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Rationale. To analyse, owing to their macroeconomic implications, the conditions and volume of funding raised by households and firms and to quantify the credit risk taken on by deposit institutions via loans to these two sectors.Takeaways. • Financing conditions continued to tighten in the second half of 2022 and the transmission of market rate rises to the cost of lending accelerated. This has led to a decrease in the flow of new funding. • The bank loan stock to the resident private sector in 2022 Q3 saw a slight decrease compared with the same quarter in recent years, mainly owing to trends in the stock of loans to business activities. Non-performing and Stage 2 loans continued to decline, except in some portfolios, such as those with ICO-backed loans. • Exposures to the energy sector have a limited weight in the bank credit business in Spain, although their quality has worsened throughout 2022 and somewhat tighter credit standards have been observed.

Financial infrastructure is the underlying foundation of a country’s financial system. It is comprised of all institutions, information, technologies, rules, and standards which enable financial intermediation. The quality of a country’s financial infrastructure determines the efficiency of intermediation, the ability of lenders to evaluate risk and of borrowers to obtain credit, insurance, and other financial products at competitive terms. This report covers two dimensions of Jamaica’s financial infrastructure: 1) payments, remittances, and securities settlement systems, and; 2) credit reporting systems. This technical note does not provide a detailed assessment of individual payments system in the form of a Report on Observance of Standards and Codes (ROSC), but uses the framework of international standards for carrying out a detailed analysis of the existing systems in Jamaica, including the Committee on Payment and Settlement Systems (CPSS) and International Organization of Securities Commissions (IOSCO) Principles for Financial Markets Infrastructure (PFMIs), the CPSS General Guidance for National Payment System Development, the CPSS-World Bank General Principles on International Remittance Services (GPs), the World Bank General Principles for credit reporting and related methodologies. The information used in the assessment includes relevant national laws, regulations, rules and procedures governing the systems and other available material.

For many years, microfinance has been the poster child of governments, policymakers, and international organizations with the goal of lifting millions of people out of poverty. The notion that microfinance can pursue and achieve the intertwined goals of development and financial profitability without friction predominated. This dual opportunity, combined with a huge untapped market for financial services at the bottom of the pyramid attracted large amounts of funding from international capital markets, triggering unprecedented levels of growth. Until the global financial crisis, the sustainability of the resulting market growth had not been significantly questioned. As the crisis unfolded during the end of 2007, there seemed to be consensus among microfinance practitioners, analysts, and other industry experts that this crisis will be different. The microfinance industry braced itself for anticipated liquidity crunches, increase in costs of funds, and foreign exchange, as well as a sharp rise in portfolio arrears. This paper will: review recent publications that have drawn conclusions on the effects of the global financial crisis based on empirical data research; draw the conclusion that proper governance and risk management systems are essential and can have avoided many of the problems specific microfinance institutions (MFIs) faced during the financial crisis; and highlight Basel framework sections relevant to MFIs and demonstrate how these can be applied to strengthen MFIs.

Over the past five years, the microcredit sector has experienced unprecedented growth. The number of borrowers served by microfinance institutions (MFIs) has increased threefold to reach 120 million clients, according to MIX estimates as of December 2009 and by other estimates the number may be as high 190 million (Microcredit Summit Campaign 2011). In large markets, such as Mexico and South Africa, commercial banks and consumer lending companies have expanded their activities to include microfinance for low-income households. Unfortunately, the growth of microcredit is not always sustainable. Some iconic markets, such as India and Bosnia Herzegovina, are experiencing large-scale credit crises, and they are not alone. The deterioration in the quality of MFI loan portfolios can be attributed to several factors. Some fast growing MFIs have outgrown their risk management systems and controls. These weaknesses have often been exacerbated by high staff turnover, leading to a further erosion of credit discipline. Rapid growth has also been focused in narrow geographies, which in turn affected borrower repayment incentives and behaviors. This report takes a fresh look at the state of credit reporting at the base of the pyramid. The data and analysis for this paper are drawn from International Finance Corporation (IFC) and Consultative Group to Assist the Poorest (CGAP) market intelligence on credit reporting systems. the lessons learned for effective credit reporting at the base of the pyramid and identifies key success factors as well as common challenges.

This case study describes the history and business model of the Rural and Community Bank (RCB) network in Ghana, analyzes its performance, identifies key issues, and makes recommendations on the way forward. The study analyzes the service delivery and financial performance of the RCBs. Before the establishment of RCBs in the late 1970s and the subsequent expansion of other service providers into rural areas, access to institutional credit for farm and nonfarm activities was scarce. The main sources of credit were moneylenders and traders that charged very high interest rates. In many rural communities, secure, safe, and convenient savings and payment facilities hardly existed. The first RCB was established in a farming community in the central region of Ghana in 1976. Rural communities showed tremendous interested in the community ownership and management features of RCBs, and by 1984 the number of RCBs reached 106. The introduction of a check payment system for cocoa farmers also spurred the establishment of local banks in many communities. The financial performance of many RCBs started to decline, however, for several reasons, including a drought that affected the country in 1983, weak governing ability, conflicts within boards of directors, and ineffective management in many RCBs. By the end of 2008, 127 RCBs were in operation with a total 584 service outlets. RCBs are regulated by Ghana's central bank, the Bank of Ghana, and thereby form part of the country's regulated financial sector. RCBs are the largest providers of formal financial services in rural areas and represent about half of the total banking outlets in Ghana.

http://www.iijournals.com/toc/jfi/current; International audience; This paper reconsiders the Beta Binomial approach for modeling default risk in homogenous credit portfolio. It first introduces a new parameterization of the Beta Mixing Distribution that is now a function of the common default probability and the common default correlation. It then focuses on the correlation parameter and derives closed-form expressions for sensitivities of key credit risk indicators. Results of the sensitivity and elasticity analysis show that the common default correlation impacts on the credit at risk and expected shortfall quite differently. One also performs an application on CDOs to highlight the key role of the common default correlation on the different tranches

In this paper, we construct a new measurement of sectoral concentration of credit portfolios--risk-adjusted HHI. This measurement takes systematic risk of different sectors into consideration by weighting them with their betas. This paper investigates the effects of sectoral concentration on the Chinese banks’ risk using panel data on 16 Chinese listed commercial banks during the 2007-2011 period and compares the results of the new measurement with those of more conventional measure HHI. We find that sectoral concentration is associated with higher risk, and our new measurement performs well to capture the change of systematic risk of sectors and exposures to sectors at the same time. Our analysis may provide important implication for regulators and policy makers of the banks in developing markets.