This study is to discuss the correlation between financial firms and non-financial firms through board linkages and the relationship between these connections and lending and borrowing behavior. Although a board linkage may provide the benefit of better information flows between the lender and borrower, a person on the board of both a bank and a borrowing firm board linkage may face a conflict of interest: the person has a fiduciary duty to both the bank and the firm and these interests may diverge. Many studies suggest that the information benefits of connections outweigh the costs of conflicts. In this way, the study is to find out what kind of firms will attract banker on the board, and the relationship between these connections and lending and borrowing behavior. The conclusions of this study are presented as the following. On firm characteristics, financial firms will choose companies with better credit risk to be the directors. In addition, on the lending and borrowing behavior, the bankers will be the directors of the companies that have longer borrowing terms. The purpose is to monitor these companies. It also can be implied that non-financial firms with banker on the board will have longer borrowing terms than the financial firms.

In Sweden we have environmental objectives to achieve for the year 2020. Swedish banks have a responsibility like everyone else in a society to act environmentally responsible. When Swedish banks are lending to SMEs they are taking a risk, however, banks are risk averse and want to minimize their risk. By lending to a company that does not take environmental responsibility the risk are increasing. In this study we want to research if Swedish banks take environmental responsibility of companies into account when lending to SMEs. Previous studies show that banks do make an environmental consideration when lending to companies, but there is lack of similar studies in Swedish banks. Additionally, the previous findings have shown to be contradictory. We also thought it would be interesting to see whether Swedish banks are familiar with the environmental objectives since we are not far from 2020. Additionally, we want to find out if there have been any changes since previous years, and if Swedish banks work differently with environmental issues in their lending process to SMEs. Thus, our problem statement is: Do Swedish banks take SMEs environmental responsibility into account in the lending process? And are the Swedish banks familiar with the environmental objectives? Some theories that are discussed in this study are the environmental risks that the banks are exposing themselves to when lending to SMEs. The environmental risks are divided into three categories, reputational risk, direct risk and indirect risk. Another theory that we discuss is the information asymmetry, which also affects the lending process. To grant a loan that is not too risky for the bank, and still fair to the company, the bank need to make an assessment. The assessment is based on the information SMEs gives Swedish banks and therefore the companies have the possibility to not be completely truthful. This is a quantitative research with a deductive approach, and in order to get our results we sent out surveys to Swedish banks that work with lending to SMEs. A total of 75 surveys were sent to the Swedish banks and the 32 answers we received constituted a response rate of 51,6 % since only 62 surveys reached the respondents. The result from our survey showed that Swedish banks do take the environmental responsibility of the company into account when lending to SMEs, however, they are not familiar with the environmental objectives. Thus, they do consider the companies’ environmental responsibility when granting loans to SMEs, however, we do not know whether the environmental objectives are included in this process or not. We could also see from the result of our survey that Swedish banks environmental responsibility has change with time. The conclusion of this research is that Swedish banks do take environmental responsibility of the company into account when lending to SMEs. This is something they should consider to develop and incorporate in their environmental work. However, they are not familiar with the environmental objectives.

No description available.

Between 2007 and 2013, the number of loans banks provided to small and medium-sized enterprises (SMEs) declined. The purpose of this single case study was to explore the strategies that senior bank lending officers used to improve lending to SMEs. The sample size consisted of 4 senior small business lending officers who have in lending for 5 or more year in Houston, Texas. The conceptual framework used was agency theory. Data were collected using semistructured interviews with 4 senior bank lending officers from a bank in the Houston, Texas area, a review of documents from lending officers, and other artifacts from the Small Business Administration. Data were analyzed with the support of software to generate themes. The data analysis included process coding of the data collected from the participants. Member checking and methodological triangulation enhanced the credibility of the findings in this study. Three themes emerged from the data analysis: the barriers and challenges lenders face when lending to business owners, bankers' strategies to overcome challenges in lending to their customers, and lenders' use of relationships and lending experience to provide loans to their customers. The findings from this study may contribute to social change by providing insights that can be used by senior lending officers related to strategies for providing loans to SMEs. The results of this study may also contribute to increased job creation for local residents, which can positively impact the economic viability of the Houston area.

The contemporary emergence of payday lending as a major source of high-cost short-term credit for credit-constrained populations has prompted debates among government officials, business representatives, advocacy groups and academics over how best to regulate the industry. Such debates typically focus on the prevailing lending practices and interest charges in the industry. While critics associate these with usury, supporters of payday lenders defend them as appropriately priced responses to market demand. This dissertation seeks to contextualize, and contribute to a deeper understanding of, the terms of these debates through an exploration of the recently concluded political exercise in Canada where responsibility for the governance of payday lending has been shifted from the federal government, with its criminal law power over usury, to provincial governments with their various regulatory powers over licensing and consumer protection. The dissertation begins with the observation that there are competing moral discourses about money and interest simultaneously embedded in the financial policy-making process in Canada, a fact that has complicated regulatory efforts aimed at payday lending. While these efforts have largely been informed by varying assessments of the transparency and competiveness of the payday lending market, this dissertation contends that a conceptually more useful way of understanding this market is to study the organizational and marketing strategies employed by payday lenders to indentify and retain a stable customer base, and the reciprocal moves on the part of customers to improve upon their terms of trade. In detailing the political process which culminated in a new regulatory regime for payday lending, this dissertation draws on the “regulation through networks” literature to help explain its progress. A major contribution this dissertation makes to this explanatory approach is in its emphasis on the dual legitimation imperatives with which the network actors had to contend as they negotiated their way to a consensus on a politically acceptable regulatory structure for payday lending. This consensus has proved to be politically vulnerable because of the continuing normative conflicts embedded in official financial policy discourse, and inter alia, in the legitimation imperatives which have permeated the policy-making process.

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Census data show that about 60 million, mostly low-income and minority, American adults either do not have a bank account or have an account but also rely on non-bank financial products to make ends meet. These products, such as payday loans, often have high costs per dollar lent and have historically fallen into gaps in both state and federal regulation. Texas, home of the largest payday lending companies in the country and over 2,500 payday lenders, provides an instructive case study of how small-dollar loan regulation has developed over the years, how non-bank financial institutions navigate the law, and how some organizations with non-profit missions have sought to offer affordable loan alternatives. This paper places current lending regulation in historical context, surveys federal and Texas law related to small-dollar loans prior to and following the financial crisis in 2008, and provides highlights from a federal pilot program designed to encourage banks to offer affordable small-dollar loan products. It also examines the experience of a community development financial institution (CDFI) in Brownsville, Texas that launched a small-dollar loan program in 2012. The federal pilot and Brownsville cases provide insights regarding the viability of affordable small-dollar products, as well as the challenges facing non-profit-maximizing institutions such as CDFIs when trying to develop loan programs under the current regulatory regime. Ultimately this paper concludes that, while there may always be a market for high-cost non-bank financial services, a combination of federal efforts to promote affordable options at banks and efforts by community-oriented CDFIs can go a long way towards providing lower-cost alternatives for people who currently rely on high-cost, non-bank products. / text

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The contemporary emergence of payday lending as a major source of high-cost short-term credit for credit-constrained populations has prompted debates among government officials, business representatives, advocacy groups and academics over how best to regulate the industry. Such debates typically focus on the prevailing lending practices and interest charges in the industry. While critics associate these with usury, supporters of payday lenders defend them as appropriately priced responses to market demand. This dissertation seeks to contextualize, and contribute to a deeper understanding of, the terms of these debates through an exploration of the recently concluded political exercise in Canada where responsibility for the governance of payday lending has been shifted from the federal government, with its criminal law power over usury, to provincial governments with their various regulatory powers over licensing and consumer protection. The dissertation begins with the observation that there are competing moral discourses about money and interest simultaneously embedded in the financial policy-making process in Canada, a fact that has complicated regulatory efforts aimed at payday lending. While these efforts have largely been informed by varying assessments of the transparency and competiveness of the payday lending market, this dissertation contends that a conceptually more useful way of understanding this market is to study the organizational and marketing strategies employed by payday lenders to indentify and retain a stable customer base, and the reciprocal moves on the part of customers to improve upon their terms of trade. In detailing the political process which culminated in a new regulatory regime for payday lending, this dissertation draws on the “regulation through networks” literature to help explain its progress. A major contribution this dissertation makes to this explanatory approach is in its emphasis on the dual legitimation imperatives with which the network actors had to contend as they negotiated their way to a consensus on a politically acceptable regulatory structure for payday lending. This consensus has proved to be politically vulnerable because of the continuing normative conflicts embedded in official financial policy discourse, and inter alia, in the legitimation imperatives which have permeated the policy-making process.

När en bank gör en kreditbedömning av ett företag så krävs det en stor del av riskmedvetenhet från bankens sida när det gäller att använda och undersöka företagens årsredovisningar, men även andra faktorer. Anledningen till att banker idag fokuserar på ett brett spektrum av faktorer har med 1990-talets generösa utlåningsstruktur att göra, och att banken efter negativa känningar av krisen ökat riskmedvetenheten. Syftet med denna uppsats är att undersöka om det är ett företags årsredovisning eller alternativt andra faktorer som kreditchefer på ett flertal fristående Sparbanker undersöker vid en kreditbedömning, samt vilken av dessa två delar som väger tyngst vid bedömningen. Uppsatsen har utförts på fristående Sparbanker från i huvudsak två landskap, det vill säga Bohuslän och Dalsland, samt en tredjedel av Västergötland. Vi har med en kvalitativ metod i form av intervjuer sammanlagt intervjuat sju kreditchefer från olika fristående Sparbanker. Den frågeställning som vi ville ha svar på från våra intervjupersoner var: Vilken betydelse har årsredovisningar i jämförelse med andra faktorer vid en kreditbedömning av ett företag? Med utgångspunkt från denna forskningsfråga formade vi våra intervjufrågor. Det huvudsakliga resultatet och den slutsats som vi kunde dra efter att vi undersökt området både teoretiskt och empiriskt var, att banker använder sig ungefär till lika stora delar av årsredovisningar kontra övriga faktorer. Övriga faktorer är exempelvis företagets styrelse, dess ledning, revisorsutlåtande och säkerheter. Båda dessa delar behövs enligt banken för att möjliggöra en så rättvis, säker och riskfri kreditbedömning som möjligt av ett företag. Detta betyder i sin tur att det system som banker förr i tiden använde, dvs. att till allra störst del undersöka de hårda värdena vilka är siffrorna i ett företags årsredovisning, inte är tillämpbar i vår nutid. En riskbedömning ska istället ske med fokus på även övriga faktorer, detta är ett måste. Den avgränsning som vi gjort är att inte undersöka lagstiftningen bakom en kreditbedömning, utan den benämns i princip endast. Vi har inte heller lagt fokus på att undersöka exakt vilka siffror kreditchefer på banker ser på vid en kreditbedömning i ett företags årsredovisningar, utan endast på om de undersöker vissa faktorer i årsredovisningarna. / When a bank makes a credit assessment of a company, it takes a great deal of awareness of risks from the bank when it comes to use and examine the company's financial statements, but also other factors. The reason that banks today are focusing on a wide range of factors, has to do with 1990's generous lending structure, and that after the negative stresses of the crisis banks increased the risk awareness. The purpose of this paper is to examine whether it is a company's financial statements or, alternatively, other factors that credit managers at several savings banks examines at a credit assessment and which of these two components that weigh heavily in the assessment. The thesis has been done in independent savings banks from two main landscapes, that is, Bohuslän and Dalsland, and a third of Västergötland. We have a qualitative approach in the form of interviews with total interviews with about seven credit managers from various independent savings banks. The question we wanted an answer to from our interviewees was: How important are financial statements in comparison with other factors in a credit assessment of a company? Based on this research question we formed our interview questions. The main result and the conclusion we could draw after we explored the area both theoretically and empirically was that banks use equal shares of annual versus other factors. Other factors being, e.g., the company's Board of Directors, its management, auditor's report and collateral. Both of these elements are needed by the bank to allow such a fair, safe and secure credit assessment as possible of a company. This in turn means that the system that banks in the old days used, which to the greatest extent examined the hard values, the numbers in a company's annual report, is not applicable in the present. A risk assessment should instead be focused on other factors as well. This is absolutely necessary. The distinction we made is not to examine the legislation behind a credit, it is only referred to in principle. We have not put the focus on investigating the exact numbers credit managers at banks look on at a credit assessment of a company's financial statements, but only if they examine some factors in the financial statements.