Most contributions in the fast‐growing literature on microfinance seem to agree that all the stakeholders (borrowers, lenders, communities, government and regulators, interested third parties) should become fully aware of the potentiality of the joint value creation achieved through cooperation.
Financial well-being has recently gained prominence in the academic and public policy domains. A report by the Consumer Financial Protection Bureau (CFPB, 2015) emphasized that financial well-being must be the objective of financial literacy (Netemeyer, Warmath, Fernandes, & Lynch, 2017). The significance of financial well-being is not limited to personal financial success; it also promotes the work productivity and overall well-being of individuals; and the development of a healthy economy, overall (Diener, 2000; Netemeyer et al., 2017). Conversely, low levels of financial well-being create a vicious cycle of stress, thus, further hampering personal and societal growth
Artificial Intelligence (AI) is creating a rush of opportunities in the financial sector, but financial organizations need to be aware of the risks inherent in the use of this technology. Financial organizations are integrating AI in their operations: in-house, outsourced, or ecosystem-based. The growth of AI-based fintech firms has encouraged several mergers and acquisitions among financial service providers and wealth managers as they grapple with volatility, uncertainty, complexity, and ambiguity. AI's unique promise of combined cost reduction and increased differentiation makes it generally attractive across the board. However, perhaps other than fraud detection, these benefits depend on the scale of an organization. Risk arises from nonrepresentative data, bias inherent in representative data, choice of algorithms, and human decisions, based on their AI interpretations (and whether humans are involved at all once AI has been unleashed). Risk reduction requires a vigilant division of labour between AI and humans for the foreseeable future.
he in ech re olu on ca tures the simultaneous a ac o a lar e number o technolo ies, notably mobile tele hones and bloc chain, which are usherin in e ciency or outreach to mulle niche mar ets. he use o mobile tele hone technolo y has e anded Internet reach to the e cluded, created ossibili es or business where ban s were not historically resent and is oten ally disru e. he bloc chain technolo y threatens to be e en more disru e as it may ull the car et rom under the monetary system as well as the ro erty ri hts as we now them today. he roli era on o actors and inno ators has created a con used landsca e resul n in di erent ossible scenarios, where ban s may ree e, ht, orm alliances with challen ers, or be orced into i ht by the i ech. rr s c r ind shta, ur undy School o usiness,
Microfinance institutions that use credit scoring increase the productivity of their loan officers, thus leading to an increase in the number of borrowers, higher growth in the number of loans, and expanding financial inclusion and developmental opportunities.
᭹The purpose of this paper is to improve clarity and fi nancial analysis for calculating a fi rm's sustainable growth rate, a useful concept for fi rms growing very fast as well as those in fi nancial distress.
᭹The paper is based on a review of literature and textbooks concerning the concept of sustainable growth rate.
᭹The sustainable growth rate is the rate at which a company can grow without creating a cash fl ow problem, a concept developed by Robert C. Higgins in 1977 andin 1981 extended by him for continuous time frameworks. For discrete time frameworks, his textbook describes sustainable growth rates as a product of four ratios: the profi t margin, the retention ratio, the asset turnover and the fi nancial leverage ratio, of which the latter divides closing total assets by opening equity. ᭹ I agree with the components but suggest a slight modifi cation. The leverage ratio should use the fi gures of the same date: it should use opening total assets divided by opening equity. Mathematically, this change would require modifying the asset turnover ratio to make it sales divided by opening total assets, instead of dividing by closing total assets as used by Higgins. This modifi cation makes more intuitive sense since sales are created by assets rather than the other way round, which is far more indirect and remote and because of the timing problem.
᭹The paper provides a simple illustration. ᭹ This modifi cation would also require précising that the sustainable growth rate of fi rms in fi nancial distress should use the asset turnover ratio using opening assets.
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