CREDIT RISK

Credit risk or default risk involves inability or unwillingness of a customer or counterparty to meet commitments in relation to lending, trading, hedging, settlement and other financial transactions. The Credit Risk is generally made up of transaction risk or default risk and portfolio risk. The portfolio risk in turn comprises intrinsic and concentration risk. The credit risk of a bank’s portfolio depends on both external and internal factors. The external factors are the state of the economy, wide swings in commodity/equity prices, foreign exchange rates and interest rates, trade restrictions, economic sanctions, Government policies, etc. The internal factors are deficiencies in loan policies/administration, absence of prudential credit concentration limits, inadequately defined lending limits for Loan Officers/Credit Committees, deficiencies in appraisal of borrowers’ financial position, excessive dependence on collaterals and inadequate risk pricing, absence of loan review mechanism and post sanction surveillance, etc. This paper points out the measurement, hedging and monitoring of the credit risk

Determinants of organic food purchase intention: the moderating role of health consciousness

Purpose – The purpose of this study is to understand the effects of self-risk perception and health consciousness on the intention to purchase organic food. The study also explored external factors, such as social networking, culture and their impact on attitude, self-risk perception and purchasing organic food. Design/methodology/approach – This study uses a quantitative research method to collect data from New Zealand and Fiji (N5701). The data analysis used the partial least squares path modeling technique (PLS-PM) to test the proposed model. Findings – The empirical results revealed that self-risk perception positively influenced organic food intention. The results show that the health consciousness level strengthens the relationship between self-risk perception, beliefs, values and purchase intention. The health consciousness level dampens the relationship between social networking and purchase intention. Research limitations/implications – The findings of this study provide valuable insights into the guidance and promotion of Fijian and New Zealand’s organic food industry. This study enables marketers to develop health-related promotional tactics to stimulate organic food sales. It gauges organic food promoters to use social media-oriented consumer networking to spread health awareness swiftly. Originality/value – This comprehensive study extends the literature by scrutinizing the profundity of selfrisk perception and health consciousness in influencing and explaining consumers’ purchase intentions. Aside from ample growth in the study of organic food purchase intention, which commonly replicates simple relationships, this study ascertains deeper meaning and new relationships to understand the moderating role of health consciousness levels in organic food studies, expanding the theory of planned behavior

Factors forming consumer willingness to pay a premium for free - range eggs

Purpose Little is known about the external stimuli, which trigger a change in a consumer's cognitive and affective state and lead to a consumer's willingness to pay a premium price (WTPPP) behavioural response. This study aims to close this knowledge gap by providing insight into how a unique combination of antecedents affects consumer attitude toward purchasing free-range eggs and leads to a behavioural response, which is measured by consumer WTPPP for free-range eggs. Design/methodology/approach An online questionnaire was developed, with data collected from 392 Australian consumers. This study employs confirmatory factor analysis (CFA) to examine the measurement model before testing the hypothesised relationships using covariance-based structural equation modelling (CB-SEM). Findings The study reveals that the tested customer perceived value (CPV) dimensions, animal welfare and source credibility are positive stimuli of consumer attitude towards purchasing free-range eggs, which subsequently promotes consumer WTPPP for free-range eggs. Research limitations/implications Findings drawn from Australian consumers may not be generalisable to consumers from disparate contexts, and stimuli beyond those tested may influence consumer attitude and WTPPP. Originality/value This is one of the first studies to use the stimulus–organism–response (SOR) theory to investigate and contribute to extant knowledge and understanding of consumer behaviour relating to free-range eggs and specifically of consumer attitude towards purchasing and WTPPP for free-range eggs. This study offers practical implications for free-range egg farmers, retailers and policymakers