Bank lending to small business in India: Analyzing productivity and efficiency

Ramcharran, Harri

doi:10.1016/j.qref.2016.06.003

Cited by 19 publications

(20 citation statements)

References 45 publications

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“…While positive correlation was observed between bank credits and industrial production index in some of the studies (Kelly and Everett, 2004;Tawose, 2012;Manova, 2013;Toby and Peterside, 2014;Buono and Formai, 2014;Ebi and Emmanuel, 2014;Nnamocha and Eke, 2015;Sogules and Nkoro, 2016;John and Therhemba, 2016;Dörr et al, 2017;Ume et al, 2017;Vovchak, 2017;Ramcharran, 2017;Dimelis et al, 2017) negative correlation was observed in others (Larrain, 2006;Ma and Jalil, 2008;Izhar and Tariq, 2009;Toby and Peterside, 2014;Chisasa, 2014). In this research we have reached to a conclusion which supports both findings.…”

Section: Resultsmentioning

confidence: 94%

“…It has determined that banks applying core deposit financing provided firms with a lower credit rating than other loans during the crisis. Ramcharran (2017) indicated increasing productivity (output elasticity) of bank credit from 0.76 to 1.23 to small and medium size industries sector. The sector's efficiency improved from returns to scale of −0.89 to 0.607.…”

Section: Literaturementioning

confidence: 99%

“…In previous studies (e.g., Demetriades and Hussein, 1996;Levine, 2002;Aslan and Kucukaksoy, 2006;Ang, 2008;Jalil et al, 2010;Hasanov and Huseynov, 2013) it was stated that commercial bank loans to the private sector were a method to accelerate economic growth compared to other types of funding. Consequently, the principle independent variable is LCRD, the total commercial bank loans opened by the banking sector to the manufacturing industry sub-sectors (Kelly and Everett, 2004;Larrain, 2006;Izhar and Tariq, 2009;Tawose, 2012;Buono and Formai, 2014;Ebi and Emmanuel, 2014;Nnamocha and Eke, 2015;Adeola and Ikpesu, 2016;Vovchak, 2017;Ramcharran, 2017). In the literature, other independent variable, lending rate (LLR), which is used commonly in related studies (Ma and Jalil, 2008;Oni et.…”

Section: Model Specification and Data Estimation Proceduresmentioning

confidence: 99%

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A Micro Based Study on Bank Credit and Economic Growth: Manufacturing Sub-Sectors Analysis

Hacıevliyagil

Ekşi̇

2019

South East European Journal of Economics and Business

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The manufacturing sector plays an important role in the development of modern economy all over the world. Manufacturing -as a sub -sector of the industry-refers to the production of raw materials and other factors of production, such as labor, land and capital, or goods and services through the production process. With the multiplier effect, the share of the manufacturing industry sectors in the world value added is around 20%. Similarly, the sector also covers about 1 in 9 of the total employment in the world (UNIDO, 2017). As to put it, the share of the sector in GDP is also very high and crucial. For example, in Turkey, the average manufacturing industry share in total GDP is 40% but it varies yearly. While the shares of agriculture and service sectors in GDP were declining in years recently, the share of the industrial sector was increasing (BAT, 2017).To fully realize the importance of the industry in evaluating the above figures, the interaction between the other sectors of the industrial sector and other economic activities on the economy scale has been examined for many years. In the 1920s, British economist Allyn Young suggested that network-type connections between sectors of this type were the Nuri Hacievliyagil, Ibrahim Halil Eksi AbstractThis study examines the relationship between bank credits and performance and growth of manufacturing sub-sectors. Industrial Production Index was used for a different approach as a dependent variable. Indications of the autoregressive distributed lag (ARDL) bound co-integration test support the theory that bank credits are more effective than loan rates on industrial production of sub-sectors. Moreover, the increase in bank credit leads to the rise of industrial production in all the sub-sectors, except Machinery. According to the Toda Yomamato causality test results, there are different degrees of causalities in means of the importance of bank loans for industrial production. On the other hand, in all sub-sectors except machinery and chemical sub-sectors, causality relations were observed at different grades beginning from loan interest rates to industrial production. As a result, this study concludes with the evidence of supply leading hypothesis via the financial sector leads and causes economic growth.

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Section: Resultsmentioning

confidence: 94%

Section: Literaturementioning

confidence: 99%

Section: Model Specification and Data Estimation Proceduresmentioning

confidence: 99%

See 1 more Smart Citation

A Micro Based Study on Bank Credit and Economic Growth: Manufacturing Sub-Sectors Analysis

Hacıevliyagil

Ekşi̇

2019

South East European Journal of Economics and Business

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“…Malkangiri, the south Odisha location studied in this paper), but rather for the larger macro-market, consisting either of nearby large towns or perhaps even the larger national or global market, since access to a large local market (such as Jagdalpur or Bhubaneshwar that are farther away from Malkangiri) will in turn provide connectedness to larger selling arenas. Once larger investments make more sense, there will be a concomitant greater need for capital, ahead of production, leading to borrowing; more frequent cashflows, leading to savings and banking needs; and finally, a need to manage risk, leading to use of various insurance products (see [5], [6] for evidence of returns to scale in small businesses in India and contribution of bank lending to improvements in returns to scale).…”

Section: Introductionmentioning

confidence: 99%

Connectivity and Savings Propensity among Odisha Tribals

Viswanath¹

2020

Preprint

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Economic sustainability of rural areas is a concern given the increasing trend towards urbanization globally and in India. Self-reliant strategies, including increased savings and investment are more valuable in this regard than external interventions. This paper uses the results of a survey to examine the factors affecting saving in a rural part of Odisha populated primarily by tribals. Our tentative findings are that savings propensity is determined partly by the extent to which individuals feel connected to the broader economy, and partly by cultural factors. One implication of these findings is that connecting rural areas to other, possibly urban, locations could elicit greater saving and this could lead to greater development, employment possibilities, economic betterment and all the consequent social welfare implications. This paper relates savings propensity to new sociological population characteristics, such as perceived connectivity and food consumption patterns, and hence provides hitherto unexplored clues for policy initiatives to increase savings.

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“…In relation to the existing literature, there is an extensive of literature studying loan supply behavior of commercial banks from various countries, such as in Jordanian (Elletter & Yaseen, 2017), in China (Chi & Li, 2017) in Kenya (Njeru, Mohhamed & Wachira, 2017), in India (Ramcharran, 2017) and in Croatia (Škalamera-Alilović & Štambuk, 2017). In Indonesia, researchers related to individual bank and bank level are also frequently conducted primarily instated and private commercial banks.…”

mentioning

confidence: 99%