IDEAS home Printed from https://ideas.repec.org/a/jfr/bmr111/v6y2017i4p26-39.html
   My bibliography  Save this article

The Effect of Suspended Salary Allowance on Business Loan in Saudi Arabia

Author

Listed:
  • Adlah A. Alessa
  • Wafa Fahad Alsaeed
  • Jamel Azibi
  • Aymen Ajina

Abstract

The research was carried out to study two factors; first the impact of suspended Salary allowance (about 20% of Saudi Salary per month) on borrowing loans from national and commercial Saudi's banks. Secondly, to analyze the effects of suspended Salary allowance on re-payment of the loans. This study established that most Saudi banks¡¯ customers should be well-aware of the influence of suspended Salary allowance on borrowing loans from banks and re-payment of the loans. It was noticed that the provision of loans to Saudi people after governmental action regarding suspended Salary allowance had a great impact on their businesses performance. The study also found that salary cuts together with other factors including high interest rates may be the most important causes of poor business performance.?

Suggested Citation

  • Adlah A. Alessa & Wafa Fahad Alsaeed & Jamel Azibi & Aymen Ajina, 2017. "The Effect of Suspended Salary Allowance on Business Loan in Saudi Arabia," Business and Management Research, Business and Management Research, Sciedu Press, vol. 6(4), pages 26-39, December.
    • Handle: RePEc:jfr:bmr111:v:6:y:2017:i:4:p:26-39
    as

    Download full text from publisher

    File URL: http://www.sciedupress.com/journal/index.php/bmr/article/download/12264/7685
    Download Restriction: no
    File URL: http://www.sciedupress.com/journal/index.php/bmr/article/view/12264
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Joe Peek & Eric S. Rosengren, 2005. "Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan," American Economic Review, American Economic Association, vol. 95(4), pages 1144-1166, September.
    2. Kashyap, Anil K & Stein, Jeremy C & Wilcox, David W, 1993. "Monetary Policy and Credit Conditions: Evidence from the Composition of External Finance," American Economic Review, American Economic Association, vol. 83(1), pages 78-98, March.
    3. Samuel Kobina Annim, 2011. "Sensitivity of Loan Size to Lending Rates: Evidence from Ghana's Microfinance Sector," WIDER Working Paper Series wp-2011-003, World Institute for Development Economic Research (UNU-WIDER).
    4. Annim, Samuel Kobina, 2009. "Sensitivity of loan size to lending rates: Evidence from Ghana’s microfinance sector," MPRA Paper 21280, University Library of Munich, Germany.
    5. Stephan Kohns, 2017. "Monetary Policy and Financial Stability," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(1), pages 17-18, 04.
    6. repec:ces:ifodic:v:15:y:2017:i:1:p:19307486 is not listed on IDEAS
    7. Mr. Wolfgang Bergthaler & Mr. Kenneth H Kang & Ms. Yan Liu & Mr. Dermot Monaghan, 2015. "Tackling Small and Medium Enterprise Problem Loans in Europe," IMF Staff Discussion Notes 2015/004, International Monetary Fund.
    8. Allen, Linda, 1988. "The Determinants of Bank Interest Margins: A Note," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 23(2), pages 231-235, June.
    9. Benjamin M. Friedman & Kenneth N. Kuttner, 1993. "Economic Activity and the Short-term Credit Markets: An Analysis of Prices and Quantities," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2), pages 193-284.
    10. Franz Heidhues & Gertrud Schrieder, 2000. "Rural development and financial markets in Romania," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(1), pages 16-32, February.
    11. Stephan Kohns, 2017. "Monetary Policy and Financial Stability," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(01), pages 17-18, April.
    12. Wolfgang Bergthaler & Kenneth H Kang & Yan Liu & Dermot Monaghan, 2015. "Tackling Small and Medium Enterprise Problem Loans in Europe," IMF Staff Discussion Notes 15/04, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stijn Claessens & M Ayhan Kose, 2018. "Frontiers of macrofinancial linkages," BIS Papers, Bank for International Settlements, number 95.
    2. David Martinez-Miera & Rafael Repullo, 2019. "Monetary Policy, Macroprudential Policy, and Financial Stability," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 809-832, August.
    3. Nieto-Carrillo, Ernesto & Carreira, Carlos & Teixeira, Paulino, 2022. "Giving zombie firms a second chance: An assessment of the reform of the Portuguese insolvency framework," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 156-181.
    4. Laura Blattner & Luisa Farinha & Francisca Rebelo, 2017. "When Losses Turn Into Loans: The Cost of Undercapitalized Banks," 2017 Papers pbl215, Job Market Papers.
    5. Leonardo Gambacorta & Paolo Emilio Mistrulli, 2014. "Bank Heterogeneity and Interest Rate Setting: What Lessons Have We Learned since Lehman Brothers?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(4), pages 753-778, June.
    6. Christian Osterhold, 2018. "Fear the walking dead: zombie firms, spillovers and exit barriers," Working Papers w201811, Banco de Portugal, Economics and Research Department.
    7. Agur, Itai & Demertzis, Maria, 2019. "Will macroprudential policy counteract monetary policy’s effects on financial stability?," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 65-75.
    8. C. Cahn & A. Duquerroy & W. Mullins, 2017. "Unconventional Monetary Policy and Bank Lending Relationships," Working papers 659, Banque de France.
    9. Diana Bonfim & Carla Soares, 2018. "The Risk‐Taking Channel of Monetary Policy: Exploring All Avenues," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 50(7), pages 1507-1541, October.
    10. Chen, Ting-Hsuan & Shen, Chung-Hua & Wu, Meng-Wen & Huang, Kuo-Jui, 2021. "Effect of shadow banking on the relation between capital and liquidity creation," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 166-184.
    11. Brissimis, Sophocles N. & Kamberoglou, Nicos C. & Simigiannis, George T., 2001. "Is there a bank lending channel of monetary policy in Greece? Evidence from bank level data," Working Paper Series 104, European Central Bank.
    12. Sandra Eickmeier & Boris Hofmann & Andreas Worms, 2009. "Macroeconomic Fluctuations and Bank Lending: Evidence for Germany and the Euro Area," German Economic Review, Verein für Socialpolitik, vol. 10(2), pages 193-223, May.
    13. Stefan Laséen & Andrea Pescatori, 2020. "Financial stability and interest‐rate policy: A quantitative assessment of costs and benefit," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(3), pages 1246-1273, August.
    14. Kapoor, Supriya & Peia, Oana, 2021. "The impact of quantitative easing on liquidity creation," Journal of Banking & Finance, Elsevier, vol. 122(C).
    15. repec:hal:spmain:info:hdl:2441/74362fq3f99s299n07e84dlcib is not listed on IDEAS
    16. Schüler, Yves S. & Hiebert, Paul P. & Peltonen, Tuomas A., 2020. "Financial cycles: Characterisation and real-time measurement," Journal of International Money and Finance, Elsevier, vol. 100(C).
    17. Zsolt Darvas, 2018. "Forecast errors and monetary policy normalisation in the euro area," Policy Contributions 28816, Bruegel.
    18. Cerutti, Eugenio M. & Obstfeld, Maurice & Zhou, Haonan, 2021. "Covered interest parity deviations: Macrofinancial determinants," Journal of International Economics, Elsevier, vol. 130(C).
    19. Chung‐Hua Shen & Hsing‐Hua Hsu, 2022. "The determinants of Asian banking crises—Application of the panel threshold logit model," International Review of Finance, International Review of Finance Ltd., vol. 22(1), pages 248-277, March.
    20. Valeria Venturelli & Andrea Landi & Riccardo Ferretti & Stefano Cosma & Elisabetta Gualandri, 2021. "How does the financial market evaluate business models? Evidence from European banks," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 50(2), July.
    21. Florin Bilbiie & Xavier Ragot, 2021. "Optimal Monetary Policy and Liquidity with Heterogeneous Households," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 41, pages 71-95, July.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jfr:bmr111:v:6:y:2017:i:4:p:26-39. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Simon Lee (email available below). General contact details of provider: http://bmr.sciedupress.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.