SUMM

Sr. No. Author

Bruce Murray, R. Keith Leonard,OED, ADB 1

Year
2007 August

Region/Country
Sri Lanka

Tor Jacobson *, Kasper Roszbach 2 Stephan Barisitz; Zeljko Bogetic; Zuzana Fungaova and Laura Solanko; Peter

12 January 2001;accepted 10 Sweden September 2001

2009 SUERF, Vienna

Russia

Rosemary Atieno 4

2001 November

Nairobi

Somoye, Russell Olukayode Christopher

2009

Nigeria

Alexandra Fiorillo

2006 September

Uganda

Raphael W. Bostic, Kathleen C. Engel, Patricia A. McCoy, Anthony 2008 February Pennington-Cross and Susan M. Wachter 7 JOHN WEISS 8 9 10 2001 February

USA

Asia & Pacific

SUMMARY ON THE RESEARCH PAPERS ON THE IMPACT OF L

Title
Evaluation of Policy-Based Lending in Sri Lanka

Source
Operations Evaluation Department, Thematic Paper, ADB

Variables
political economy of decision making, political structure

Bank lending policy, credit scoring and value-at-risk

Journal of Banking & Finance 27 (2003) 615633

balance outstanding on the card, customer, Consumer interest

CURRENT TRENDS IN THE SUERF The European Money and RUSSIAN FINANCIAL SYSTEM Finance Forum Vienna 2009 Formal and informal institutions lending policies and access to AERC Research Paper 111 African credit by small-scale enterprises Economic Research Consortium, Nairobi in Kenya: An empirical assessment

reforms, oil price, home-grown banking scare

use of credit

The Impact of Macroeconomic The volume of loans granted, Instability on the Banking Sector Journal of Money, Investment and Banking size, deposit base, liquidity, credit Lending Behaviour in Nigeria EuroJournals Publishing, Inc. 2009 policy

The Effects of Wholesale Lending to SACCOs.

Financial Sector Deepening Project Uganda (FSDU)

governance, portfolios

The Effects of Wholesale Lending to SACCOs.

Joint Center for Housing Studies Harvard University

applicants, coverage

Assessing the Poverty Impact of Development and Project Planning Centre, policy change that enhances Policy and Sector-based University of Bradford. Asia and Pacific economic growth and poverty Lending Forum on Poverty

HE IMPACT OF LENDING POLICIES ON PEOPLE AND ECONOMY

Idea
(i) review the context of policy-based lending operations of the Asian Development Bank (ADB) in Sri Lanka, (ii) analyze the extent of the countrys compliance with policy measures that it had agreed to, (iii) review key achievements of policy-based programs, and (iv) identify lessons

to estimate an unbiased scoring model using the bivariate probit approach.

summarizes the very favorable evolution of the macro-structural background, including the oil price, during almost the entire observation period, which enabled the authorities to accumulate generous foreign currency reserves that led to low FDI and increased lending growth whch resulted in greater cas inflows the role of institutional lending policies among formal and informal credit institutions in determining the access of small-scale enterprises to credit in Kenya.

investigating the impact of macroeconomic instability on banking sector lending behaviour

1) review the experiences of Ugandan SACCOs with wholesale lending; 2) determine the factors that nfluence whether an external loan will have a positive or negative impact; and 3) give practical advice and provide guidelines for wholesale lenders and potential borrowers.

created a legal index by engaging in a careful textual review of every anti-predatory lending statute throughout the country that was in force in 2004 or 2005. this paper also measures the effect of state anti-predatory lending laws on the flow of subprime credit and seen the extent of coverage, restrictions, and enforcement embodied in a states legal framework is associated with significant changes in the probability that a subprime application is rejected and a subprime loan is originated

the implications of the current shift by international agencies to lending in support of broad policy change and sectorwide interventions rather than specific projects, in terms of impact of such loans on poverty reduction

OMY
Limitations Findings
Policy-based lending in Sri Lanka requires careful consideration of the reform environment, Policy reform is an art of making reform popular through civil participation and win-win outcomes for stakeholders. marginal changes in a default-risk-based acceptance rule would shift the size of the bank s loan portfolio,its VaR exposure and average credit losses ^ lending institution that has neither minimized credit risk nor maximized the rate of return, but practice a simple decision-rule scheme. it gives the idea of how the sluggish reforms can be avoided and how the cash inflow be accelerated and if the lending policy is revised crisis might be ignored How to improve the established network of formal credit institutions, creditworthiness of small improving lending terms and conditions in favour of smallscale enterprises that add up scale enterprises would provide an important avenue for to be a major contributor in facilitating their access to credit. the economy while banks should pay adequate attention to the consequences of their firm specific characteristics in their lending activities both in the short-run and long-run, their worries about macroeconomic instability should be limited to the long-run consequences on their lending behaviour

Future Research
Policy conditions must be adaptable to changed circumstances. calculating VaR can enable financial institutions to evaluate alternative lending policies on the basis of their implied credit risks and loss rates

bank lending has a long-run relationship with macroeconomic instability

* External funds will not help a weak SACCO become strong * Wholesale loans to a SACCO can impact the savings culture of the institution positively or negatively * SACCOs can be very successful without accessing external funds * Efficient capacity building is crucial * Monitoring and reporting requirements imposed by wholesale lenders, in particular requirements to age and provision the portfolio, can lead to improvements in management practices of great value to the SACCO. * Many SACCO members were negatively influenced by politicians who presented the external funding as a government grant.

Expanded coverage tends to increase access to subprime credit, as do increased enforcement mechanisms. Stronger restrictions have the opposite effect, likely by limiting the types of subprime loan products that a lender can offer. The results clearly indicate an important role for antipredatory lending laws and highlight the importance of disaggregating the laws to focus on the effects of their different components. the policy changes in the lending of the banks can really do a massive difference in the elimination or atleast reeduction in the poverty and be an assist in the economic growth

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