines how legal institutions affect the ability of the poor to borrow. Daniela Fabbri and Mario Padula argue that well-meaning provisions making it more difficult for lenders to collect on defaulted loans are actually doing a disservice to the poor in credit markets. They find that in areas with lax legal enforcement of debt agreements, credit markets for the poor are underdeveloped because lenders are unwilling to take risks on issuing credit or will do so only at exorbitant interest rates. Timothy Bates looks at programs that facilitate small-business development and finds that they have done little to reduce poverty. He argues that subsidized business creation programs may lure inexperienced households into entrepreneurship in areas where little profitable investment is possible, hence setting them up for failure. With clarity and insightful analysis, Credit Markets for the Poor demonstrates how weak credit markets are impeding the social and economic mobility of the needy. By detailing the many disadvantages that impoverished people face when seeking to borrow, this important new volume highlights a significant national problem and offers solutions for the future.
Author: Santonu Basu
Publisher: Edward Elgar Publishing
ISBN:
Category : Credit
Languages : en
Pages : 176
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Book Description
Basu (business, South Bank U., London) examines why policies of financial liberalization and intervention have failed to improve all borrowers' access to the loan market. His theory of credit rationing introduces the concepts of credit standard and credit risk as a way of understanding why bankers ration credit to some while offering loans to others. The text is based upon the author's Ph.D. dissertation. Annotation copyrighted by Book News, Inc., Portland, OR
Author: Chien-Hui Ma
Publisher:
ISBN:
Category : Capital market
Languages : en
Pages : 202
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Book Description
