Arbeitspapier

Collateral and its substitutes in emerging markets' lending

Due to opaque information and weak enforcement in emerging loan markets, the need for collateral is high, whereas borrowers lack adequate assets to pledge as collateral. How is this puzzle solved? We find for a representative sample from Northeast Thailand that indeed most loans do not include any tangible assets as collateral. Instead, lenders enforce collateral-free loans through third-party guarantees and relationship lending, but also through modifying loan terms, such as reducing loan size. Guarantees are the relatively most important substitute, they reduce collateral requirements independently of relationship lending and they are more often used by formal financial institutions.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 3585

Klassifikation
Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
Thema
lending
financial institutions
collateral
guarantees
relationship lending

Ereignis
Geistige Schöpfung
(wer)
Menkhoff, Lukas
Neuberger, Doris
Rungruxsirivorn, Ornsiri
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2011

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Menkhoff, Lukas
  • Neuberger, Doris
  • Rungruxsirivorn, Ornsiri
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2011

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