Collateralized Borrowing: Insights from the World Bank Enterprise Surveys
25 Pages Posted: 20 Apr 2016 Last revised: 31 Jan 2019
Date Written: March 1, 2012
Using the World Bank Enterprise Surveys, we investigate the prevalence and correlates of collateralized borrowing in 131 countries between 2005-2017. Overall, 77 percent of loans require collateral, and the median loan-to-collateral value is 60 percent. Small firms and loans from non-bank financial institutions are less often associated with collateral. When collateral is pledged, the type of collateral assets is strongly correlated with the loan-to-value ratio.
Keywords: Employment and Unemployment, Judicial System Reform, Legal Institutions of the Market Economy, Capital Markets and Capital Flows, Non Bank Financial Institutions, Capital Flows, Access to Finance
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