Sumerianz Journal of Economics and Finance
Online ISSN: 2617-6947
Print ISSN: 2617-7641
Quarterly Published (4 Issues Per Year)
Journal Website: https://www.sumerianz.com/?ic=journal-home&journal=26Archive
Volume 3 Issue 10 (2020)
Credit Risk Management Evaluation and Bank Management Effectiveness: 1995 – 2015 Dimensionality
Authors : John Nkeobuna Nnah Ugoani
DOI : doi.org/10.47752/sjef.310.178.188
Abstract:Credit risk management is central to the success or failure of a banking institution because banks earn the greatest quantum of their interest income from interest on loans which represents a critical component of a bank’s profitability. Therefore, any carelessness with regard to credit risk management automatically results to creating huge nonperforming loans which often prepares the grounds for bank distress or failure. In the 1990s and specifically in 1995, 50 percent of 120 banks became technically distressed, as they were characterized by poor management and weak liquidity ratio. For example, in 1995, the ratio of nonperforming loans to total loans was about 33 percent compared to about 5 percent in 2015, and the average liquidity ratio of banks in 1995 was 0.49, against 58.18 in 2015. Also the loans, to deposit ratio in 1995 was 58.4 and 73.21 in 2015, while the number of banks with average liquidity ratio of less than 30 percent was 50 in 1995 against 1 in 2015. Distress persisted in the Nigerian banking system in the 1990s with dwindling profitability and the erosion of shareholders’ equity. In 1995, the adjusted shareholders funds was – N8791.1million against N3,240 billion in 2015, while the capital to total risk weighted asset ratio was about 67.18 percent in 1995 and only about 17.66 percent in 2015. In 1995, the ratio of nonperforming loans to shareholders’ funds was about 496 percent against about 13 percent in 2015. These major performance indicators showed that there was improved credit risk management and bank management effectiveness after 1995 until 2015. The expo-facto research design was employed for the study and the result showed strong positive relationship between credit risk evaluation management and bank management effectiveness. The study was not exhaustive, and further research could examine the relationship between regulatory efficiency and the performance of deposit money banks in Nigeria. The board of directors of banks should always take measures to avoid lending arrangements over and above the repayment capacity of borrowers to reduce the creation of nonperforming loans.
Pages: 178-188
Assessment of Relationship Among Regional Economic Development Policy, Urban Development Policy and Public Policy
Authors : Asfika Sultana ; Md Harun Or Rashid ; Shahara Akter Eva ; Arifin Sultana
DOI : doi.org/10.47752/sjef.310.171.177
Abstract:This study mainly investigates the problems of public management from the two interdisciplinary approaches of regional economic development policy and urban development policy. A qualitative desk review approach has been adopted to contribute the debate and reach the objectives of the study. This study reveals that there is an integral relationship among regional economic development policy, urban development policy and public policy. It also introduces the main essence of regional economic development policy, the analysis of the research difficulties and causes, expounds the relationship and enlightenment between regional economic development policy research perspectives, approach and research methods of public management. It also highlights the relationship and enlightenment between the way and research method and the theory and practice of public management. This paper also analyzes the main similarity and differences between regional economic development policy and urban development policy and forward recommendations based on the findings.
Pages: 171-177
Traders Perception and Awareness on Financial Derivatives in Indian Stock Market
Authors : Dr. N. Selvaraj
DOI : doi.org/10.47752/sjef.310.160.170
Abstract:The Government of India has introduced Economic Policy in 1991 to implement structural reforms for reduce the imbalances. In India, Traders want maximum gain with minimum risk, so is the case with derivatives. Derivatives are among the forefront of the innovations in the financial markets and aim to increase returns and reduce risk. A derivative is a financial product which has been derived from another financial product or commodity. The derivatives do not have independent existence without underlying product and market. Derivatives are contracts which are written between two parties for easily marketable assets. Derivatives are gaining importance due to increased volatility in capital and foreign currency markets. RBI finds ways for healthy development of market and takes steps to popularise the use of derivative instruments, but still awareness about the derivative instruments and its uses are quite low. Hence, it is necessary to find out the level of awareness among investing public and if found low, how to create adequate awareness to encourage the use of derivative products as hedge tools. This study can be used by the regulating authorities and broker houses to increase awareness among the traders about derivatives. One should invest in secured and risk-free investments rather than high-risk, highly profitable investments. Tracking the market environment better with sound knowledge about a particular stock would result in better returns. Since many of the entities in this study are independent of each other, there is need to analyse on a buying decision specifically for respective stocks. People with less experience can also be high profit makers when decisions are based on intricate fundamental and technical analyses.
Pages: 160-170
The Role of Cooperatives, Remittances, and Infrastructure in Export Performance of Nepal: ARDL Approach of Cointegration
Authors : Ramesh C. Paudel ; Chakrapani Acharya ; Resham Thapa-Parajuli
DOI : doi.org/10.47752/sjef.310.151.159
Abstract:Cooperatives, remittances, and foreign direct investment (FDI) are crucial source of funds required for better entrepreneurships, which combinedly along with the quality of infrastructure can contribute to enhance the supply side factors of the export performance. Due to the well perceived role of cooperatives, Nepal’s constitution 2015 mentions this sector as one of the three pillars of the national economy while around 30 percent of Nepal’s GDP comes from remittances. As the country lacks the domestic sources for investment, FDI has become an indispensable part of the development sources of the developing countries in the recent decades. This paper analyzes the role of cooperatives, remittances, FDI and infrastructure in export performance of Nepal using the Autoregressive Distributive Lag (ARDL) approach of cointegration as suggested by the properties of the time series data for the period of 26 years from 1993 to 2018. The major finding shows that the cooperatives have not contributed to export performance as expected, however the role is positive. The remittances have a strong negative role on export performance, which is largely impacted by the number and quality of the infrastructure. The role of FDI is also negative and might be due to insufficient volume to contribute substantially. This fact seeks the urgent attention from the policy makers to make the country more investment friendly.
Pages: 151-159