Articles

Articles

Reforming the collateral framework in developing countries

Reforming the collateral framework in developing countries

In summary, our study shows that reforming the collateral framework in order to allow firms to use movable assets as collateral can have significant effects on access to credit and real economic activity. We believe our results are markedly important for policymakers in developing countries, who do not have control over collateral values or their supply in secondary markets, yet can alter collateral menus as a way to enhance financial contractibility.

Credit Risk & Scoring