SFeDu
of.211, Gorgoko St., 88 
Rostov-on-Don
Russia
344002
+7 (863) 250-59-54
This email address is being protected from spambots. You need JavaScript enabled to view it.
te@sfedu.ru

TERRA ECONOMICUS

  • Home
  • Issues
  • 2014
  • No 2
  • Harmonizing the interests of lenders and borrowers with the goals of sustainable territorial development: The basis for product development in retail banking (A survey of the literature)

Harmonizing the interests of lenders and borrowers with the goals of sustainable territorial development: The basis for product development in retail banking (A survey of the literature)

TERRA ECONOMICUS, , Vol. 12 (no. 2),
p. 88-108

Recent research on inclusive financial services reveals the urgency of issues related to product development in retail banking, and especially for low-income groups. The article provides a review of literature on microfinance, relationship banking, social banking, community banking, and group lending in context of achieving financial sustainability by both borrowers and lenders having their interests harmonized with those of sustainable territorial development. The theoretical gap is identified, showing the lack of researchers’ attention to retail product/service development aimed at harmonization of interests of consumer lending system participants. Increasingly important role of local communities in sustainable (= rational) lending is proved. The conclusion is made that the product development in retail banking, being community-oriented, should be aimed at the alignment of interests of the borrowers and the lenders, along with sustainable territorial development priorities.


Keywords: product development in retail banking; literature review; sustainable banking; microcredit; financial inclusion; group lending; individual lending; relationship banking; sustainable community development; credit behavior

References:
  • Ibragimova D.Kh. (2008a). Living on credit: areas of distribution / In: Ovcharova L.N. (ex. ed.) (2008). Russian households before the financial crisis: income and financial behavior. Мoscow: Independent Institute for Social Policy, 208 p. (In Russian.)
  • Ibragimova D.Kh. (2008b). Needs of the population in credit resources / In: Ovcharova L.N. (ex. ed.) (2008). Russian households before the financial crisis: income and financial behavior. Мoscow: Independent Institute for Social Policy, 208 p. (In Russian.)
  • Ibragimova D.Kh. and Surkov S.V. (2008). Evaluation of the potential demand and possibilities for public participation in the housing loan programs / In: Ovcharova L.N. (ex. ed.) (2008). Russian households before the financial crisis: income and financial behavior. Мoscow: Independent Institute for Social Policy, 208 p. (In Russian.)
  • Kozyreva P.М. (2012). Financial behavior in the context of social economic adaptation of the population (a sociological analysis). Sociological Studies (Socis), no. 7, pp. 54–66. (In Russian.)
  • Rodnina A.Yu. (2014). Competitive factors in the Russian banking market: a regional perspective. Theoretical Economy, no. 1. Available at: http://www.theoreticaleconomy.info/articles/788.pdf. (In Russian.)
  • Shafirov L.A. (2013a). Contemporary boom of Russia consumer lending: improving the efficiency of social lending as a measure of countercyclical regulation. Теrrа Economicus, vol. 11, no. 1, part 2, pp. 34–42. Available at: http://sfedu.ru/evjur/data/2013/journal11.1.2.pdf. (In Russian.)
  • Shafirov L.A. (2013b). The concept of assessing the availability of capacity for sustainable lending to households living in Russian monotowns (purpose-loans to households to improve their housing conditions case). Теrrа Economicus, vol. 11, no. 3, part 3, pp. 20–30. Available at: http://sfedu.ru/evjur/data/2013/journal11.3.3.pdf. (In Russian.)
  • Shafirov L.A. (2013c). The role of local authorities in the lending to individuals system: coordinating for the regional entrepreneurial community benefits. Теrrа Economicus, vol. 11, no. 4. Available at: http://elibrary.ru/item.asp?id=21061514. (In Russian.)
  • Shafirov L.A. and Oganesyan А.А. (2013). Consumer lending rationalization for the local development benefits: an institutional approach. Теrrа Economicus, vol. 11, no. 4, part 3, pp. 27–42. Available at: http://elibrary.ru/item.asp?id=21515082. (In Russian.)
  • Volchik V.V., Shafirov L.A. and Oganesyan А.А. (2013). Institutional design and mechanisms of regulation of the consumer credit market in depressed territories. Journal of Economic Regulation, vol. 4, no. 4, pp. 41–59. Available at: http://hjournal.ru/journals/jer.htm. (In Russian.)
  • Adam T.R. and Streitz D. (2013). Bank Lending Relationships and the Use of Performance-Sensitive Debt. SFB 649 Discussion Paper 2013-027. Available at: http://edoc.hu-berlin.de/series/sfb-649-papers/2013-27/PDF/27.pdf.
  • Arito Ono and Iichiro Uesugi (2005). The Role of Collateral and Personal Guarantees in Relationship Lending: Evidence from Japan’s Small Business Loan Market RIETI Discussion Paper Series 05-E-027. Available at: http://www.rieti.go.jp/jp/publications/dp/05e027.pdf.
  • Attanasio O., Augsburg B., de Haas R., Fitzsimons E. and Harmgart H. (2013). Group lending or individual lending? Evidence from a randomized field experiment in rural Mongolia. CentER Discussion Paper, vol. 2013-074 Tilburg University. Available at: https://pure.uvt.nl/portal/files/1557735/2013-074.pdf.
  • Brown J., Cox D., Griffiths S., Sanger N. and Weston D. (2008). Evolving Models of Retail Banking Distribution: Capitalizing on changes in channel usage. Deloitte Center for Banking Solutions. Reinventing Retail Banking Series. Available at: http://www.deloitte.com/assets/dcom-unitedstates/local%20assets/documents/us_fsi_cbs_evolving_models_may08.pdf.
  • Chang Beryl Y. (2005). Access to Consumer Credit: Impact on Low vs. High Income Groups. Dissertation submitted in partial fulfillment of the requirements for the degree of doctor of philosophy in the department of economics at Fordham University. New York.
  • Chien J. (2012). Designing Disclosure Regimes for Responsible Financial Inclusion. Public Disclosure Authorized, no. 78.
  • Christen R.P. and Pearce D. (2006). Managing risks and designing products for agricultural microfinance. Occasional Paper 11. Available at: http://www.ifad.org/ruralfinance/pub/risks.pdf.
  • De la Torre A., Martinez Peria M.S. and Schmukler S.L. (2010). Bank involvement with SMEs: Beyond relationship lending. Journal of Banking & Finance, no. 34, pp. 2280–2293.
  • Demirguc-Kunt A. and Klapper L. (2012). Measuring Financial Inclusion. The Global Findex Database. Policy Research Working Paper no. 6025. The World Bank, Development Research Group, Finance and Private Sector Development Team.
  • Dinsmore P.C. and Cabanis-Brewin J. (eds.) (2011). The AMA Handbook of project management. New York: AMACOM.
  • Drotskie A. (2009). Customer experience as the strategic differentiator in retail banking. Dissertation presented for the degree PhD in Business Management and Administration University of Stellenbosch Business School Faculty of Economic and Management Science.
  • Duvendack M., Palmer-Jones R., Copestake J.G., Hooper L., Loke Y. and Rao N. (2011). What is the evidence of the impact of microfinance on the well-being of poor people? London: EPPI-Centre, Social Science Research Unit, Institute of Education, University of London.
  • Farinha L.A. and Santos J.A.C. (2000). Switching from single to multiple bank lending relationships: determinants and implications. BIS working papers, no. 83. Bank for International Settlements, Monetary and Economic Department, Basel, Switzerland.
  • Federal Deposit Insurance Corporation (2012). FDIC Community Banking Study. Available at: http://www.fdic.gov/regulations/resources/cbi/study.html.
  • Ferri G., Kang Tae Soo and Kim In-June (2001). The Value of Relationship Banking during Financial Crises. Evidence from the Republic of Korea. Policy research working paper no. 2553. The World Bank, Development Research Group, Finance.
  • Friexas X. and Rochet J.-C. (1999). Microeconomics of banking. Cambridge: Massachusetts Institute of Technology.
  • Geršl A. and Jakubík P. (2010). Relationship Lending in the Czech Republic. Working Paper Series of the Czech National Bank (CNB), no. 1. Available at: http://www.ecb.europa.eu/home/pdf/research/compnet/Toth_2013.pdf??62da72cb0e85a11e2a46d096f642639b.
  • Ghatak M. (1999). Group lending, local information and peer selection. Journal of Development Economics, vol. 60, pp. 27–50.
  • Giné X. and Karlan D.S. (2010). Group versus Individual Liability: Long Term Evidence from Philippine Microcredit Lending Groups. Available at: http://karlan.yale.edu/p/GroupversusIndividualLending.pdf.
  • Hermes N., Lensink R. and Teki H.M. (2003). Peer monitoring, social ties and moral hazard in group lending programmes: evidence from Eritrea. Research Report 03E36. University of Groningen, Research Institute SOM (Systems, Organisations and Management).
  • Ikechukwu A. (2012). Microfinance Banking in Nigeria: Problems and Prospects. International Journal of Finance and Accounting, no. 1(5), pp. 106–111.
  • Ivanauskienė N., Auruškevičienė V., Škudienė V. and Nedzinskas Š. (2012). Customer perceptions of value: case of retail banking. Organizations and markets in emerging economies, vol. 3, no. 1(5).
  • Jantan Muhamad and Kamaruddin Abdul Razak (1998). Bank attributes and demographic factors in determining customer choice in retail banking: an analytic hierarchy approach. AAM Journal, no. 2.
  • Korslund D. and Spengler L. (2012). Strong, Straightforward and Sustainable Banking: A Report on Financial Capital and Impact Metrics of Values Based Banking. Full Report. Global Alliance for Banking on Values. Available at: http://www.gabv.org/wp-content/uploads/Full-Report-GABV-v9d.pdf.
  • Montoriol Garriga J. (2006). Relationship Lending and Small Business Finance: Empirical Analysis of Cost of Capital, Credit Rationing, and Firm Performance. Economics and Business Department, Universitat Pompeu Fabra Barcelona. Available at: http://www.tdx.cat/bitstream/handle/10803/7344/tjmg.pdf?sequence=1.
  • Nawai Norhaziah and Shariff Mohd Noor Mohd (2013). Loan Repayment Problems in Microfinance Programs that use Individual Lending Approach: A Qualitative Analysis. Journal of Transformative Entrepreneurship, vol. 1, issue 2, pp. 93–99.
  • Pande R., Cole S., Sivasankaran A., Bastian G. and Durlacher K. (2012). Does poor people’s access to formal banking services raise their incomes? EPPI-Centre, Social Science Research Unit, Institute of Education, University of London.
  • Peterson T. (2008). A comparative analysis of sustainable community frameworks. Prepared for: ICLEI – Local Governments for Sustainability. Available at http://www.icleiusa.org/action-center/affecting-policy/Sustainability%20Framework%20Analysis.pdf.
  • Power A. (2004). Sustainable communities and sustainable development: a review of the sustainable communities plan. Available at: http://sticerd.lse.ac.uk/dps/case/CR/CASEreport23.pdf.
  • Rutledge S. (2009). Improving Protection in Financial Services for Russian Consumers. ECA Knowledge Brief, issue 1. Available at: http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/0,,contentMDK:22431187~pagePK:146736~piPK:146830~theSitePK:258599,00.html.
  • Schirr G.R. (2008). New Service Development: User Collaboration in a Unique Process. Dissertation Submitted as partial fulfillment of the requirements for the degree of Doctor of Philosophy in Business Administration in the Graduate College of the University of Illinois at Chicago.
  • Uchida H., Udell G.F. and Yamori N. (2008). Loan Officers and Relationship Lending to SMEs. Federal Reserve Bank of San Francisco. Working Paper 2008-17. Available at: http://www.frbsf.org/publications/economics/papers/2008/wp08-17bk.pdf.
Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606