Falhas de mercado, como imperfeições informacionais e dificuldades de fazer com que os contratos sejam cumpridos, podem levar arranjos financeiros alternativos, como cooperativas de crédito, a permitir o acesso a crédito que de outra forma não seria possível. Tal vantagem depende de características locais como a confiança e informação compartilhada no município (que pode ser chamado de capital social). Esta dissertação realiza uma avaliação empírica decorrente da ideia expressa acima. Nela testa-se se o capital social - medido por variáveis como votos brancos e nulos em eleições para vereador, homogeneidade de renda, religião e raça - impacta a quantidade de cooperativas de crédito existentes nos municípios brasileiros de 2000 a 2008. Os resultados corroboram a tese exposta indicando que o capital social está positivamente relacionado com o número de cooperativas no Brasil.Todavia, os resultados dependem de quais variáveis são utilizadas como medidas de capital social. É possível que algumas variáveis de homogeneidade e imigração utilizadas não sejam boas medidas de capital social. Ademais, também há indícios que essa relação positiva não é fruto apenas de uma relação positiva com o crédito em geral. / Market failures such as informational imperfections and problems with enforcement may lead alternative financial arrangements, such as credit unions, to have superior results compared to the traditional banking system. This advantage depends on local characteristics such as trust and shared information, or social capital, in the municipality. Thisdissertation conducts an empirical evaluation due to the idea expressed above. It tests if the social capital, measured by valid votes in elections for city council, homogeneity of income, religion and race, impacts the amount of credit unions in Brazilian municipalities from 2000 to 2008. The results confirm the thesis exposed above indicating that social capital is positively related to the number of credit unions in Brazil. However, the results depend on which variables are used to measure the social capital existing. It is possible that some variables used related to homogeneity and immigration are not good measures of social capital. Moreover, there is also evidence that this positive association is not only the result of a positive relationship with credit in general.

This dissertation investigates, in general, the debt enforcement procedures contained in the National Credit Act. It provides information on the purpose of consumer credit legislation and the South African credit industry to indicate the necessity for proper regulation. It further identifies some areas that had been problematic in the debt enforcement process, but which were clarified by recent court decisions. Specific aspects related to current problems experienced in the interpretation of the Act with reference to debt enforcement are identified, and the opinions of various authors, as well as the researcher’s own opinion, are provided in order to find solutions to such problems. It is clear from the provisions of section 3 of the Act and the discussions throughout this dissertation that the legislature regarded the protection of the consumers as its first priority. A delicate balance must, however, be maintained to protect the consumers interests, and those of the credit provider, since it would inevitably influence the South African economy if the balance were to favour a particular party’s interests. Recent decisions by the courts indicate that the Act is not all-inclusive and that the common law will be used to provide guidance or to take precedence where the Act does not make provision for certain circumstances or debt enforcement procedures. This dissertation further illustrates that the legislature needs to refine the provisions of debt enforcement contained in the Act, to clear ambiguities and create legal certainty. For as long as there are ambiguities in the Act, both the consumer and the credit provider will be disadvantaged, since in that case, a balance between the rights and the obligations of the consumer and those of the credit provider does not exist. Despite the fact that these ambiguities will eventually be clarified by interpretations provided by the courts, the Act, currently fails in its purpose to a certain extent, since clear and precise legislation is required. However, expensive and time-consuming interpretations are now required from the courts to resolve practical problems and to clear ambiguities. / Dissertation (LLM)--University of Pretoria, 2013. / Private Law / unrestricted

The thesis studies the factors which underpin the allocation of credit ratings by the two major credit rating agencies (CRAs) namely Moody’s and S&P. CRAs make regular headlines, and their rating’s judgements are closely followed and debated by the financial community. Indeed, criticism of these agencies emerged, both in this community and the popular press, following the 2007-2008 financial crisis. This thesis examines several aspects of the allocation of credit ratings by the major agencies, particularly in relation to (i) their revealed “loss function” preference structure, (ii) the determinants underpinning the allocation of credit ratings and (iii) the reasons determining the circumstances when the two agencies appear to differ in their opinions, and we witness a split credit rating allocation. The first essay empirically estimates the loss function preferences of two agencies by analyzing instances of split credit ratings assigned to corporate issuers. Our dataset utilises a time series of nineteen years (1991-2009) of historical credit ratings data from corporate issuers. The methodology consists of estimating rating judgment differences by deducting the rating implied probability of default from the estimated market implied probability of default. Then, utilising judgment differences, we adapt the GMM estimation following Elliott et al. (2005), to extract the loss function preferences of the two agencies. The estimated preferences show a higher degree of asymmetry in the case of Moody’s, and we find strong evidence of conservatism (relative to the market) in industry sectors other than financials and utilities. S&P exhibits loss function asymmetry in both the utility and financial sectors, whereas in other sectors we find strong evidence of symmetric preferences relative to those of the market. The second essay compares the impact of financial, governance and other variables (in an attempt to capture various subjective elements) in determining issuer credit ratings between the two major CRAs. Utilising a sample of 5192 firm-year observations from S&P400, S&P500 and S&P600 index constituent issuer firms, we employ an ordered probit model on a panel dataset spanning 1995 through 2009. The empirical results suggest that the agencies indeed differ on the level of importance they attach to each variable. We conclude that financial information remains the most significant factor in the attribution of credit ratings for both the agencies. We find no significant improvement in the predictive power of credit rating when we incorporate governance related variables. Our other factors show strong evidence of continuing stringent standards, reputational concerns, and differences in standards during economic crises by the two rating agencies. The third essay investigates the factors determining the allocation of different (split) credit ratings to the same firm by the two agencies. We use financial, governance and other factors in an attempt to capture various subjective elements to explain split credit ratings. The study uses a two-stage bivariate probit estimation method. We use a sample of 5238 firm-year observations from S&P 500, S&P 400, and S&P 600 index constituent firms. Our results indicate that a firm having greater size, favourable coverage and higher profitability are less likely to have a split. However, smaller firms with unfavourable coverage and lower profitability appear to be rated lower by Moody’s in comparison to S&P. Our findings suggest that the stage of the business cycle plays no significant role in deciding splits, but rating shopping and the introduction of regulation FD increase the likelihood of splits arising.

The credit valuation adjustment (CVA) on an over-the-counter derivative transaction is the price of the risk associated with the potential default of the counterparties to the trade. This dissertation provides an introduction to the concept of CVA, beginning with the required backdrop of counterparty risk and the basics of default risk modelling. Right and wrong way risks are central themes of the dissertation. A model for the pricing of both the unilateral and the bilateral CVA on a credit default swap (CDS) is implemented. Each step of this process is explained thoroughly. Results are reported and discussed for a range of parameters. The trends observed in the CDS CVA numbers produced by the model are all justified and the right and wrong way nature of the exposures captured. In addition, the convergence and stability of the numerical schemes utilised are shown to be appropriate. A case study, in which the model is applied to a set of market scenarios, concludes the dissertation. Since the field is far from established, a number of areas are suggested for further research. Copyright / Dissertation (MSc)--University of Pretoria, 2012. / Mathematics and Applied Mathematics / unrestricted

Access to adequate liquidity to finance future investments is an essential element of financial management. The two main questions that this dissertation attempts to answer are (i) what is the net valuation effect of LoC? and (ii) if LoC create value, what are the sources of this value? To answer these questions, I constructed a sample of 85,232 firm-years spanning from 1993 to 2016, with credit line data obtained from Capital IQ and Bloomberg. I investigated the valuation effects of LoC with a methodology extensively used in the analysis of the valuation implications of cash. I used this methodology because cash and LoC are two alternatives to manage liquidity and estimated the changes in shareholders' value associated with changes in existing LoC undrawn balances and on new LoC agreements. The results from this analysis demonstrates a positive association between increases in LoC capacity and shareholder's value. These findings are also obtained in univariate and event study analyses. The results also suggest that LoC create more value for firms that are rich in cash, indicating the LoC and cash are complementary liquidity management tools. I then focused on the sources of the value created by credit lines. I examined whether information asymmetry plays a role in LoC valuation by analyzing the association between firm value and LoC for firms with high- and low-information asymmetric. I also studied whether LoCs reduce agency problems by comparing firm value and LoC capacity in both poorly and well-governed firms. Furthermore, I examined whether firms benefit from an increase in financial flexibility provided by access to credit lines. I found results consistent with LoC being more valuable for firms with higher levels of informational asymmetries. The analysis also suggests that LoCs with longer maturity create more value than those with shorter maturity. Surprisingly, I find limited support for the hypothesis that shareholders place a higher value on LoCs in increasing financial flexibility. Moreover, I found no support for the role of credit lines in reducing agency problems.

The role played by Micro and Small Enterprises in many economies globally is huge and important. It is even more significant for economies in Africa such as South Africa where there are high levels of poverty and unemployment. In South Africa, Micro and Small Enterprises can contribute towards addressing the challenge of poverty and unemployment, given their proven history of job creation. However, their contribution is constrained by the lack of access to credit for growth, which is a result of a deficit of credit information among other contributing factors. This inhibits their growth. In South Africa, developmental credit was introduced through the National Credit Act 34 of 2005 to improve access to credit for low-income earners, including Micro and Small Enterprises. This type of credit is different from other types of credit because it bypasses the challenge of credit information, allowing the credit application of Micro and Small Enterprises to be assessed without the use of credit information (credit history). However, since the introduction of the Act, there has been little uptake and granting of developmental credit. This dissertation aimed to determine the reasons for this. This dissertation uses a qualitative research approach. Interviews were conducted with Micro and Small Enterprises and questionnaires administered with developmental Credit Providers, and the National Credit Regulator. Therefore, qualitative information from the above credit market stakeholders was analysed to get to the findings. The findings of this research are three-fold. In respect of credit providers, findings show that, despite the legislative provisions, there is still the use of credit information by large financial institutions, which adversely affects access to developmental credit. Findings for Micro and Small Enterprises reveal that there is a lack of knowledge of this type of credit. This is affected by the fact that Micro and Small Enterprises perceive credit as being difficult to access because of the use of credit information, which they lack, and therefore do not explore various types of credit available and suitable for their businesses. Furthermore, there are only a few credit providers, which provide developmental credit in the country; this affects their footprint in the country and different provinces. Lastly, the findings on legislation are that the requirements to register as a developmental credit provider limit the number of credit providers, which can register to provide developmental credit.

A research report submitted in accordance with the requirements of the degree of Masters of Management in the Field of Public Policy (MMPP) in the Wits School of Governance (WSG), Faculty of Commerce, Law and Management at the University of the Witwatersrand, October 2017 / Even though South Africa is living in what is referred to as a constitutional democracy which is defined within the context of its Bill of Rights contained in Chapter 2 of the Constitution of the Republic of South Africa Act, 1996 (the Constitution) which is advocating for promotion of human rights, the country still finds itself in a situation where the ideals and objectives of this Constitution are still often regarded as unachievable by ordinary citizens. The Bill of Rights seeks to promote and protect full enjoyment of the rights contained in the Constitution and requires the state to realise this by developing progressive legislation and other reasonable measures for the achievement of the above, within the backdrop of the social and economic transformation purpose of the Constitution. The success and therefore the benefit of the Bill of Rights can only be calculated within the prism of policies and legislation developed in line with this Constitution and how these are implemented by those who have been mandated to do so / MT 2019

No description available.

<p>The agriculture industry relies heavily on credit to facilitate investments in essential inputs such as equipment, seeds, and fertilizers. Traditional sources of credit, including commercial banks and the Farm Credit System (FCS), have long served as the primary options for farmers. However, nontraditional lenders like agricultural retailers have emerged as viable financing alternatives. This study examines how farmers utilize the FCS, commercial banks, and agricultural retailers to finance capital and expendable goods. Additionally, factors such as age, education, farm size, and managing preferences are evaluated to understand their impact on financing choices. An ordered logit regression model is employed to analyze the data and investigate the factors influencing farmers' decisions. The results reveal that as farmers age, they are more likely to finance capital goods through vendors/retailers due to established long-term relationships. Smaller farms tend to finance a higher percentage of capital costs, driven by the relative price per unit of capital goods. Farmers who prioritize cost control are inclined to rely less on agricultural retailers, aiming for a lower debt-to-asset ratio. The study findings also indicate that analytical decision makers borrow less from dealers compared to intuitive decision makers. Notably, as farm size increases, farmers are more likely to finance a larger portion (76-100%) of capital and expendable goods through dealer financing. This suggests that larger and more successful farms possess a more diverse portfolio and valuable assets, enabling greater borrowing capacity. Young and beginning farmers often use vendor financing to enhance credit and expand their collateralizable assets. However, participant bias and missing data on several variables limit the study's scope. Future research could delve deeper into the relationship between analytical decision makers and farmers' lending preferences. Additionally, given the growing shift toward online banking in the lending and finance industry, exploring farmers' online banking usage and predictions for future usage would provide valuable insights into their lender selection process. </p>

This dissertation is a collection of essays on financial market development and economic growth. In contrast to existing literature, which considers credit for investment along, we investigate the relationship between credit market development and economic growth in the framework where both investment and consumption are financed via credit markets. The environment developed on this dissertation creates a role for each kind of credit to play. First, credit market conditions of entrepreneurs and consumers are related and depend on each other. Second, the interactions between consumers and entrepreneurs are of importance for economic growth. The models are empirically relevant, as they can explain why the effect of credit market development on economic growth appears to differ between high-income and middle- and low-income countries. / Ph. D.