Related Lending and Bank Performance: Evidence from Indonesia

After the Asian financial crisis of 1997, it was confirmed that banks lend to their related parties in many countries. The question examined in this article is whether related lending functions to alleviate the problems of asymmetric information or transfers profits from depositors and minority shareholders to related parties. The effects of related lending on the profitability and risk of banks in Indonesia are examined using panel data from 1994 to 2007 comprising a total of 74 Indonesian banks. The effects on return on asset (ROA) varied at different periods. Before and right after the crisis, a higher credit allocation to related parties increased ROA. In middle of the crisis, it turned to negative; and this has also been the case in the most recent period as the Indonesian economy has normalized. Effects of related lending on bank risk measured by the Z-score and non-performing loan is not clear. After undergoing bank restructuring, related lending has decreased and the profit structure of banks has changed.

Is Group Lending A Good Enforcement Scheme for Achieving High Repayment Rates?: Evidence from Field Experiments in Vietnam

Microfinance institutions employ various kinds of incentive schemes but estimating the effect of each scheme is not easy due to endogeneity bias. We conducted field experiments in Vietnam to capture the role of joint liability, monitoring, cross-reporting, social sanctions, communication and group formation in borrowers’ repayment behavior. We find that joint liability contracts cause serious free-riding problems, inducing strategic default and lowering repayment rates. When group members observe each others’ investment returns, participants are more likely to choose strategic default. Even after introducing a cross-reporting system and/or penalties among borrowers, the default rates and the ratios of participants who chose strategic default under joint liability are still higher than those under individual lending. We also find that joint liability lending often failed to induce mutual insurance among borrowers. Those who had been helped or who had repaid a little in the previous round were more likely to default strategically and repay a little again in the current round and those who paid large amounts were always the same individuals.

From left to right -- Israel's repositioning in the world

第二次大戦時に大量のユダヤ人避難民を受け入れたイスラエルは、1946年の建国時には共産主義的な社会改革思想に基づくキブツ運動などの左翼的思潮を国家建設の支柱にしていたが、その後の政治過程のなかで一貫して右傾化の方向をたどり、現在では国際的にみても最も保守的な軍事主義的思想傾向が国民のあいだで広く共有され、国内のアラブ系住民の経済的従属が永く固定化するに至った。現在のイスラエル国家を思想的にも実体経済的にも支えている基本的な理念は、建国時のそれとは全く対極的な新保守主義とグローバル化された「新自由主義」的な資本主義であり、それは当然ながら国内における安価な労働力としてのアラブ系住民の存在を所与の前提条件として組み込んでいる。これは具体的にどのような経緯によるものであり、またイスラエル国家のどのような性格から導き出されるものなのか。本論稿では政治的シオニズムがイスラエル建国後から現在までにたどってきた思想的な系譜を改めて確認し、現在のイスラエルが国際的に置かれている特異な立場とその背後にある諸要因を説明する。