Drivers of solvency risk – Are microfinance institutions different?

Schulte, Markus; Winkler, Adalbert

doi:10.1016/j.jbankfin.2019.07.009

Cited by 42 publications

(26 citation statements)

References 63 publications

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“…For robustness, we present results employing several measures of bank risk and bank value commonly used in the empirical literature. Bank risk is measured by the z score of each bank (e.g., Altunbaş et al,2017; Laeven & Levine,2009), the CDS spread (e.g., Drago et al,2019; Drago, Di Tommaso, & Thornton,2017), and the ratio of banks nonperforming loans to total loans (e.g., Schulte & Winkler,2019). Bank value is measured by Tobin's q , (e.g., Bolton,2013; Gompers, Ishii, & Metrick,2003), the book value of capital (e.g., Abuzayed, Molyneux, & Al‐Fayoumi,2009) and, indirectly, from banks' equity price (e.g., Khanna & Sonti,2004).…”

Section: Models Methodology and Datamentioning

confidence: 99%

Do ESG scores effect bank risk taking and value? Evidence from European banks

Tommaso

Thornton

2020

Corp Soc Responsibility Env

196

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We examine whether environmental, social and governance (ESG) scores of European banks impact on their risk‐taking behavior and on bank value. We find that high ESG scores are associated with a modest reduction in risk‐taking for banks that are high or low risk‐takers, and that the impact is conditional on executive board characteristics. These findings are consistent with the “stakeholder” view of ESG activities. However, high ESG scores are also associated with a reduction in bank value consistent with the “overinvestment” view of ESG whereby scare resources are diverted from investment. The decline in bank value occurs notwithstanding a positive indirect link between ESG scores and bank value through their impact on risk taking. We conclude that there is a trade‐off between reducing bank risk‐taking and a more stable financial system on the one hand and bank value on the other.

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Section: Models Methodology and Datamentioning

confidence: 99%

Do ESG scores effect bank risk taking and value? Evidence from European banks

Tommaso

Thornton

2020

Corp Soc Responsibility Env

196

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“…Initially, MFIs rely primarily on donors, subsidies from charitable or governmental agencies, and concessional funds to keep afloat ( Assefa et al, 2013 ). With the rapid development of commercialization, MFIs are allowed to take deposits from the public and to operate like “traditional bank-like MFIs” ( Schulte & Winkler, 2019 ). In addition to donation and deposits, MFIs have recently obtained private funding from commercial investors, like commercial banks, pension funds, insurance companies, private equity firms, etc., who consider MFIs as a socially responsible investment ( Postelnicu & Hermes, 2018 ).…”

Section: Resultsmentioning

confidence: 99%

The impact of COVID-19 on the efficiency of microfinance institutions

Zheng

Zhang

2021

International Review of Economics & Finance

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“…During the same period, market structure kept changing as many NGO's got converted into Profit making NBFCs. Few studies state that the Solvency tested through Z score, highlights that the risks faced by MFIs is like banks (Schulte & Winkler, 2019). The Solvency scores had impact in return on assets; while non-performing loans is a better measure to analyse the solvency especially for microfinance institutions (Arcalean et al, 2007;Chakravarty & Pylypiv, 2015;Janardhanan & Uma, 2020).…”

Section: Need For the Study And Objectivementioning

confidence: 99%

Solvency and Survival of Microfinance Institutions: An Indian Scenario-Policy Implications to Improve Endurance

Sangeetha¹,

Chitra²

2021

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In India, more than 450 million people are outside banking orbit. Many economically deprived communities borrow money from money lenders who charged them to an extent of 115% interest. Microfinance was a strong tool to rescue the poor from Ponzi Schemes. Microfinance industry thrived well in India. It recorded huge growth in South India than North India. The Microfinance crisis broke during the year 2010 in Andhra Pradesh. A bill enacted in Andhra Pradesh made the situation still worse. The repayment rate of the Micro finance clients dropped from 95% (2010) to 1% (2012). This made the survival of the Microfinance Institutions (MFIs) questionable. The paper aims at exploring the solvency and survival positions of the Private & Public NBFC MFIs. Based on the Altman’s Z revised score model (applicable for financial institutions) and Survival analysis, the results reflect that Private NBFC MFIs are solvent and had better survival than Public NBFC MFIs. It aims at understanding the factors discriminating the solvent and insolvent Microfinance Institutions. JEL Classification Codes: G20, G21, G23, G28, G33.

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Drivers of solvency risk – Are microfinance institutions different?

Cited by 42 publications

References 63 publications

Do ESG scores effect bank risk taking and value? Evidence from European banks

Do ESG scores effect bank risk taking and value? Evidence from European banks

The impact of COVID-19 on the efficiency of microfinance institutions

Solvency and Survival of Microfinance Institutions: An Indian Scenario-Policy Implications to Improve Endurance

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