Living standards improved considerably in Australia during the 20th century. Households were inc reasingly able to overcome liquidity constraints and purchase an ever greater number and range of consumer durables, including furniture, refrigerators, washing machines, radios, televisions and cars. These were often items for which they lacked finance in terms of current income and/or accumulated savings. Still, households were able to purchase them, due to the increasing availability, accessibility and affordability of consumer credit.
Formal consumer credit grew quickly in Australia after World War II as a major source of finance for the purchase of goods and services for which to households and individuals lacked funds. Per head of the population, the level of consumer debt amounted to A$233 in 1950, increasing more than tenfold to over A$4,500 in 2007 (in 1989/90 prices). Just after the war, hire-purchase companies were about the only source of formal consumer credit. Today, anyone wishing to borrow money for the purchase of goods and services can choose from a wide range of financial institutions for a loan on conditions that suit the borrower best.
Managerial market timing refers to a manager’s actions which directly intend to capitalize on a temporary mispricing of a security, in particular through issuing overvalued securities and repurchasing undervalued securities. In terms of the debt market, it refers to any debt issuance associated with market conditions which suggests a low cost of capitalization. A number of survey studies (e.g. Graham and Harvey (2001) and Bancel and Mottoo (2004)) discover that managers attempt to time the debt market during their debt issuance decisions and pick opportune moments, notably when interest rates are particularly low. Furthermore, there have also been a number of empirical studies which have examined the true ability of firms to time the debt markets. Baker et al. (2003) document that, at the market level, the long-term share of aggregate debt issuance once correlated to yield curve movements, can predict the excess returns of the debt market.
Since the 1990s alleviating poverty has been the top priority in international development. Within this framework various initiatives have already been taken. One particular strategy in tackling poverty has generated tremendous enthusiasm among aid donors and NGO’s: the provision of small loans through micro-credit programmes. Bangladesh, one of the poorest countries in the world, is the cradle of this ‘micro-credit movement’. Grameen Bank enjoys international fame and its model has been replicated in countries all over the world. Likewise the Bangladesh Rural Advancement Committee (now called: BRAC) is showing success as one of the largest NGO’s in the world.
