An investigation into the influence of credit ratings on credit risk of the South African banking industry

The financial stability of banks is crucial if they are to fulfil their role in facilitating transactions between borrowers and lenders. The purpose of this study was to investigate the effect of credit risk on the South African banking industry following a movement in credit ratings by rating agencies. Data from a sample of 11 banks were collected from 2006 to 2015. Econometric regression analysis was used to analyse the data. The results show that inflation, credit ratings, exchange rate, gross domestic product, unemployment rate, capital adequacy ratio and size of the bank are significant factors that determine "non-performing loans". Therefore, it is imperative that banks continuously monitor these factors and adapt their credit policies on "non-performing loans". This action would prepare banks for any adverse effects and ensure that the banking industry remains a sound and efficient contributor to the growth of the South African economy.Business ManagementM. Com. (Business Management

Relationship between Challenges Militating against Mortgage Finance and Benefits of Mortgage Acquisition in Ghana: Case of SSNIT

Past studies on the mortgage market of Ghana evidenced that absence of long-term sources of housing funds, low-income levels, macroeconomic instability, inability to assess the creditworthiness of prospective mortgagors among others plague the development of Ghana’s mortgage market. Therefore, this study was conducted to evaluate the relationship between challenges militating against mortgage finance and benefits of mortgage acquisition in Ghana. Questionnaires were used to elicit responses from respondents. Convenience sampling technique was used to select one hundred (100) respondents comprising staff at SSNIT Head Office in Accra, SSNIT contributors, beneficiaries of SSNIT funds, mortgage applicants, owners and occupants of SSNIT flats. Mean score ranking, Cronbach’s Alpha coefficient, one sample t-test and Partial Least Square Structural Equation Modeling (PLS-SEM) were the analytical tools adopted. Dollarization of mortgage markets, access to funding for the scheme, macroeconomic instability and inability to assess creditworthiness of mortgage applicant were the most significant challenges. The most significant benefits were: (1) increase in the rate of house construction; (2) ability to provide a relatively low-interest credit; (3) capacity to mitigate housing deficits; and (4) capability to provide a relatively long-term credit for housing. Structural Equation Model was developed to evaluate the relationship between the challenges and benefits. The study is beneficial to stakeholders such as policymakers, financial institutions, Ghana Real Estate Developers Association (GREDA) and SSNIT contributors. This work is a pioneering study in Ghana on the relationship between challenges SSNIT encounters in mortgage financing and benefits of acquiring mortgage facilities with the assistance of SSNIT

Relationship between Challenges Militating against Mortgage Finance and Benefits of Mortgage Acquisition in Ghana: Case of SSNIT

Past studies on the mortgage market of Ghana evidenced that absence of long-term sources of housing funds, low-income levels, macroeconomic instability, inability to assess the creditworthiness of prospective mortgagors among others plague the development of Ghana’s mortgage market. Therefore, this study was conducted to evaluate the relationship between challenges militating against mortgage finance and benefits of mortgage acquisition in Ghana. Questionnaires were used to elicit responses from respondents. Convenience sampling technique was used to select one hundred (100) respondents comprising staff at SSNIT Head Office in Accra, SSNIT contributors, beneficiaries of SSNIT funds, mortgage applicants, owners and occupants of SSNIT flats. Mean score ranking, Cronbach’s Alpha coefficient, one sample t-test and Partial Least Square Structural Equation Modeling (PLS-SEM) were the analytical tools adopted. Dollarization of mortgage markets, access to funding for the scheme, macroeconomic instability and inability to assess creditworthiness of mortgage applicant were the most significant challenges. The most significant benefits were: (1) increase in the rate of house construction; (2) ability to provide a relatively low-interest credit; (3) capacity to mitigate housing deficits; and (4) capability to provide a relatively long-term credit for housing. Structural Equation Model was developed to evaluate the relationship between the challenges and benefits. The study is beneficial to stakeholders such as policymakers, financial institutions, Ghana Real Estate Developers Association (GREDA) and SSNIT contributors. This work is a pioneering study in Ghana on the relationship between challenges SSNIT encounters in mortgage financing and benefits of acquiring mortgage facilities with the assistance of SSNIT

A Frequency Assessment of Prevalent Prevention Strategies in order to Manage Banks’ NPAs in MSME Loans

The vast amount of non-performing assets (NPAs) is a recurrent problem and a huge barrier to developing a successful banking sector. The MSME sector of the Indian economy is experiencing a worsening problem with delinquent assets. There has hardly been any systematic evaluation of tackling the problem in the context of loans sanctioned to MSMEs. Recent years have seen an increase in bad loans to micro, small, and medium businesses. Curative and preventive measures are both available to control non-performing assets (Meher et al., 2020). The study makes an effort to concentrate on the identification of numerous preventive methods for NPA management in the MSME sector in future. The primary data is related to the actual usage of preventive measures. The data was empirically evaluated using frequency analysis based on a survey of 316 bankers from 10 banks (5 from public and 5 from private sector). Therefore, the current study aims to shed light on the methods utilised to prevent NPAs in MMSEs while taking into account the viewpoint of the bankers who have had direct involvement in lending choices. The findings highlight the key methods for preventing NPAs which the banks must consider while making the necessary structural modifications to their mitigation measures

Framework for managing risk in privately financed market projects in Nigeria

Shortage of funds and the need to improve the living standards of the people are among the reasons advanced for the recent embrace of Public Private Partnership (PPP) arrangements in developing markets in Nigeria. Construction work generally, and especially projects procured using PPP arrangement are more risk prone than those procured using other forms. This is mainly due to the lengthy concession period and the multi-parties involved in the arrangement. It is therefore, an imperative to properly manage the multi-faceted risks associated with PPP market projects (MPs) in a developing economy like Nigeria. Review of the extant literature show that little has been done on risk management in PPP projects in Nigeria with no known effort on PPP MPs. This is due largely to the novelty of the PPP scheme in Nigeria. The main contribution of this research therefore, is better understanding of the risk management process in privately financed (PF) MPs in Nigeria. A holistic risk management framework is developed that identifies best practices in the risk management process with special emphasis on market projects. The structure specifies what should be done, who should do it and when it should be done throughout the whole life cycle of any PPP market project. Risks in (PF) MPs and their impacts were identified and assessed; allocation preferences of practitioners and mitigation measures to the risks were also assessed within the south-western part of the country Data for the study was collected through a mixed methods approach viz: quantitative and qualitative approaches. Questionnaires were administered to practitioners in the industry within the south-western zone of the country to gain general idea on risks that are likely to occur and affect PF MPs within the region. In-depth interviews were also conducted with stakeholders on three PF MPs in the region. Descriptive and inferential statistics were employed to analyse data for the study. The research identified inadequate knowledge of risk management concept in the Nigerian construction industry; especially in PPP projects, as being responsible for the poor performance of PPP projects using the Triple Bottom Line (TBL) - i.e. people, profit, and planet - as yardstick. It is believed that the framework will serve as a useful tool for rapidly learning about the risks involved in PPP market projects and for understanding viable options for their effective management

A hard nut to crack : regulatory failure shows how rating really works

Credit rating agencies such as Moody’s and Standard & Poor’s are key players in the governance of global financial markets. Given the very strong criticism the rating agencies faced in the wake of the global financial crisis 2008, how can we explain the puzzle of their survival? Market and regulatory reliance on ratings continues, despite the shift from a light-touch to a mandatory system of agency regulation and supervision. Drawing on the analysis of rating agency regulation in the US and the EU before and after the financial crisis, we argue that a pervasive, persistent and, in our view, erroneous understanding of rating has supported the never-ending story of rating agency authority. We show how treating ratings as metrics, private goods, and independent and neutral third-party opinions contributes to the ineffectiveness of rating agency regulation and supports the continuing authoritative standing of the credit rating agencies in market and regulatory practices

A hard nut to crack : regulatory failure shows how rating really works

Credit rating agencies such as Moody’s and Standard & Poor’s are key players in the governance of global financial markets. Given the very strong criticism the rating agencies faced in the wake of the global financial crisis 2008, how can we explain the puzzle of their survival? Market and regulatory reliance on ratings continues, despite the shift from a light-touch to a mandatory system of agency regulation and supervision. Drawing on the analysis of rating agency regulation in the US and the EU before and after the financial crisis, we argue that a pervasive, persistent and, in our view, erroneous understanding of rating has supported the never-ending story of rating agency authority. We show how treating ratings as metrics, private goods, and independent and neutral third-party opinions contributes to the ineffectiveness of rating agency regulation and supports the continuing authoritative standing of the credit rating agencies in market and regulatory practices

Concept, Measurement, and Ideology of "National Competitiveness"

The author of this paper reviewing the perceptions of competitiveness reveals the origin and ambiguity of the concept of “national competitiveness” which is mostly confused with that of development of countries and competitiveness of their enterprises. He investigates the role of transnational companies and governments in shaping the world economic position of countries, presents a critique on the measurement of “national competitiveness” of countries, and heavily opposes the ideological use of the latter for justifying antisocial measures