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Financing Pattern of the Development Bank of Ethiopia (DBE)
Issue:
Volume 8, Issue 1, February 2022
Pages:
1-5
Received:
16 December 2021
Accepted:
7 January 2022
Published:
17 January 2022
Abstract: This study model over view the financing pattern of the Development Bank of Ethiopia ((DBE), Documentary evidence, annual reports, and accounts form the data basis of this paper. A Simple Multiple Regression Model was developed incorporating two independent variables (liquidity and shareholders fund) and one major dependent factor (loans and advances), representing the bank's financing pattern. The model was used to examine the extent to which these predictor variables explain the bank's loan and advances during the period 2006-2013. The regression results reveal that liquidity is an important factor in explaining the financing pattern of DBE in Ethiopia. However, a contrary impact has been documented concerning shareholders' funds. Based on the evident result from hypothesis one which says Liquidity does not have significant predictive power over DBE loans and advances can be conceived that the amount of loan and advances to be dished out in form of equity or credit financing by BOI is dependent solely on the availability of liquidity. The paper recommends the need for BOI and other DBE to maintain constant liquidity planning to keep abreast of societal credit needs in the form of loans and advances. In addition, the study further recommends the need for the bank to continually reduce the allocated amounts to shareholder's funds in the form of reserves to enable it to improve on developmental activities.
Abstract: This study model over view the financing pattern of the Development Bank of Ethiopia ((DBE), Documentary evidence, annual reports, and accounts form the data basis of this paper. A Simple Multiple Regression Model was developed incorporating two independent variables (liquidity and shareholders fund) and one major dependent factor (loans and advanc...
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Operational Challenges, from PMO to EPMO Execution and Operation Case Study Within Electricity Producing Companies (Four Selected Companies Within EU28)
Ekomenzoge Metuge,
José Ramón Otegi Olaso
Issue:
Volume 8, Issue 1, February 2022
Pages:
6-13
Received:
2 February 2021
Accepted:
9 February 2021
Published:
26 January 2022
Abstract: During the European unification process, they stated the need for drawing up a common energy strategic plan that will affects electricity production system in terms of infrastructure, production and generation. The EU strategic action plans included; reduction in emissions, an increase in renewable energies, energy efficiency. In this light therefore the energy efficiency was booked for researching. This article presents an in-depth study of the challenges in transforming a functioning PMO model to an EPMO model within four electricity companies from different countries within the EU and how those challenges can be address within companies implementing same methodology to bring about electricity production efficiency. Will these identified challenges make it impossible for the companies to achieve electricity production efficiency in the transformation from PMO to EPMO? PMO has been the major methodology used by these companies. To achieve production efficiency, the need for a heavyweight methodology was identified (EPMO) and implemented in four mega electricity producing companies with cross boarder distributions, one from France; Germany; Spain and UK.
Abstract: During the European unification process, they stated the need for drawing up a common energy strategic plan that will affects electricity production system in terms of infrastructure, production and generation. The EU strategic action plans included; reduction in emissions, an increase in renewable energies, energy efficiency. In this light therefo...
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Impact of Insurance Companies Investment on Bank Liquidity and Economic Growth of Nigeria
Oru Anthony Odu,
Ubana Ubi Iwara,
Eja-Osang Joseph
Issue:
Volume 8, Issue 1, February 2022
Pages:
14-24
Received:
11 December 2021
Accepted:
6 January 2022
Published:
26 January 2022
Abstract: The study examined the impact of insurance companies’ investment on bank liquidity and economic growth of Nigeria. This is basically to determine the extent of insurance companies contribution to liquidity formation in the banking sector which has being the major cause of bank failures as a financial intermediary and a dealer in short-term securities thereby mobilizing resources for real economic sector. The population of the study is made up of the fifty-nine Nigeria (59) insurance companies in Nigeria. Time series data from the central bank statistical bulletin on total insurance business investment was the source for secondary data. The study employed both inferential and Descriptive Statistics. The E-view statistical package was used for data analysis and test for three (3) hypotheses. The study reveals that there is no significant relationship between short-term investments of insurance companies and banks liquidity, that there exist no significant relationship between short term investment of insurance companies and liquidity formation of the Nigerian money market. The study also reveals that there exist a positive but not significant relation between insurance premium and Gross Domestic product in Nigeria. The study concludes that insurance companies in Nigeria do not impact significantly on the liquidity of banks, money market and economic growth in Nigeria. The study recommends that insurance companies be recapitalized to afford them more resources to expand their investment portfolios to stimulate liquidity formation. That the insurance companies should be more innovative and provide more services to courte public attention and participation to close the insurance gap. The National Insurance Commission (NAICOM) should also ensure compliance and adherence to regulations in the industry.
Abstract: The study examined the impact of insurance companies’ investment on bank liquidity and economic growth of Nigeria. This is basically to determine the extent of insurance companies contribution to liquidity formation in the banking sector which has being the major cause of bank failures as a financial intermediary and a dealer in short-term securiti...
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Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia
Anwar Adem Shikur,
Omer Mohammed Ahmed,
Mubarek Sadik Hussen
Issue:
Volume 8, Issue 1, February 2022
Pages:
25-32
Received:
28 December 2021
Accepted:
21 January 2022
Published:
26 January 2022
Abstract: This study was primarily conducted to investigate influencing factors for insurance companies specifically for private insurance operating in Ethiopia. To attain the objective both industry-specific and macro-economic factors include the ratio of liquidity, leverage, the volume of capital, age of the insurance, underwriting risk, premium growth, market share, inflation, and economic growth. The study included ten insurance companies with operations from 2011 to 2020. Secondary data was collected from the Ethiopian central bank (National Bank of Ethiopia). An explanatory research design with a mixed approach was used for this study. Furthermore, this study employed OLS to estimate a multiple regression model constructed through E-views 10 software after all the necessary diagnostic tests were undertaken. The finding indicates liquidity, firm premium growth, the age of the company, and market share have significant positive effects on insurance profitability. Whereas, underwriting risk, leverage, the volume of capital, and inflation reveal significant but adverse effects on insurance profitability. The study suggests insurances companies adopt different techniques such as improving loss handling mechanisms, assessing and gathering adequate information about the insured before selection, and marketing managers should pay a great deal of attention to maximizing market share through the use of user-friendly information technology for both the insurance and it is customers.
Abstract: This study was primarily conducted to investigate influencing factors for insurance companies specifically for private insurance operating in Ethiopia. To attain the objective both industry-specific and macro-economic factors include the ratio of liquidity, leverage, the volume of capital, age of the insurance, underwriting risk, premium growth, ma...
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The Effect of Resource Endowment and Governance on Human Capital Development of Sub-Saharan African Countries
Issue:
Volume 8, Issue 1, February 2022
Pages:
33-38
Received:
9 November 2021
Accepted:
14 December 2021
Published:
5 February 2022
Abstract: Human capital development is a process of enhancing the level of human capital capacity through attaining school and provides incentive-based training. The study helps to analyze the interaction between governance, resource and human capital in the study area. To conduct this study panel data type from 2005-2018 has been used, the data obtained from the World Bank database and the Penn world database and for analysis, both descriptive and system GMM panel data analysis have been used. The main reasons enforce to conduct this study is to checkup whether the resource endowment and governance important for human capital? Results of this study show that except for lag of human capital and voice and accountability other variables like resource endowment, labor participation rate, foreign direct investment, rule of law, and regularity quality are statistically and negatively affected human capital development. Given these results, the researcher recommended as, a responsible bodies in sub-Saharan African countries should be attained on the expansion of FDI that has to be especially concentrated on the manufacturing sector; an institution for good governance first should develop than formulate good governance principles, and finally develop resource merit institution in the favor of human capital development.
Abstract: Human capital development is a process of enhancing the level of human capital capacity through attaining school and provides incentive-based training. The study helps to analyze the interaction between governance, resource and human capital in the study area. To conduct this study panel data type from 2005-2018 has been used, the data obtained fro...
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The Paradox of Credit Scoring Model Deterioration
Issue:
Volume 8, Issue 1, February 2022
Pages:
39-47
Received:
8 January 2022
Accepted:
27 January 2022
Published:
9 February 2022
Abstract: Scoring models are widely renowned and used in financial organizations in a variety of fields, but most importantly – to predict and control credit risk. This article addresses practical problems of scorecards usage after its implementation. With time its predictive power tends to deteriorate, but not always it is applicable to completely rebuild the model fast enough due to lack of time/human/financial resources. Then cut-off, which was set when the scorecard was initially implemented, should be corrected to achieve optimal (i.e. cash-flow maximizing) performance. The literature on ways to maintain the existing model over time and manage the cut-offs is extremely scarce. The article is built on simple yet fundamental analytical explanations of scorecard performance dynamics, derived from practical experience. Results are backed by a numerical example, which shows the efficiency of different managerial decisions regarding cut-off setting in the paradox zone. The main conclusions are the following. In the most common case, the optimal reaction on model deterioration would be to counterintuitively narrow down the reject zone via cut-offs, which results in higher sales amount and even more increased risk ratios, but maximizes cash-flow in given conditions. This is the core of the scoring model deterioration paradox. It arises from the fact that when the scorecard deteriorates the high-risk segments of clients are actually becoming less risky and hence more profitable. This affects cut-offs, which must be applied to reject the riskiest loss-making segment of loan applications.
Abstract: Scoring models are widely renowned and used in financial organizations in a variety of fields, but most importantly – to predict and control credit risk. This article addresses practical problems of scorecards usage after its implementation. With time its predictive power tends to deteriorate, but not always it is applicable to completely rebuild t...
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Risk Analysis in Trading with Castor Seeds Futures in India
Ravi Prakash Siddavatam,
Appa Rao
Issue:
Volume 8, Issue 1, February 2022
Pages:
48-56
Received:
18 January 2022
Accepted:
17 February 2022
Published:
28 February 2022
Abstract: India is the largest producer and exporter Castor seeds in the World. Castor seeds is traded in both Spot market and Futures market are well established in India. The present study is time series analysis on daily Futures closing prices of Castor Seeds Commodity of National Commodity and Derivatives Exchange (NCDEX) and the corresponding Spot market prices in Deesa of Banaskantha district in Gujarat State. Since the introduction of commodity derivatives markets in 2003 in India, there was a lot of political/social criticism/resistance that these derivative markets lead to only speculation and paying way for high inflation of commodities prices. Hence, the author initiated to test few commodities price data. The present study is on castor seeds. The main objective of the study whether Price discovery is happening due to introduction of Futures in castor seeds or not, and to analyze price risk. The Futures and Spot prices of Castor seeds commodity are studied for six years by using important econometric tools: Unit Root test, Cointegration test, Granger Test, VECM, Wald test & Variance Decomposition test with the help of Eviews software Version 10. Futures are unbiased predictor of spot and this is the hypothesis that has been tested by using above Econometric tools. The study reveals that the Castor seeds time series data is stationary at first difference and having atleast one cointegrated equation. There is long term and short term causality from Futures towards Spot variable. The speed of adjustment from Futures variable towards equilibrium of the market price is 5.1% for any news/shock that is related to Castor seeds market. Granger casualty test indicates that there is bi-direction relationship between the variables. Variance Decomposition test reveals that Futures role in price discovery of spot ranges between 19% to 74% from 1 to 10 periods. It has been concluded that market prices in Spot and Futures of Castor seeds commodity are integrated and appropriate price discovery is happening in Indian commodity Exchange (NCDEX). Introduction of Castor futures are useful to development and stability of the market.
Abstract: India is the largest producer and exporter Castor seeds in the World. Castor seeds is traded in both Spot market and Futures market are well established in India. The present study is time series analysis on daily Futures closing prices of Castor Seeds Commodity of National Commodity and Derivatives Exchange (NCDEX) and the corresponding Spot marke...
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