Archive | Finance RSS feed for this section
Economics, Finance, Governance

Ultra-low interest rates and wandering overinvestment cycles in East Asia

Ultra-low interest rates and wandering overinvestment cycles in East Asia
In the 1960s, Kaname Akamatsu (1961) described the gradual relocation of industries from the advanced industrialized countries in East Asia to the less advanced countries during the latter’s economic catch-up process as the “flying geese” pattern. For instance, the textile industry was clustered in Japan in the 1950s but then successively relocated to the newly industrialized economies (Hong Kong, China; Taipei,China; Singapore; and the Republic of Korea), the new generation of tiger countries (Indonesia, Malaysia, the Philippines, and Thailand), the People’s Republic of China (PRC), and now increasingly to Viet Nam. Read more.

Economics, Finance, Governance

The brief for cash

The brief for cash
Cash is an extremely useful social contrivance. Two possible drawbacks of high-denomination cash have recently been discussed by Kenneth Rogoff (2016) in his book, The Curse of Cash, and echoed by other economists. They are the extensive use of high-denomination cash by criminals and others engaged in illicit and corrupt activities, and the role that cash plays in avoiding deeply negative nominal interest rates imposed on bank accounts. Rogoff and others call for a phasing-out of high denomination cash over a long period. Read more.

Finance

One year after the Fed liftoff: Consequences for emerging markets

One year after the Fed liftoff: Consequences for emerging markets
The Federal Open Market Committee, the official policy making body of the Board of Governors of the Federal Reserve System (Fed), announced the long-awaited increase, or liftoff, in the federal funds rate of 0.25% just over a year ago in December 2015. This action represented the beginning of a “return to normalcy” from the period since 2008 when the Federal Reserve had been operating at the zero lower bound. With the liftoff already 1 year behind us, market watchers widely expect continued, even abrupt, increases in United States (US) interest rates in the coming year. Read more.

Finance

Bridging the “missing middle” between microfinance and SME finance in South Asia

Bridging the “missing middle” between microfinance and SME finance in South Asia
With financial inclusion finding a place in the international policy agenda, many developing countries are facilitating the development of their microfinance sectors. However, not enough attention has been paid to carving out a route for microfinance borrowers who outgrow microfinance, requiring loan sizes higher than the upper threshold of microcredit, still too small to avail of small and medium-sized enterprise (SME) credit from commercial banks. Other small enterprises that are unbanked also have needs unmet by microfinance institutions (MFIs) or commercial banks. Read more.

Finance

Assessing policies to promote financial inclusion, regulation, and education in emerging Asia

Assessing policies to promote financial inclusion, regulation, and education in emerging Asia
Financial inclusion has been receiving increasing attention for its potential to contribute to economic and financial development while fostering more inclusive growth and greater income equality. There are numerous arguments in favor of increasing financial inclusion, and a large body of evidence shows that increased financial inclusion can significantly reduce poverty and boost shared prosperity. Greater access to financial services by households can help smooth consumption, ease cash shortages, and increase savings for retirement and other needs, although the evidence on microfinance is less positive. Read more.

Finance

The institutionalization of the credit surety fund in the Philippines

The Institutionalization of the Credit Surety Fund in the Philippines
The local business community is upbeat with the passing into law of Republic Act 10744, otherwise known as the Credit Surety Fund Cooperative Act of 2015 on 6 February 2016. Essentially, the said law provides for the creation and organization of the Credit Surety Fund (CSF) cooperatives to manage and administer credit surety funds and to enhance the accessibility of micro, small, and medium-sized enterprises (MSMEs); cooperatives; and nongovernment organizations (NGOs) to bank credit facilities. Read more.

Economics, Finance

Does internal and external research and development affect innovation of small and medium-sized enterprises? Evidence from India and Pakistan

Does Internal and External Research and Development Affect Innovation of Small and Medium-Sized Enterprises? Evidence from India and Pakistan
Small and medium-sized enterprises (SMEs) play a vital role in the economic growth of a country. Specifically, in developing countries where poverty, unemployment, low income per capita, low literacy rate, and high inflation and interest rates can hinder economic growth, SMEs contribute significantly to the national income and provide employment opportunities (Moktan 2007). However, SMEs have low survival rates than large firms because of resource constraints. Read more.

Finance, Trade

Digitizing trade – how changing the process is changing development

Digitizing trade – how changing the process is changing development
Over 31 million consumers in Viet Nam researched or purchased a product online in 2015. Just ten years ago, internet connectivity was only starting to become common. Digitization is changing how people trade. There are even more dramatic changes happening under the hood. The way trade is financed, processed and regulated has entered a period of disruption. We take this opportunity to consider the short and long term implications of digitization of the trade process. They’re not what you’d expect. Read more.

Finance, Information and Communications Technology

Technology and innovation for SMEs: Policy lessons from East Asia

Technology and innovation for SMEs  Policy lessons from East Asia
Small and medium-sized enterprises (SMEs) in developing economies often have difficulties improving their technological capabilities in terms of product or process innovation. Therefore, some kind of government support is necessary. Read more.

Finance

Fintech is the game-changer for financial inclusion in Asia

Fintech is the game-changer for financial inclusion in Asia
Due to innovations in financial technology and changes in the enabling environment, the number of financially excluded adults across Asia and the Pacific has dropped to about 1 billion. Increased access to affordable financial services can be a lever for Asians to smoothen consumption, manage risk and improve their lives through better savings options, access to credit, and cheaper payments or remittances. Read more.