THE EFFECT OF TAXES ON THE DEVELOPMENT OF LOCAL MANUFACTURING INDUSTRIES
ACASE STUDY OF CROWN BEVERAGES
INTRODUCTION
This chapter comprises the background of the study, statement of the problem, objectives of the study, research questions, scope of the study, the significance of the study, limitations and solutions.
The true burden of the corporate income tax has been controversial. The conventional wisdom holds that owners of capital bear most of the burden of the corporate income taxes. But the economic incidence of the corporate income tax suggests that the corporate income tax can be shifted to various candidates including investors, workers, and consumers. In particular, the burden of the corporate income tax can fall on labor. When faced with a higher production costs due to the corporate income tax, can pass the burden of this tax by decreasing their wage payment. Current literature suggests that the corporate income tax is passed onto workers, although these studies mainly focus on the cross-country evidence. It is less clear whether the burden of the corporate income tax is shifted to labor within the United States. In addition, no empirical study that investigates the incidence of corporate income taxes in the presence of imperfect competition.
Probably the most discussed question within the empirical studies is the link between economic growth, corporate tax, and investment- and capital-activity. Tax policy mainly determines the method of corporations financing. The funds for further investments can be gained either through new equity, retained earnings or debt. High tax rates reduce corporate profits and thus the possibility of a subsequent reinvestment. International movement of capital enables simple selection of investments allocation. For small open economies which are mostly investment recipient the high taxation can be a competitive problem. Becker, Fuest and Riedel (2012) measured the relative importance of quality and quantity effects of corporate taxation on foreign direct investment. They conclude that booth effects of corporate tax have a negative impact on foreign direct investment. Effects of changes of tax rates on intensive investments were engaged by e.g. Devereux (2007) and De Mooij and Ederveen (2003). In their work they conclude that this type of investment is more sensitive to the changes in laws with focus on taxes and the average tax rate, and is more flexible than standard investments.
Financial institutions are institutions which offer financial services inform of loans , financial advise, offer banking services like accept deposits and also give out deposits , such institutions are considered to be the key drivers of the economy as they control the amount of money in circulation in an economy , (Robbins, 2010).
At the international level, capital is more mobile than labor. An increase in the home country’s corporate income tax rate tends to drive capital abroad. Consequently, the tax is shifted to immobile factors such as labor. Built on this intuition, a handful of empirical papers have found that labor shares a significant burden of the corporate income tax using cross-country data. Another common feature of the existing studies is the assumption of perfectly competitive market. To the degree that this assumption departs from reality, the estimating equations may be misspecified. As Auerbach (2006) points out, before-tax corporate profits arising from imperfect competition can respond to corporate income taxes. Noncompetitive rents occur due to restricted output below the competitive level in the product market.
Performance is defined as the accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed. In a contract, performance is deemed to be the fulfillment of an obligation, in a manner that releases the performer from all liabilities under the contract (Honohan et al, 1995). He further noted that the key performance indicators for most commercial banks include; unit of sales, return on investment, market share percentage, product quality, growth, earnings and capital aspects. They conclude that economic growth is the most jeopardized by corporate tax, income tax, and consumption taxes. Similar conclusions for corporate taxation provide Lee and Gordon (2005). On the other hand, there are also studies that do not demonstrate this relationship, but those are the exception than the rule. As example can be used work by Forbin (2011), analysis Swedish economy in years 1951 – 2010 and shows no significant effect between corporate taxation and long-term economic growth. He also admits that if he would use marginal effective tax rates the results could be different.
Despite of the increased level of tax holidays Uganda as a country is one of the most underdeveloped countries in the world, it s against this that the this study intends to investigate into the the effect of taxes on the development of local manufacturing industries.
Despite of the efforts by the Ugandan to industrialize the economy as a way of creating jobs , Uganda has still remained as one of the poorest and least industrialize countries in the world with a total GDP of 20 billion dollars as of 2012, (MoF, 2012), this has therefore a paused a question to the government officials as what could be the cause , this study therefore intends to investigate in to the the effect of taxes on local manufacturing industries, with specific reference to crown beverages ltd.
1.3. General objective of the study
The purpose of the study is to examine the effects of taxes on the development of local manufacturing industries.
1.4. Specific objectives of the study
- To find out the risks faced by local manufacturing industries.
- To establish the effects of taxes on local manufacturing industries.
- To find out the ways of minimizing taxation impacts on financial institutions.
- What are the risks faced by local manufacturing industries?
- What are the effects of taxes on local manufacturing industries?
- What are the ways of minimizing taxation impacts on financial institutions?
1.5. Scope of the study
This is the delimitation of the study. The researcher defined and made clear the scope of the study in terms of content, geographical as well as time or periodic scope. The content scope will involve the topic of study. The geographical scope will involve the area where the study will be carried out and lastly the time scope includes the period the study will take.
1.5.1. Content scope of the study
The study will include; the risks faced by local manufacturing industries, the effects of taxes on local manufacturing industries and the ways of minimizing taxation impacts on financial institutions?
1.5.2. Geographical scope of the study
The scope of the study will include, Crown beverages ltd located at plot M214 nakawa
1.5.1. Time Scope
Period of data consideration will be from 2000-2015, while period of body of knowledge is from 2012-2014.
1.6. Significance of the study
- The study will help different stakeholders (like investors) engaged in the banking sector to come up with polices that will improve its performance and service delivery.
- The study will help Crown beverages ltd to know whether there is a relationship between the level of interest rate and performance.
- The research will be used by other researchers carrying out a related study as a source of literature. In this case the research will act as a secondary source of data.
- The ministry of finance will get to know the different methods that can be used in controlling interest rates.
- The study will guide policy makers to come out with rules and regulations that will help the central bank in stabilizing interest rates.
LITERATURE REVIEW.
The purpose of the study is to examine the impacts of interest rates on the performance of microfinance institutions. Theoretical perspectives related to this topic have been reviewed and are presented in this chapter. The review is organized according to the study objectives below
2.1. Risks faced by local manufacturing industries.
Credit risk
Credit risk is incurred by lender when giving out liquidity. Although the creditworthiness of the borrower may be good – usually only the more creditworthy borrowers have access to the loan market – the inherent credit risk will tend to be higher where the tenor of the obligations is longer and the total size of the credit extended to the borrower is relatively large, This is particularly true in cases where the deal amount goes up simply because of over-subscription for the loan transaction.
Regardless of their extent of participation, lenders should not rely solely on the credit appraisal prepared by the arranger. Each member should perform its own independent analysis with respect to the credit quality of the borrower and the suitability of the deal in relation to its own risk, (Ray, 2008).
Market risk
The level of market risk in syndicated lending depends on the level of the big financial player’s involvement in a deal. AIs acting as underwriters are subject to market risk because, although they intend to sell all or part of their participations, they may end up with an unsold portion on their books for a period of time pending eventual sale, particularly if: due to unforeseen circumstances, the borrower’s financial condition deteriorates to such an extent as to affect an underwriter’s ability to distribute the unsold portion; or
Market interest rates move adversely. As the majority of syndicated loans are priced on a floating-rate basis, this would be relevant in respect of: fixed-rate deals; or situations where market spreads widen after a syndicated transaction is concluded. This would render the deal unattractive to potential lenders.
It is usually the case that the period between underwriting and completion of syndication is relatively short and the extent of the risk is therefore limited. Nevertheless it is customary to cater for this risk by “material adverse change” or “force majeure” clauses in the documentation, covering market disruption or deteriorating credit circumstances, which would enable underwriters to restructure or cancel a deal.
AIs should have policies and procedures to cater for such situations, including documentation standards, hedging for interest rate and credit risks (e.g. by use of derivative instruments), if appropriate, and reporting to senior management on any significant unsold sticks, (Behman et al, 2005).
Interest rate risk
Depending on how a deal is priced and funded there may be different degrees of interest rate risk. It is incurred by lending institution which has provided lending commitments under legally binding documentation. Is should ensure that such risk arising from syndicated lending activities is properly managed at the product level or integrated into their overall interest rate risk management process. The handling of such risk is usually the responsibility of the Treasury Department.
In general, microfinance should limit the extent to which floating rate deals are funded from fixed-rate sources and vice versa in order to minimize their interest rate risk.
Even if microfinance use floating-rate money to fund their floating rate lending, they should still limit the extent to which they run any basis risk that may arise if their lending and funding are not priced using precisely the same indices.
AIs should not let competitive pressures tempt them to underwrite syndicated lending at spreads which leave them no safety margin to absorb interest rate and other associated risks.
Subject to negotiation with the borrower, AIs may make use of prepayment clauses as a safeguard against any loss incurred in the redeployment of funds. Standard documentation normally provides for prepayment to be made only on interest payment dates and subject to 30 or 60 days’ prior written notice which generally give AIs adequate time to redeploy funds. AIs may also incorporate a provision that allows them to claim for losses resulting from the prepayment of funds before the end of a given interest period, i.e. where the prepayment does not correspond to a rollover or repayment date.
Microfinance institutions may consider balancing cash flows and managing the interest rate risk through hedging, e.g. using swaps or other derivative instruments, (Amha, 2000)
Liquidity risk
As a matter of prudent management, financial institutions should manage their liquidity positions as a whole by limiting the amount of longer term syndicated lending and other types of long-term lending (e.g. residential mortgage loans) to a conservative percentage of their stable funds so as to avoid creating significant maturity mismatches.
Financial institutions can reduce their exposure under syndicated transactions and better manage their liquidity positions through subsequent loan sales in the secondary market. To facilitate this, financial institutions should ensure that the documentation contains transferability provisions enabling them to assign their rights by such sales. Financial institutions should avoid relying excessively on short-term deposits to fund long-term loans,(Dejene, 2003)
Operational risk
Operational risk in syndicated lending is incurred by the lenders but it also affects the agent as the latter is responsible for handling certain aspects of credit administration. Errors due to oversight or negligence, e.g. in giving timely advice to syndicate members, in arranging drawdown’s, in refixing interest rates or in effecting interest and principal payments to syndicate members, can be costly in terms of both monetary compensation and reputation.
AIs taking on the role of agent should ensure that their systems are adequate and their staffs are capable of carrying out their role efficiently. They may be required to compensate syndicate members if, for example, funds are disbursed late or to the wrong parties. They should also cater for counterparty risk on settlement of payments,(Norel, 2001).
Legal risk
Legal risk is incurred by underwriters, lenders and the once the documentation is signed.
Because of the scale, term and complexity of syndicated lending, with multiple parties involved, legal arrangements need to be as watertight as possible. Experienced staff of the arranger should work closely with legal counsel to ensure that the interests of lenders are adequately protected. This should be by negotiating with the borrower to ensure that appropriate and enforceable covenants are included in the information memorandum and that they are reflected in the syndicated loan agreement along with suitable protective clauses. All relevant documentation should be circulated to syndicate members for review and comment before such documentation is signed. It is up to prospective lenders to decide whether those covenants are adequate and in
If a high profile deal encounters problems, it is primarily the reputation of the arranger of the deal that suffers.
There may also, however, be some effect on the reputation of ordinary syndicate members. Syndicated lending tends to have a higher public profile and it is more difficult to control the information flow when there are multiple lenders. AIs, whatever their role or level of involvement in a deal, should have arrangements in place and experienced staff assigned to handle corporate communications in relation to syndicated lending. There will need to be a degree of coordination among various syndicate members so that media relations can be handled effectively As it is also in the borrower’s interest that media relations are handled effectively, financial institutions acting as arrangers should coordinate with the borrower to ensure that there is a mutually satisfactory approach for dealing with media inquiries, (Ray, 2008)
Strategic risk
Financial institutions should consider whether the projected extent of their
Involvement in syndicated lending is compatible with the overall strategic goals of the organization and whether they have the requisite resources to achieve targets set for this activity, (CGAP, 2010).
2.2. Effects of taxes on local manufacturing industries.
Many countries have established interest rate ceilings to protect consumers from unscrupulous lenders. Governments often also face political or cultural pressure to keep interest rates low. Despite good intentions, interest rate ceilings generally hurt the poor by making it hard for new microfinance institutions (MFIs) to emerge and existing ones to stay in business.
In countries with interest rate caps, MFIs often withdraw from the market, grow more slowly, become less transparent about total loan costs, and/or reduce their work in rural and other costly markets. By forcing pro-poor financial institutions out of business, interest rate caps often drive clients back to the expensive informal market where they have no or little protection.
Research argues that establishing a lending relationship with a bank can reduce asymmetries of information and create value to the borrower. This value can move in the form of reduced interest rate for loans (Jiangli, 2004).
As a result banks and borrowers form long-term relationships and such relationships have a positive value to both borrowers (it enables them to obtain lower interest rates on loans) and lenders (long-term relationships enables them to have valuable information about the borrowers) (Mutl, 2002).
According to Machauer and Weber (1998), a binding relationship is achieved in a monopoly situation, for example when the bank is the only financier of borrowers in a certain region. Similarly, building up an information advantage during a relationship enables the bank to assess borrower risk more accurately than competing banks and thus offer lower loan prices to low risk companies than any other competitor.
Farinha and Santos (2000) noted that longer relationships have a mixed impact on the interest rate charged. The length of a bank-firm relationship significantly increases the loan rate. That is a firm having a longer financial relationship, pays a higher interest rate on its loans. Similarly the duration of a bank-borrower relationship affects interest rates (Boot &Thakor, 1994) and a stronger relationship in terms of longer relationship duration reduces loan interest rates (Arano&Breit, 2007). Whereas on the other side Petersen and Rajan (1994) noted that only firms with multiple banking relationships pay higher interest rates than those with a single relationship.
They also provide empirical evidence on the effects of bank-borrower relationship on loan pricing for small firms. Berger and Udell (1995) analyzed the same data set with significant results. They discovered that small firms with longer banking relationships borrow at lower rates. Consequently when a firm buys other products or performs most of its transactions from that bank, the interest rate on the loan significantly decreases (Degryse&Cayseele, 1998).
Suwanaporn (1996) also recognized that the ability of a bank to privately observe proprietary information about the borrower can cause a lock-in problem. In that the borrower cannot at a low cost transfer to another lender what the bank already learned about it, which creates a switching cost for the borrower. The incumbent bank then gains monopoly power over the borrower through its informational advantage over competitors and which may be the reason for some banks to continually charge higher interest rates. Therefore relationship lending is a multi dimensional concept according to Degryse&Cayseele, (1998).
2.3. Ways of minimizing taxation impacts on financial institutions.
Microfinance institutions provides a range of services to the local people as they are mostly located in rural areas and most of them work under the various objectives; foristance providing access to funds to the poor, encouraging entrepreneurship and Self-Sufficiency, managing risks mostly in business, empowering women by giving them loans so as to participate in the business sector and lastly providing community-wide benefits.
To protect consumers from predatory lending, governments may pass consumer protection laws or schemes. Such strategies provide a desirable safeguard without the negative effects of interest rate ceilings. Consumer protection laws generally cover a set of non-prudential regulations, including mandatory disclosure on total loan costs; clearly defined complaint resolution procedures; consumer education to prevent abuse; and effective enforcement mechanisms. Public disclosure of loan costsallows borrowers to comparison-shop for loans, stimulates competition among lenders, and compels them to become more efficient to stay in business (Gray et al, 1966).
All MFIs are able and willing to disclose their interest and fee costs to customers. Although disclosure is generally beneficial, it is not devoid of risk because it may draw political backlash due to the relatively high interest rates in microfinance.
Disclosure is required in most developed countries as well as in some South American countries, such as Peru, Bolivia, and Colombia. In South Africa, the government has mandated the Micro Finance Regulatory Council (MFRC) to protect consumers and regulate microfinance institutions. The MFRC requires full disclosure of loan costs, offers a consumer complaint process, and runs consumer education campaigns on micro lending. While microcredit interest rates will nearly always be higher than commercial bank rates, greater efficiency, scale, and competition can lead to lower interest rates(Gray et al, 1966).
In Bolivia, BancoSol’s effective interest rate (interest+ fees) was 65% per year when it began operations in 1992 with 4,500 clients. Today, in a highly competitive market and with 55,000 clients, its annual interest rate is 22%. In Cambodia, in its relatively new but highly competitive microfinance market, interest rates have dropped from around 5% to 3.5% per month over the past few years. In some provinces where MFIs are particularly active, moneylenders have dropped their rates to match those of the MFIs (Katarikawe et al, 1999).
Inform and educate policy makers. Donors engage with government policy makers in many ways. They organize in-country seminars about microfinance and appropriate interest rates and/or fund the attendance of policy makers at international microfinance training programs. Donors also bring in policy makers from similar countries with appropriate microfinance policies.
Support transparency and standard reporting, including an emphasis on efficiency. Donors require that financial institutions use effective performance monitoring systems and transparent financial reporting that include efficiency indicators. Well-designed performance monitoring systems enable MFIs know their costs and take steps to streamline their procedures for efficiency gains. As MFIs become more efficient, they are able to lower their interest rates (Katarikawe et al, 1999).
Donors also support national microfinance networks’ efforts to introduce industry-wide systems, standards, benchmarks, and promote the use of ratings and external audits. Standardized and transparent financial reporting sets the stage for full public disclosure of lending costs, and helps identify the full costs of making loans as well as any inefficiencies (Katarikawe et al 1999).
Foster competition and growth. Donors foster competition by financing diverse types of institutions that offer financial services to the poor. Increased competition will often lead to lower interest rates throughout a microfinance industry. Donors can also support MFIs to achieve greater outreach and grow so that they can benefit from economies of scale and lower their interest rates over time (Alexander et al, 1996)
Top of Form
Excessive interest rate volatility can discourage the development of domestic money markets and forward foreign exchange markets; reduce the policy information content of interest rate movements and adversely affect the transmission mechanism from short-term to long-term interest rates and the health of the financial sector (Alexander et al, 1996).
RESEARCH METHODOLOGY
This section presents basically the techniques and procedures that will be employed while carrying out the study. The chapter includes; research design, sampling design, data collection instruments, analysis of the variable of the study, measurement of the study and data collection procedures.
The researcher will undertake the study using cross-sectional research design in nature and this will help in collecting data from a wide section of study respondents of Crown beverages ltd. A cross-sectional design is the one that is carried out at one point in a time. It aims at assisting the behavior of a phenomenal at the moment (Amin, 2005).
The study mainly will be quantitative in nature though some aspects of the study will be presented as qualitative data. This qualitative data will enable the researcher in depth analysis of the study findings.
Qualitative research design will be used to study things in their natural settings, attempting to make sense of, or to interpret, phenomena in terms of the meanings people bring to them.Quantitative research is a formal, objective, systematic process in which numerical data are used to obtain information about the world.
Quantitative design will be used because it provides an excellent way of finalizing results and proving or disproving a hypothesis, provides a comprehensive answer after statistical analysis of the results is reached, and the results can be legitimately discussed and published.
The researcher will carry out the study among the staff members of Crown beverages ltd at Mukono branch. The study will consist of 5 accountants, 5members from the procurement department, and the rest of the members from the junior employees.
Table 1: Showing targeted population and sample population as postulated by Morgan table (1970).
| Category | Sample size | Sampling method |
| Accountants | 05 | Purposive |
| Procurement | 05 | Purposive |
| Junior employees | 20 | |
| Total | 30 |
The sampling method that the researcher will employ while carrying out the study is purposive / judgmental sampling techniques. This will be used for all the respondents (customers and staff). This will be without bias because the data to obtain from the population have almost homogeneous characteristics.
This method of sampling will be used by the researcher because it excludes people who are unsuitable for the study and remains with those most with the right information. It is less time consuming, reduces the costs for carrying out the sampling project, the results of purposeful sampling are usually expected to be more accurate than those achieved with an alternative form of sampling.
3.3. Data collection methods and instruments
The researcher will use a number of instruments in collecting data. The quantitative instruments include;
The researcher will collect data from respondents using questionnaires especially those who are inaccessible on some days. The researcher will design these questions basing on the objectives of the study. The questionnaire will be the major tool to use during the study. Both open and closed ended questionnaires will be designed and used for the study.
Both structured and unstructured questions will be used. Questionnaires are more liked for this study because; it is generally relatively quick to collect potential information from a large portion of a group and respondents are elite and can easily read and interpret questions. And return rates can be dramatically improved if the questionnaire is delivered and responded to in the right time. Qualitatively the researcher intends to use structured interviews such that deeper analysis of the study variables can be done.
The researcher will also collect data from respondents using structured interview in order to avoid bias in the findings of the field study. The researcher thus will formulate an interview guide to avoid the cases of having irrelevant questions asked by the respondents. In this case, Structured Interviews (oral) will be used on people who lack good reading or writing skills mostly the illiterate in case they are found among the customers. These interviews are intended to supplement on the responses filled in by the respondents using Questionnaires.
The researcher will get data from two sources;
Primary source
The researcher will gather data by using questionnaires and interviews. This will help the researcher to get first hand, raw data that has never been acquired by any one for the same purpose. This will be done with the staff members of Crown beverages ltd.
Secondary source
Secondary information sources are data neither collected directly by the user nor specifically for the user. It involves gathering data that has already been collected by someone else.
The researcher will use the existing literature to relate with the data gathered from the field. Secondary data will be got from reading related research study, magazines, and journals, among others.
The researcher will analyze such materials as textbooks, newspapers, magazines and articles that will be found at the study area, whenever provided. These will supplement the data collected using the methods of data collection of interviewing and questioning
According to Mugenda and Mugenda 2003, validity refers to the degree to which results obtained from the analysis of the data actually present the phenomenon under study. To ensure validity, data collection instruments will be discussed with the supervisor, lecturers and colleagues.
The tools will also be pre-tested for accuracy before the study. This stage reveals the suitability of the methods and instruments that were employed in the study. This consequently led to early detection of errors and distortions in the questionnaire which are corrected before the process of collecting data. This will help the researcher to familiarize herself with the research environment and also offer the opportunity to practice research in real situation before the main study begins. The formula for validity is indicated below;
Content Validity Index (CVI) = Number of items rated relevant
Total Number of items in the instrument
3.5. Procedure of data collection
The researcher will get an introductory letter from the dean of faculty. This will help the researcher to embark on the process of data collection. The researcher will seek for permission from the Management of Crown beverages ltd to enable him to carry out the research from the selected sections. The researcher will proceed to the field and administer the questionnaires and interviews to the target group. The researcher will assure respondents of confidentiality by telling them not to include their names on the questionnaires since respondents tend to be reluctant to supply information in sensitive matters. The questionnaires will be administered by the researcher, filled by respondents and returned to the researcher there and then. The researcher will use observation to gauge the general picture of the bank’s environment in relation to performance.
Prior appointment with the interviewees will be made. The researcher will write down responses of interest from oral interview. The researcher will take confidentiality as key while carrying out all the research activities. The researcher will ensure that all the research materials are used for the purpose of academic issues.
3.6 .Data presentation and analysis.
The data to obtain from the field of study will be organized, sorted, tallied and presented in tables and analyzed using figures as well as percentages through Microsoft Excel; this will contain majorly quantitative data. The data will be edited before leaving the respondents. The researcher will checked for uniformity, accuracy, legibility and comprehensibility and then code and tabulate the findings.
Data analysis will be based on a number of responses or scores on each particular item. The more or the higher the scores or responses the stronger the conclusions on each study.
3.7 Anticipated Limitations of the Study
The researcher anticipates encountering the following limitations of the study.
- Financial constraints due to insufficient funds for transport and accommodation expenses while in the field collecting data, typing of research materials. Such problems can delay the completion of the course. To overcome this, the researcher will secure some funds from relatives and friends.
- The researcher will find it difficult to distribute the questionnaires and collect data in the same day. To overcome this, the researcher will distribute and collect questionnaires on different days.
- Some respondents may interpret the researcher to be on fault finding mission. To overcome this suspicion, the researcher will Endeavour to move with university identity card, an introductory letter from the university and will explain to the respondents the purpose of the research.
REFERENCES
Alexander, W et al (1996). Adopting Indirect Instruments of Monetary Policy, Finance and Development, March 1996
Axilrod, S.(1997). Transformations to Open Market Operations – Developing Economies and Emerging Markets, Economic Issues (5), International Monetary Fund Bank of Uganda, Various Annual Reports.
Arano, R. &Breit, R,(2007).Making Sense of Microcredit Interest Rates. Donor Brief No. 6.Washington DC: CGAP.
Berger, K and Udell Y,(1995). Commercial Banking Crises in Kenya: Causes and Remedies. Global Journal ofFinance and Banking Issues, 3(3), pp 67.
Boot, C. &Thakor, K, (1994). An Analysis of Interest Rates in the Informal Rural Credit Market of Sri Lanka. Staff Studies. 15 (1&2): 29–41. Colombo: Central Bank of Sri Lanka.
Caprio, Jr. (Eds), (1999). Monetary policy instruments for developing countries: a World Bank symposium.
Cohen, et al, (1996).Banking Sector Interest Rate Spread in Kenya. Macroeconomic and EconomicetricModeling.Kenya Institute for Public Policy Research andAnalysis (KIPPRA) Discussion Paper No 5, 6-8
Degryse M &Cayseele T, (1998).Commercial Bank Net Interest Margins, Default Risk, Interest-Rate Risk and Off-Balance Sheet Banking.Journal of Banking and Finance, Vol. 21, 55–87.
Debelle, G. and Masson, P. and Miguel, S. and Sunil, S. (1998). Inflation Targeting as a Framework for Monetary Policy, Economic Issues (15), IMF Publication.
Farinha, K. and Santos, L, (2000). Determinants of borrower drop out in microfinance: an empirical investigation in Mali”.
Gray,S. and Hoggarth, G, (1966). Introduction to Monetary Operations, Handbooks in Central Banking, No. 10, Centre for Central Banking Studies, Bank of England.
Gambacorta, K, (2004). Why is Interest Rate Spread High in Fiji? Results from a Preliminary Study.FijianStudies, 1(1), 45-67
Honohan, P et al, (1995). The use of market instruments for monetary policy, in: Honohan
Jiangli, H, (2004). An Empirical Analysis of Interest Rate Spread in Kenya. African Economic Research Consortium, Research Paper 106
Katarikawe, M. and Sebudde, R. (1999). Is the Reserve Money Programme still a useful operating framework for the conduct of monetary policy in Uganda? Bank of Uganda Staff Papers, Volume 1, 1999.
Mutl, F, (2002). “Drop-outs and Graduates: Lessons from Bangladesh”. – The Micro-
banking Bulletin, Washington, D.C. Issue no. 6pp. 14-16.
Machauer, S and Weber P, (1998). “Client Exit in Microfinance : A conceptual Framework with Empirical Results From Mali”. CSAE Conference : Growth, Human Capital, and Povert Reduction in Africa.
Norden, P and Wagner, K, (2008).Small bank loan quality in a deregulated Environment: The Information Advantage Hypothesis. Journal of Economics and Business, 53, 325-339.
Ncube, M, (1997). Financial systems and the effectiveness of monetary policies in African countries, a summary presented by AERC at the UNECA Meeting of Intergovernmental Group of Experts, March 25-28, 1997, Addis Ababa.
Petersen, M and Rajan, N, (1994). Loan-loss experience and risk-taking behavior at large commercial banks.Journal ofFinancial Services Research, 5, 43-59.
Robinson, K, (2001).Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence. Washington, D.C: World Bank PolicyResearch Working Paper No. 1900.
Suwanaporn, M, (1996). The Yin and Yang of Microfinance: Reaching the Poor and Sustainability. Microbanking Bulletin, July 1998,pp 45.
