Credit Quality in Developing Economies: Remittances to the Rescue?

Ebeke, Christian; Loko, Boileau; Viseth, Arina

doi:10.5089/9781498377911.001

Cited by 8 publications

(7 citation statements)

References 36 publications

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“…Based on these results, an increase in the remittancesto-GDP ratio for CAPDR by 1 percentage point would cause a drop in the NPL ratio by almost 0.5 percentage points. The magnitude of the latter effect is similar to that found by Ebeke et al (2014). Sufficient observations were not available for the Caribbean.…”

Section: The Positive Impact Of Remittances For Financial Sector Devesupporting

confidence: 80%

Migration and Remittances in Latin America and the Caribbean: Engines of Growth and Macroeconomic Stabilizers?

Beaton

Cerovic²,

Galdamez³

et al. 2017

IMF Working Papers

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Outward migration has been an important phenomenon for countries in Latin American and the Caribbean (LAC), particularly those in Central America and the Caribbean. This paper examines recent trends in outward migration from and remittances to LAC, as well as their costs and benefits. For the home country, the negative impact from emigration on labor resources and productivity seems to outweigh growth gains from remittances, notably for the Caribbean. However, given emigration, remittance flows play key financing and stabilizing roles in Central America and the Caribbean. They facilitate private consumption smoothing, support financial sector stability and fiscal revenues, and help reduce poverty and inequality, without strong evidence for harmful competitiveness effects through shifts in the real exchange rate. IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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Section: The Positive Impact Of Remittances For Financial Sector Devesupporting

confidence: 80%

Migration and Remittances in Latin America and the Caribbean: Engines of Growth and Macroeconomic Stabilizers?

Beaton

Cerovic²,

Galdamez³

et al. 2017

IMF Working Papers

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“…The GMM estimation technique indicated that the exchange rate, the private credit to GDP ratio and one period lagged NPLs were positively related to NPLs whereas, real GDP growth and the domestic stock price index had a negative impact on NPLs. Ebeke and Loko (2014) investigate the impact of remittances on NPLs for 141 developing countries from 2000 to 2011. The country sample included low-income and middle-income countries.…”

Section: Npls and Its Impact On Banksmentioning

confidence: 99%

The Impact of Foreign Direct Investment Inflows on Nonperforming Loans: The Case of UAE

Ozili¹,

Salman

Ali

2020

SSRN Journal

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“…But this Financial Intermediation has greatly been influenced by remittances from foreign countries. Therefore, remittances can be expected to pave the way for a sound development of a formal financial sector, critical for sustaining high economic growth, Ebeke et al [2]. However, Singer [3] believed that remit-tances tend to be stable and increase during periods of economic downturns.…”

Section: Background Of the Studymentioning

confidence: 99%

Non-parametric Approach in Modelling Effects of Remittances on Household Credit in Kenya

Lidiema¹,

Waititu²,

Mageto³

et al. 2018

AJAMS

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Generalized Additive Models for Location, Scale and Shape (GAMLSS)is a very flexible model class, extending the classical Generalized Additive Model (GAM) framework. Not only the mean, but all distribution parameters are regressed to the predictors. It is suitable for fitting linear or non-linear parametric models using the distributions. Artificial Neural Networks (ANN) are biologically inspired computer programs designed to simulate the way in which the human brain processes information. ANNs gather their knowledge by detecting the patterns and relationships in data and learn (or are trained) through experience. The main advantages of using ANN is that, it has the ability to implicitly detect complex nonlinear relationships between dependent and independent variables and also has ability to detect all possible interactions between predictor variables. Given all the dynamic nature of these two models are their outlined merits, it's important to test and see which of this model estimates parameters better and which of them a better model in forecasting financial data. To test and compare this models an application of effect remittances on household credit was be used. The study employed monthly data for period January 2005-December 2017 in Kenya. Our findings showed that mixed results where, GAMLSS performed better than ANN in estimation while ANN provided a better model in prediction than GAMLSS. Our results confirm that the surge in Remittances leads to increase credit uptake due to increased resource mobilization by financial institutions and also resource availability for loan repayment. The research recommends Banks and Financial institutions should also carry out their assessment using GAMLSS and ANN and come up with ways of tapping into remittances not only to boost their deposits but also increase their funds for issuing credit and hence increase interest income, and also boost financial inclusion in Kenya through increased consumer loans.

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Credit Quality in Developing Economies: Remittances to the Rescue?

Cited by 8 publications

References 36 publications

Migration and Remittances in Latin America and the Caribbean: Engines of Growth and Macroeconomic Stabilizers?

Migration and Remittances in Latin America and the Caribbean: Engines of Growth and Macroeconomic Stabilizers?

The Impact of Foreign Direct Investment Inflows on Nonperforming Loans: The Case of UAE

Non-parametric Approach in Modelling Effects of Remittances on Household Credit in Kenya

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