Data Analysis of SMEs and Regulation of Money lenders 4... · 2015-05-07 · Dendogram Using...
Transcript of Data Analysis of SMEs and Regulation of Money lenders 4... · 2015-05-07 · Dendogram Using...
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Data Analysis of SMEsand
Regulation of Money lenders
Naoyuki YoshinoDean, Asian Development Bank Institute (ADBI)
Professor Emeritus, Keio University, [email protected], [email protected]
Farhad Taghizadeh-HesaryAssistant Professor, Keio University, Japan
April 29 -2015
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Indonesia: SME contribution to GDP
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Small and Medium Sized Enterprise(SME)
Venture businessToyota, Honda, SONY, Seven-Eleven
HONDA had no support by the governmentHONDA could not borrow money
Mitsubishi-bank made loans to HONDA.How to finance start-up business ?Human capital development in SME
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Asian Financial MarketsMain Features
1. Bank-dominated financial system2. Small share of bond markets
Needs for long term financing 3. High percentage of SMEs4. Large share or Microcredit
(finance companies)
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Access to Finance by SMEs and Large Firms in Japan
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Barriers for SMEs in Accessing Financial Institutions, Collateral, High leding rate
6Source: ADB–OECD study on enhancing financial accessibility for SMEs: Lessons from recent crises. Mandaluyong City, Philippines: Asian Development Bank, 2013
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Borrower, Lender and Market
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BorrowerSMEsIndividuals
LenderBanksMicroCredit
Market
Information AsymmetryEspecially SME market
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Four Accounts by SME
1, Account to show Bankers2, Account to show tax authority3, His own account4, Account to show to his wife
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Examined Variable
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Cluster analysis: the average linkage method
Dendogram Using Average Linkage
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Credit Rating of SMEs using Asian Data
(i) Sales (ii) Assets (iii) Liquidity (Cash)(iv) Total Debt
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Grouping Based on Principal Component (Z1-Z2) and Cluster Analysis
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Credit Rating for SMEs by Use of SME Database
1, Credit Rating is only applicable to large companies2, Credit Rating for SMEs based on SME Data3, Three ranking of SMEs (Asian country)
Five ranking of SMEs (Japan’s case)4, SME data can produce default risk ratio5, Risk based Interest rate
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Financial Education for SMEsEducation Program and Textbooks
1, Financial Planners AssociationTeach asset management of SMEs
2, SME keeps their books every dayRegional government: Education ProgramSME: long term thinking
3, Various Financial AssociationsBankers AssociationJapan Securities’ Association
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Possible SolutionsStart up businesses
Hometown Investment--------------------------------------------------A Stable Way to Supply Risk Capital
Yoshino, Naoyuki; Kaji Sahoko (Eds.)2013, IX, 98 p. 41 illus.,20 illus. in color
Available Formats:
ebookHardcover
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Bank-based SME financing and regional financing to riskier borrowers1. Bank Loans to relatively safer borrower2. Hometown Investment Trust Funds/
E-Finance, Internet financingBankingAccount
HometownInvestment
Trust Funds
RiskierBorrowers
Investors
DepositorsSaferSMEs
BankingAccount
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Investment in SMEs and start up businesses
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Regulation of Money Lenders
1, Money lenders, Interest rate = 96% in Japan2, License --- Banks
Registration --- Finance companies3, New Finance Company Law(i) Highest interest rate = 20%(ii) Amount of borrowing < 1/3 of Income(iii) Minimum Capital requirement(iv) Paper test to run money lenders’ business(v) Self regulatory organization was set up
two steps of monitoring and supervision(vi) Consumers’ complaints (hotline) 20
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ReferencesYoshino N. Kaji, S. (2013) Hometown Investment Trust Funds, Springer, March 2013Yoshino N. and Farhad Taghizadeh‐Hesary (2014)‘Hometown Investment Trust Funds and Analysis of CreditRisk’, Asian Development Bank Institute, Working Paper, No.505, 2014.Yoshino, N. and Farhad Taghizadeh (2014), “An Analysis of Challenges Faced by Japan’s Economy and Abenomics”, The Japanese Political Economy, Routledge, Vol.40, No3-4.
Yoshino, N., Taghizadeh Hesary, F. (2015, Forthcoming), ‘Analytical Framework on Credit Risks for Financing SMEs in Asia’. Asia-Pacific Development Journal. United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP)