Partial credit guarantees and SMEs financing

Boschi, Melisso; Girardi, Alessandro; Ventura, Marco

doi:10.1016/j.jfs.2014.09.007

Cited by 52 publications

(28 citation statements)

References 42 publications

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“…Furthermore, such a principle also implemented in the matter of credit application requirement, maximum credit limit, and the settlement of the non-performing loan. Lubis & Rachmina (2011), Pato (2013, Boschi et al, (2017), and Cowan et al, (2015) mentioned that collateral value even becomes an important consideration when deciding on credit approval. For banks, collateral value will reduce the default risk from debtors, because banks can sell their assets to cover the bad debts.…”

Section: Resultsmentioning

confidence: 99%

Critical Factors That Determine Credit Approval to Micro, Small, and Medium Enterprises (MSME) IN BEKASI

2019

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Many business owners attempt to apply for bank credit, but not all of them are approved. This study aims to reveal the factors determining credit approval to Micro, Small, and Medium Enterprises (MSME). The variables used in this study are the owner's capital, company establishment, collateral value, credit amount, owner's age, and good relationship with the bank. In this study, the logit model used as a technique of analysis, in which there is only one dependent variable in the form of dummy along with the other six independent variables. The statistical test reveals that simultaneously all independent variables have significant effects on credit approval. Partially, only the owner's capital and good relationships with the bank do affect the approval. Therefore, business owners should pay more attention to their amount of capital and interrelation with the bank when applying for bank credit.Abstrak. Banyak pemilik usaha berupaya untuk mengajukan kredit kepada bank, namun tidak semua pengajuan tersebut disetujui. Penelitian ini berusaha untuk mengungkapkan faktor-faktor yang menentukan persetujuan pembeian kredit kepada Usaha Mikro, Kecil, dan Menengah (UMKM). Variabel-variabel yang digunakan adalah modal pemilik, lama berdirinya usaha, nilai jaminan, jumlah kredit, usia pemilik, dan hubungan baik dengan pihak bank. Di dalam penelitian ini, digunakan model logit yang mana hanya terdapat satu variabel dependen dalam bentuk dummy bersama dengan enam variabel independen lainnya. Hasil pengujian statistik mengungkapkan bahwa secara simultan seluruh variabel independen memiliki pengaruh yang signifikan terhadap persetujuan pemberian kredit. Secara parsial hanyalah modal pemilik dan hubungan baik dengan pihak bank yang menentukan persetujuan pemberian kredit tersebut. Oleh karena itu, para pemilik usaha perlu memberikan perhatian lebih kepada besarnya modal yang dimiliki dan hubungan baik yang terjalin dengan pihak bank ketika mengajukan kredit kepada bank.

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Section: Resultsmentioning

confidence: 99%

Critical Factors That Determine Credit Approval to Micro, Small, and Medium Enterprises (MSME) IN BEKASI

2019

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“…and to the debt capital market (bank debt, structured finance, syndicated loans, etc. ), as highlighted by various studies [19][20][21][22][23]. Generally speaking, for the financing of investments in property, plants and equipment, the firms of the sector use, in addition to equity capital (E), long-term bank loans and real estate leasing articulated generally in a technical form of mortgages with a guarantee on real estate property and, less frequently, articulated in an unsecured form; in this last case, durations are reduced and often collateral security with a pledge or guarantee of signature is requested and often given by members or credit guarantee consortia.…”

Section: Overview Of Firm Characteristics In the Tomato Sectormentioning

confidence: 93%

Analysis of the Risk of Bankruptcy of Tomato Processing Companies Operating in the Interregional Interprofessional Organization “OI Pomodoro da Industria Nord Italia”

Iotti¹,

Bonazzi²

2018

Preprint

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Abstract:The processed tomato is one of Italy's major food products and today characterizes many Italian Regions, in northern and southern Italy. This is the case even though the firms in the industry have encountered difficulties in recent years, due to an increase in the cost of raw materials. Furthermore, tomato processing firms are often characterized by significant investment in fixed assets and working capital, with an ensuing increase in equity or debt financing, and with an ensuing increase of the risk of bankruptcy, as has happened to many firms in the sector in recent years. The aim of the research is then to analyze the risk of bankruptcy of tomato processing companies by applying financial ratios to evaluate the sustainability of the management cycle. To achieve this goal, the research considers the annual data of a sample of 17 tomato processing firms operating in the Inter Regional Interprofessional Organization "OI Pomodoro da Industria Nord Italia"; firms' data are divided into still-active (not-distressed) and failed (distressed) firms, with the aim of analyzing the differences between the financial data and management practices of the two firm groups. The company data suggest that larger firms, with an adequate financial structure, have been able to withstand the tomato market crisis in recent years, whereas distressed firms are on average smaller and suffer from a higher recourse to debt capital with lower profit margins than not-distressed firms. The research could then be applied by entrepreneurs, managers, bankers and public operators to define good management practices that should be achieved and measured with financial ratios, even as a means of reducing the risk of distress for firms operating in the tomato sector.

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“…Cressy and Olofsson [16], Berger and Udell [17], Meyer [18] and Bernanke and Blinder [19] showed that the main method to solve the cash constraint problem is still firms to ask for a loan from banks. However, many studies [20][21][22] have shown that shortcomings of enterprises, information asymmetries and imperfect financial policies may cause financing difficulties. You and Wang [23], Zambaldi et al [24], Bădulescu and Bădulescu [25] described problems, reasons, and solutions for SMEs to solve their financing difficulties.…”

Section: Review Of Literaturementioning

confidence: 99%

Optimal Financing Decisions of Two Cash-Constrained Supply Chains with Complementary Products

Chen

Xin

2016

Sustainability

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Abstract:In recent years; financing difficulties have been obsessed small and medium enterprises (SMEs); especially emerging SMEs. Inter-members' joint financing within a supply chain is one of solutions for SMEs. How about members' joint financing of inter-supply chains? In order to answer the question, we firstly employ the Stackelberg game to propose three kinds of financing decision models of two cash-constrained supply chains with complementary products. Secondly, we analyze qualitatively these models and find the joint financing decision of the two supply chains is the most optimal one. Lastly, we conduct some numerical simulations not only to illustrate above results but also to find that the larger are cross-price sensitivity coefficients; the higher is the motivation for participants to make joint financing decisions; and the more are profits for them to gain.

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Partial credit guarantees and SMEs financing

Cited by 52 publications

References 42 publications

Critical Factors That Determine Credit Approval to Micro, Small, and Medium Enterprises (MSME) IN BEKASI

Critical Factors That Determine Credit Approval to Micro, Small, and Medium Enterprises (MSME) IN BEKASI

Analysis of the Risk of Bankruptcy of Tomato Processing Companies Operating in the Interregional Interprofessional Organization “OI Pomodoro da Industria Nord Italia”

Optimal Financing Decisions of Two Cash-Constrained Supply Chains with Complementary Products

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