Arbeitspapier

The use of collateral in formal and informal lending

We offer a new test of the ex ante theory of collateral. Theory states that lenders rely less on collateral if they have better information about borrowers. We test this by contrasting the use of collateral between formal and - better informed - informal lenders in a developing financial market. Indeed, formal lenders rely about 40% more often on collateral than informal lenders, controlling for conventional determinants of collateral. Moreover, having better information about borrowers has implications within lender groups: formal lenders rely less on collateral with longer borrower-relationship and informal lenders rely less on collateral with shorter distance to the borrower.

Sprache
Englisch

Erschienen in
Series: Kiel Working Paper ; No. 1879

Klassifikation
Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Thema
collateral
informal lenders
private information
relationship lending
distance

Ereignis
Geistige Schöpfung
(wer)
Kislat, Carmen
Menkhoff, Lukas
Neuberger, Doris
Ereignis
Veröffentlichung
(wer)
Kiel Institute for the World Economy (IfW)
(wo)
Kiel
(wann)
2013

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

  • Kislat, Carmen
  • Menkhoff, Lukas
  • Neuberger, Doris
  • Kiel Institute for the World Economy (IfW)

Entstanden

  • 2013

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