Analysis of the research

“Do Psychological and

Spiritual Factors Affect
Economic Decision"
F-307 Analysis of Financial Investments
Mahbuba Hasan Hridi
ID: 26-245
FACTORS AFFECTING ECONOMIC DECISIONS

Rational
Social Influences Calculation

Economic
Decisions

Personal Belief
Emotional
Response
 Idea of The Research Paper
Context: Ramadan

Country: Turkey

Subjects: Banks and loans originated by them

The research paper intends to find whether these factors affect economic decisions

Psychological

Biological
Cognitive
Impulse and
limitations
Needs

Spiritual

Values and Long Term Philanthropy

Ethics Perspective & Altruism
Rizwana Rehnuba Alam
ID: 26-155
 Loan Risk and Loan Officer Judgement

Ramadan loans have higher

default rates in case of
Small business loans unsecured loans Decline in the quality of loan
originated during Ramadan officer decision
are less risky
 Role of Religion

0.3% reduction in the no. of The interaction term between

daily approved loans Ramadan and past client indicator
is positive

More inclined to approve Financially weaker banks avoid

charitable loans charitable lending
Nowrin Sharmili
ID: 26-152
Key Findings in Research

1.Loan
originated 3.Ramadan 4.The
2.Small
during have no Ramadan
business loans
Ramadan effect for effect and its
originated in
perform personal statistical
the month of
worse than loans and significance
Ramadan are
loans large increases with
more likely to
originated business branch
default
outside of loan business
Ramadan.
 Other Findings in Research

1.Ramadan effect is greater 2.Zakat and other practices

for loans originated on more during Ramadan influence
challenging hot and long loan officers’ values and
summer days fasting belief

3.Borrower financial strength

, past bank –borrower 4.Longer Ramadan fasting
relationship are not primary leads to lower output growth.
drivers of Ramadan effect
Tumpa Chowdhury
ID: 26-072
Implications of the research on Turkish Banks
during Ramadan
Major implications
 Ramadan Effect being economically high with
a default rate ranging from12% to 17%

 Lower credit spread VS delinquency

 Welfare effect seems unclear

 Spiritual channel over physiological

constraints
 Implications of the research on Turkish Banks
during Ramadan

 Welfare implications
 Higher delinquency
 Fasting and heat
but lower spread  Physiological and spiritual
leads to lower
supports moral factors do impact economic
productivity and decisions
reasons
default risk  Religion as determinant of
charitable lending
Sadia Afroz Ishaan
ID: 26-094
 Bangladesh Context for Analysis
Economic and Financial
01 System Differences

Turkey Bangladesh
Banking Practices Well-developed Less-developed

Lending Regulations More liberal More conservative

• Diversified • largely agricultural

• Industrialized • Export textile focused
Business Environments • Competitive environment • More challenging
• More opportunities environment

Stable but
Economic Stability Fluctuates Poverty and infrastructure
challenges
 Significance of
Ramadan
Religion Ramadan influences both
country’s religious practices,
Both are Muslim Majority level of significance may differ

Psychology Zakat
Spiritual values and
Differs as income levels,
beliefs during Ramadan poverty rates, and the
may differ organizational structures of
charitable institutions differ

Cultural similarities
02 and differences
Socioeconomic Factors 03

Lower average income

Income Levels level compared to Turkey

improving, but access to formal

banking and financial services
Access to Financial still limited, particularly in
rural areas
Services Turkey - well-established
banking sector

urban centers having better

Urban-Rural Divide economic opportunities and
access to resources.
Turkey – More balanced
Mst. Murshida Khatun
ID: 26-180
Applicability of the paper in Bangladesh

 Not really applicable in the context of

Bangladesh

 Conservative lending regulations

 More strict on personal loans than businesses

Thank you