Financing the Post-2015 Sustainable Development Goals: A Rough Roadmap

We regroup the main types of global development finance into three clusters: concessional public finance (including domestic taxes), public borrowing on market-related terms, and private finance. We look at the main purposes they can be used for, and their interdependence. We consider the global outlook for capital markets, the determinants of country creditworthiness and why grant aid should be prioritised for less creditworthy countries. We suggest that financing plans for most of the new Sustainable Development Goals should be developed at the country level rather than globally, so that key trade-offs can be fully explored. We look at specific policies to unlock access to private sector participation in five key areas -- including social services. We introduce a Market Aid Index to help track donor engagement with the private sector. We investigate how a country's mix of development finance changes as it grows -- the so-called 'missing middle' dilemma. We find that public resources overall fall continuously until a country is well into middle income status, as international assistance falls faster than tax revenues rise. Static per capita income thresholds are becoming increasingly unreliable guides to resource allocation. We look at alternative groupings, especially taking into account fiscal capacity, creditworthiness and vulnerability. We assess the recent literature on trade-offs between rapid growth and climate change mitigation imperatives. We examine the geography of public climate finance, which is intrinsically different from that of development aid, and the lack of a credible 'additionality' test for funding the former over and above the latter. We therefore consider how the limited public grant element so far available should best be rationed, to limit the scope for distortions. We revisit the role of the multilateral development banks' market-related windows, in view of the missing middle problem. We consider what factors underpin their secular stagnation, and how to overcome them. We summarise other specific international reform options in response to our analysis, on private sector contributions, market-related lending and climate finance. We conclude by contrasting two alternative world views: (1) making international public finance a complement to private finance everywhere, and (2) deliberately focusing public stakes where the private sector is not present. We suggest a way forward

Subnational credit ratings : a comparative review

This paper surveys methodological issues in subnational credit ratings and highlights key challenges for developing countries. Subnational borrowing from capital markets has been on the rise owing to fiscal decentralization and demand for infrastructure investments. A prerequisite for accessing capital markets, subnational credit ratings have also emerged as a part of broader reform for fiscal sustainability. They facilitate a more transparent budgetary and financial management system. The global financial crisis makes subnational credit ratings more relevant, as they contribute to fiscal risk evaluations and fiscal adjustment. In addition to subnationals’ own credit strength, the creditworthiness of the sovereign and the intergovernmental fiscal system are among the most critical rating criteria. Implicit and contingent liabilities are integral to the rating process. Indirect debt instruments including off-balance-sheet financing create fiscal risks. The ongoing financial crisis has reinforced the rating focus on the management of liquidity, debt structure, and off-balance-sheet liabilities.Debt Markets,Banks&Banking Reform,,Bankruptcy and Resolution of Financial Distress,Access to Finance

Credit Risk Models for Managing Bank’s Agricultural Loan Portfolio

In this paper, we have developed a credit scoring model for agricultural loan portfolio of a large Public Sector Bank in India and suggest how such model would help the Bank to mitigate risk in Agricultural lending. The logistic model developed in this study reflects major risk characteristics of Indian agricultural sector, loans and borrowers and designed to be consistent with Basel II, including consideration given to forecasting accuracy and model applicability. In this study, we have shown how agricultural exposures are typically can be managed on a portfolio basis which will not only enable the bank to diversify the risk and optimize the profit in the business, but also will strengthen banker-borrower relationship and enables the bank to expand its reach to farmers because of transparency in loan decision making process.Credit Risk Modelling; Lending; Agriculture

Credit Risk Models for Managing Bank’s Agricultural Loan Portfolio

In this paper, we have developed a credit scoring model for agricultural loan portfolio of a large Public Sector Bank in India and suggest how such model would help the Bank to mitigate risk in Agricultural lending. The logistic model developed in this study reflects major risk characteristics of Indian agricultural sector, loans and borrowers and designed to be consistent with Basel II, including consideration given to forecasting accuracy and model applicability. In this study, we have shown how agricultural exposures are typically can be managed on a portfolio basis which will not only enable the bank to diversify the risk and optimize the profit in the business, but also will strengthen banker-borrower relationship and enables the bank to expand its reach to farmers because of transparency in loan decision making process.Credit Risk Modelling; Lending; Agriculture

Broadband infrastructure: The regulatory framework, market transparency and risk-sharing partnerships are the key factors

Around the globe countries are attempting to forge ahead with the expansion and upgrading of advanced communications networks. In most cases they are setting very ambitious goals with regard to technology and coverage. However, the specific cost structure for broadband projects results in the private-sector-driven, competitive market for network upgrading being primarily focused on densely populated urban areas. By contrast, major progress in rolling out broadband to unserved rural areas will not be made in the foreseeable future without state subsidies. Without having to steer a course towards the return of a monopoly in the telecommunications sector, which would have a detrimental long-term impact, the public sector can in this situation promote sustainable progress in telecommunication by merging projects, entering into risk-sharing partnerships, setting realistic broadband targets, providing essential market information to market participants, offering e-government digital services itself and, on top of that, further enhancing investment incentives with a regulatory framework in a competitive environment.broadband; telecommunications; Infrastructure; investment; financing

Consumer Expertise or Credit Risk? An empirical analysis of mortgage pricing

Loan mortgage interest rates are usually the result of a bank-customer negotiation process. Credit risk, consumer cross-buying potential, bundling, financial market competition and other features affecting the bargaining power of the parties could affect price. We argue that, since mortgage loan is a complex product, consumer expertise could be a relevant factor for mortgage pricing. Using data on mortgage loan prices for a sample of 1055 households for the year 2005 (Bank of Spain Survey of Household Finances, EFF-2005), and including credit risk, costs, potential capacity of the consumer to generate future business and bank competition variables, the regression results indicate that consumer expertise-related metrics are highly significant as predictors of mortgage loan prices. Other factors such as credit risk and consumer cross-buying potential do not have such a significant impact on mortgage prices. Our empirical results are affected by the credit conditions prior to the financial crisis and could shed some light on this issue.Financial support from MICINN (ECO2009-09120 and ECO 2010-20792) and Gobierno Vasco (IT-313-07 and IT 473-10) is gratefully acknowledged

Testing of the Model of Creating a Specialized Tourist Product for Post-COVID Time

Specialized tourists offer in the post covid time is an important reason in choosing the destination to travel to. A new perception of this offer puts new challenges to those who design such offers. Most specialized offers are the result of entrepreneurial initiative and intuition. Authors have dealt with the creation of such offers as an important destination concurrent factor in their own cross-border cooperation. Based on their findings, they have developed a model of creating specialized tourism products for post covid time by linking core, additional, and expanded contents with brand creation and the marketing strategy. In this paper authors continue their research by testing that model through two platforms: desk research of the latest cognitions related to the repercussions of Covid-19 on tourist mind, and on a convenient sample of connoisseurs. The testing of the model is connected with one case study in which authors cooperate in practice. The findings have been tested through a survey on a sample of experts (representatives of travel agencies) related to their experiences in sales for 2020 and 2021.They have also found important changes in tourist perception of specialized tourist product. The findings offer the answers as to why the basic contents of the specialized tourist offer is no longer sufficient, as well as a way for developing additional and expanded contents, on which the brand and brand management activities in the post corona period should be primarily based, i.e. on what to base the marketing strategies in the post covid time

Abstracts : Policy Research working paper series - numbers 2803 - 2856

This paper contains abstracts of Policy Research working paper series, numbers 2803 - 2856.Environmental Economics&Policies,Economic Theory&Research,Health Economics&Finance,Poverty Assessment,Banks&Banking Reform

The Contribution of Micro-enterprises to Economic Recovery and Poverty Alleviation in East Asia

The economic and social crisis that afflicted East Asia from mid 1997 produced the biggest setback to poverty reduction in the region for several decades, as well as aggravating social vulnerabilities. There were many dimensions to this, including: falling incomes; rising absolute poverty and malnutrition; declining public services; threats to educational and health status; increased pressure on women and children; and increased crime and violence. The objective of this paper is to analyse the potential contribution of one subset of small and medium sized enterprises, micro-enterprises and the role of micro-finance more generally, to regional economic recovery and poverty alleviation.micro-enterprises, micro-finance, economic recovery, poverty alleviation, East Asia

Default Predictors in Retail Credit Scoring: Evidence from Czech Banking Data

Credit to the private sector has risen rapidly in European emerging markets but its risk evaluation has been largely neglected. Using retail-loan banking data from the Czech Republic we construct two credit risk models based on logistic regression and Classification and Regression Trees. Both methods are comparably efficient and detect similar financial and socio-economic variables as the key determinants of default behavior. We also construct a model without the most important financial variable (amount of resources) that performs very well. This way we confirm significance of socio-demographic variables and link our results with specific issues characteristic to new EU members.credit scoring, discrimination analysis, banking sector, pattern recognition, retail loans, CART, European Union