Prioritization of factors affecting the provision of credit services to applicants for local letter of credit as a solution for the financial development of commercial banks

Document Type : Original Article

Authors

• MOHAMMAD HOSSEIN Hadavi ¹
• Behrooz Ghasemi ²
• SOHEIL SARMAD SAEIDI ²

¹ PhD student of Marketing Management, Department of Business Management, Central Tehran Branch, Islamic Azad University, Tehran, Iran

² Assistant Professor, Department of Business Management, Central Tehran Branch, Islamic Azad University, Tehran, Iran

https://doi.org/10.22067/mfe.2023.75894.1181

Abstract

Financial development in banks, as the most important pillar of Iran's financing system, requires identifying business opportunities and facilitating the exchange of goods and services through diversification of financing methods and focusing on improving the effectiveness of the resource allocation system with the aim of attracting Customer satisfaction.
Achieving these goals requires the use of integrated management systems that simultaneously focus on financial, marketing and decision-making issues. Credit solutions such as inland letters of credit are especially important in the field of indirect provision of funds needed for those active in industrial markets, which are referred to industrial customers.
In this research, based on the grounded theory methods and the multi-criteria decision-making combined approach, the criteria for segmenting industrial customers applying for inland letters of credit and the internal and external factors affecting the development of services to this group of customers were prioritized. The findings of the research show that if the bank focuses on eliminating the weaknesses in the system in order to take advantage of significant environmental opportunities in the business environment of customers, it will have a smoother path for financial development and the realization of its financial goals and policies.

Keywords

• Financial development
• local letter of credit
• industrial marketing
• Fuzzy analytic hierarchy process
• Grounded theory

References

Abbasi, G. (2009). Convergence between financial development and industrial production in iran. Quartery Journal of Economic Modeling, Vol. 3, Issue 7, Serial Number 7, PP. 137–154. (in Persian)

Abounoori, A. & Teimoury, M. (2013). Investigation of the effect of financial development on economic growth: A comparative study in OECD and UMI countries. Quarterly Journal of Economic Growth and Development Research, 3(11), pp.29-40. (in Persian)

Aboutorabi, M. A.; Falahi, M. A.; Salimifar, M., & Hosseini, S. M. (2016). The Effect of Government Ownership of Banks on the Causality of Finance- Growth in Iran. The Economic Research, 15(4), 99-126. (in Persian)

Altınırmak, S.; Şahin, C.; Karamaşa, Ç., & Okoth, B. O. (2020). Participative Banking in Turkey: A Performance Analysis. In Growth and Emerging Prospects of International Islamic Banking (pp. 141-154). IGI Global.

Ansari, S. M., & Ali, M. A. (2021). The Impact of Technology on the Marketing of Financial Services in SBI Bank Customers. (in Persian)

Botev, J.; Égert, B., & Jawadi, F. (2019). The nonlinear relationship between economic growth and financial development: Evidence from developing, emerging and advanced economies. International Economics, 160, 3-13.‏

Dinçer, H.; Yüksel, S., & Tamara, I. (2019). Strategy Selection for Organizational Performance of Turkish Banking Sector with the Integrated Multi-Dimensional Decision-Making Approach. In Handbook of Research on Contemporary Approaches in Management and Organizational Strategy (pp. 273-291). IGI Global.

Elsayed, A. (2017). Evaluating Customer Satisfaction By Using Fuzzy Analytical Hierarchy Process For Banking Services, International Journal of Industrial Engineering Research and Development, Volume 8, Issue 1, PP. 27-48.

Farasatkhah, M. (2020). Qualitative research method in social sciences with emphasis on (based theory) (Seventh Edition), Agah Publications, Tehran. (in Persian)

Ghenimi, A.; Chaibi, H., & Omri, M.A.B. (2017). The effects of liquidity risk and credit risk on bank stability: Evidence from the MENA region., Borsa Istanbul Review, 17(4), 238-248.‏

Guash, P.K. (2016). Industrial Marketing, translated by Rousta, A., Heidarzadeh, K., Shojaei, N., Commercial Publishing Compan, Tehran.

Hadavi, M.H., & Mirabi, V.R. (2017). Prioritizing SWOT factors using hybrid model of BSC, SWOT, Fuzzy AHP and Fuzzy TOPSIS techniques developed for use in a large Iranian commercial bank. International Academic Journal of Business Management, 4(4), 53-70. (in Persian)

Heydari, H.; Haghighat, J.; Karimi Takanlo,Z. & Ranjpour, Reza (2020). Providing a Solution for Managing the Interest Rate of Iranian Bank In the Context of Development and Financial Repression Theories., Quarterly Journal of Economic Growth and Development Research, 10(38), 31-44. (in Persian) 

Hosseini Hashemi, B. (2017). The three reasons for the lack of liquidity of banks, Bankers 24 website, http: //banker.ir/, news code: 190842. (in Persian)

https://www.codal.ir/ReportList.aspx?search&Symbol=%D9%88%D8%A8%D8%B5%D8%A7%D8%AF%D8%B1&LetterType=-1&FromDate=1400%2F01%2F01&ToDate=1401%2F08%2F26&Isic=571920&AuditorRef=-1&PageNumber=3&Audited&NotAudited&IsNotAudited=false&Childs=false&Mains&Publisher=false&CompanyState=0&Category=-1&CompanyType=-1&Consolidatable&NotConsolidatable, Interpretive report of the management of Saderat Bank of Iran for the financial period ending on 1400/09/30. (in Persian)

Ismailnia, M. (2010). From common to non-common incomes in banking today, World Economy Newspaper, No. 2275.C6. (in Persian)

Keyghobadi, M.; Pahlavani, M., & Hosseinzadeh, R. (2021). Spillover Impacts of Financial Development on Regional Economic Growth: A Spatial Econometric Approach. Journal of Development and Capital, 6(1), 19-32. (in Persian)‏

Khaki, G. (2010). Research Method with an Approach to Dissertation Writing, (Sixth Edition), Bazetab Publishing, Tehran. (in Persian)

Khalili Iraqi, M.; Barkhordari, S., & Gallavani, A. (2020). The Impact of Financial Development on Monetary Policy Efficiency and Inflation Targeting., Quarterly Journal of Economic Growth and Development Research, 10(39), 15-28. (in Persian)‏

Kotler, P. (1988). Marketing Management: Analysis, Planning, Implementation, and Control, (Sixth edition), Prentice-Hall International Edition.

Kotrlik, J. W. K. J. W., & Higgins, C. C. H. C. C. (2001). Organizational research: Determining appropriate sample size in survey research appropriate sample size in survey research. Information technology, learning, and performance journal, 19(1), 43.

Krishna, K., & Havaldar (2016). Industrial Marketing, translated by Abdolvand, M. A., Nikoo Maram, H., Islamic Azad University - Science and Research Branch, Tehran. (in Persian)

Kumar, M., & Gupta, S. (2020). Security Perception of E-banking Users in India: An Analytical Hierarchy Process., Banks and Bank Systems, 15(1), 11.

Mehregan, M. R. (2016). Advanced Operations Research, (Ninth Edition), University Book Publishing, Tehran. (in Persian)

Mollaahmetoğlu, E., & Akçalı, B. Y. (2019). The missing-link between financial development and economic growth: Financial innovation. Procedia Computer Science, 158, 696-704.‏

Momeni, F.; Shakeri, A.; Taherpoor, J., & Ezati, E. B. (2021). The Impact of Private Banking on The Economic Production in Iran. (in Persian)

Office of Studies and Regulations of the Central Bank of the Islamic Republic of Iran, (2015). Instructions for Internal Credit-Rials, Central Bank of the Islamic Republic of Iran. (in Persian)

Seyed Javadin, R., & Esfidani, M.R. (2020). Industrial Marketing (Fifth Edition), Negah Danesh, Tehran. (in Persian)

Taherpoor, J.; Mohammadi, T., & Fardi Kalahrodi, R. (2019). The Influence of Banking Facilities Distribution on Iran’s Economic Growth; By Emphasis on Incorporating & Exchanging Contracts. Islamic Economics Studies Bi-quarterly Journal, 12(1), 151-176. (in Persian)

Thac Dang, V.; Wang, J., & Van-Thac Dang, W. (2019). An Integrated Fuzzy AHP and Fuzzy Approach to Assess Sustainable Urban Development in an Emerging Economy, International Journal of Environmental Research and Public Health, 16(16), 2902.

Valipour Pasha, M. (2014). Liquidity Risk Management in Banks, A Conceptual Framework, Ravand Quarterly, Year 21st., Numbers 65 and 66, Spring and Summer, Pages 222-201. (in Persian)

Vukotić, S.; Aničić, J.; Zakić, N., & Petrović, Z. (2015). The Role of Marketing and Brand in Banking (Jpmnt)”, Journal of Process Management- New Technologies, International, 3(4), 76-83.

Wanke, P.; Azad, A.K., & Emrouznejad, A. (2018). Efficiency in BRICS banking under data vagueness: A two-stage fuzzy approach, Global Finance Journal, 35, 58-71.

Wheelen, T.L., & Hunger, J.D. (1995). Strategic Management and Business Policy, (Vol. 55). Boston: pearson.

Xuan Cuong, D.; Thi Hien, H., & Long, T. (2018). Multi-Criteria Decision-Making Model Evaluating the Performance of Vietnamese Commercial Banks, International Journal of Financial Research, 9(1), 132-141.

Yarmohammadi, R.; Azar, A., & Mesbahi Moghaddam, Gh. (2017). Identifying and Prioritizing Desirable Financial Criteria In the Islamic Capital Market Based on Resistance Economy’s Perspective, Islamic Economics Studies,9(2),87-116. (in Persian)